Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 31, 2014 | Jun. 28, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'MASCO CORP /DE/ | ' | ' |
Entity Central Index Key | '0000062996 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $6,794,823,000 |
Entity Common Stock, Shares Outstanding | ' | 356,404,200 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash investments | $1,223 | $1,040 |
Short-term bank deposits | 321 | 311 |
Receivables | 1,004 | 933 |
Inventories | 765 | 726 |
Prepaid expenses and other | 155 | 107 |
Assets held for sale | ' | 100 |
Total current assets | 3,468 | 3,217 |
Property and equipment, net | 1,252 | 1,326 |
Goodwill | 1,903 | 1,894 |
Other intangible assets, net | 149 | 151 |
Other assets | 161 | 184 |
Assets held for sale | ' | 103 |
Total Assets | 6,933 | 6,875 |
Current Liabilities: | ' | ' |
Accounts payable | 902 | 788 |
Notes payable | 6 | 206 |
Accrued liabilities | 874 | 823 |
Liabilities held for sale | ' | 45 |
Total current liabilities | 1,782 | 1,862 |
Long-term debt | 3,421 | 3,422 |
Deferred income taxes and other | 967 | 1,053 |
Liabilities held for sale | ' | 4 |
Total Liabilities | 6,170 | 6,341 |
Commitments and contingencies | ' | ' |
Masco Corporation's shareholders' equity | ' | ' |
Common shares authorized: 1,400,000,000; issued and outstanding: 2013 - 349,500,000; 2012 - 349,000,000 | 349 | 349 |
Preferred shares authorized: 1,000,000; issued and outstanding: 2013 and 2012 - None | ' | ' |
Paid-in capital | 16 | 16 |
Retained earnings (deficit) | 55 | -102 |
Accumulated other comprehensive income | 115 | 59 |
Total Masco Corporation's shareholders' equity | 535 | 322 |
Noncontrolling interest | 228 | 212 |
Total Equity | 763 | 534 |
Total Liabilities and Equity | $6,933 | $6,875 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED BALANCE SHEETS | ' | ' |
Common shares, shares authorized | 1,400,000,000 | 1,400,000,000 |
Common shares, shares issued | 349,500,000 | 349,000,000 |
Common shares, shares outstanding | 349,500,000 | 349,000,000 |
Preferred shares, shares authorized | 1,000,000 | 1,000,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
Net sales | $8,173 | $7,495 | $7,170 |
Cost of sales | 5,918 | 5,539 | 5,383 |
Gross profit | 2,255 | 1,956 | 1,787 |
Selling, general and administrative expenses | 1,582 | 1,535 | 1,543 |
Charge for litigation settlements, net | ' | 77 | 9 |
Impairment charges for goodwill and other intangible assets | ' | 42 | 450 |
Operating profit (loss) | 673 | 302 | -215 |
Other income (expense), net: | ' | ' | ' |
Interest expense | -235 | -254 | -254 |
Other, net | -4 | 25 | 77 |
Total other income (expense), net | -239 | -229 | -177 |
Income (loss) from continuing operations before income taxes | 434 | 73 | -392 |
Income tax expense (benefit) | 111 | 91 | -40 |
Income (loss) from continuing operations | 323 | -18 | -352 |
Loss from discontinued operations, net | -10 | -61 | -181 |
Net income (loss) | 313 | -79 | -533 |
Less: Net income attributable to noncontrolling interest | 41 | 35 | 42 |
Net income (loss) attributable to Masco Corporation | 272 | -114 | -575 |
Basic: | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | $0.79 | ($0.16) | ($1.14) |
Loss from discontinued operations, net (in dollars per share) | ($0.03) | ($0.17) | ($0.52) |
Net income (loss) (in dollars per share) | $0.76 | ($0.33) | ($1.66) |
Diluted: | ' | ' | ' |
Income (loss) from continuing operations (in dollars per share) | $0.78 | ($0.16) | ($1.14) |
Loss from discontinued operations, net (in dollars per share) | ($0.03) | ($0.17) | ($0.52) |
Net income (loss) (in dollars per share) | $0.76 | ($0.33) | ($1.66) |
Amounts attributable to Masco Corporation: | ' | ' | ' |
Income (loss) from continuing operations | 282 | -53 | -394 |
Loss from discontinued operations, net | -10 | -61 | -181 |
Net income (loss) attributable to Masco Corporation | $272 | ($114) | ($575) |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' |
Net income (loss) | $313 | ($79) | ($533) |
Less: Net income attributable to noncontrolling interest | 41 | 35 | 42 |
Net income (loss) attributable to Masco Corporation | 272 | -114 | -575 |
Other comprehensive income (loss), net of tax (see Note O): | ' | ' | ' |
Cumulative translation adjustment | -75 | 28 | -30 |
Interest rate swaps | 2 | 2 | -23 |
Marketable securities | ' | ' | -38 |
Unrecognized pension prior service cost and net gain (loss) | 138 | -45 | -113 |
Other comprehensive income (loss) | 65 | -15 | -204 |
Less: Other comprehensive income (loss) attributable to the noncontrolling interest: | ' | ' | ' |
Cumulative translation adjustment | 8 | 9 | -7 |
Unrecognized pension prior service cost and net gain (loss) | 1 | -7 | ' |
Other comprehensive income (loss) attributable to the noncontrolling interest | 9 | 2 | -7 |
Other comprehensive income (loss) attributable to Masco Corporation | 56 | -17 | -197 |
Total comprehensive income (loss) | 378 | -94 | -737 |
Less: Total comprehensive income attributable to noncontrolling interest | 50 | 37 | 35 |
Total comprehensive income (loss) attributable to Masco Corporation | $328 | ($131) | ($772) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: | ' | ' | ' |
Net income (loss) | $313 | ($79) | ($533) |
Depreciation and amortization | 186 | 214 | 263 |
Deferred income taxes | 42 | 50 | -112 |
Non-cash loss on disposition of businesses, net | 15 | 4 | ' |
(Gain) on disposition of investments, net | -10 | -24 | -71 |
Impairment charges: | ' | ' | ' |
Financial investments | ' | 2 | ' |
Goodwill and other intangible assets | ' | 42 | 450 |
Discontinued operations | 10 | 3 | 130 |
Stock-based compensation | 54 | 61 | 61 |
Other items, net | -3 | -28 | 53 |
Increase in receivables | -85 | -50 | -60 |
Increase in inventories | -24 | -16 | -54 |
Increase in accounts payable and accrued liabilities, net | 147 | 102 | 112 |
Net cash from operating activities | 645 | 281 | 239 |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: | ' | ' | ' |
Increase in debt | 3 | 4 | 4 |
Payment of debt | -5 | -5 | -9 |
Issuance of notes, net of issuance costs | ' | 396 | ' |
Credit Agreement costs | -4 | ' | -1 |
Retirement of Notes | -200 | -791 | -58 |
Payment for settlement of swaps | ' | -25 | ' |
Purchase of Company common stock | -35 | -8 | -30 |
Dividends paid to noncontrolling interest | -34 | -40 | -18 |
Cash dividends paid | -107 | -107 | -107 |
Net cash for financing activities | -382 | -576 | -219 |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: | ' | ' | ' |
Capital expenditures | -126 | -119 | -151 |
Acquisition of businesses, net of cash acquired | -7 | ' | -10 |
Proceeds from disposition of: | ' | ' | ' |
Marketable securities | ' | ' | 49 |
Short-term bank deposits | 411 | 430 | 545 |
Businesses, net of cash disposed | 17 | 9 | ' |
Property and equipment | 27 | 67 | 24 |
Other financial investments | 16 | 43 | 52 |
Purchases of: | ' | ' | ' |
Other financial investments | -1 | -3 | -7 |
Short-term bank deposits | -409 | -432 | -568 |
Other, net | -5 | -24 | -18 |
Net cash for investing activities | -77 | -29 | -84 |
Effect of exchange rate changes on cash and cash investments | -3 | 11 | -8 |
CASH AND CASH INVESTMENTS: | ' | ' | ' |
Increase (decrease) for the year | 183 | -313 | -72 |
At January 1 | 1,040 | 1,353 | 1,425 |
At December 31 | $1,223 | $1,040 | $1,353 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Common Shares ($1 par value) | Paid-In Capital | Retained (Deficit) Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest |
In Millions, unless otherwise specified | ||||||
Balance at Dec. 31, 2010 | $1,582 | $349 | $42 | $720 | $273 | $198 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Total comprehensive (loss) income | -737 | ' | ' | -575 | -197 | 35 |
Shares issued | ' | 2 | -2 | ' | ' | ' |
Shares retired: | ' | ' | ' | ' | ' | ' |
Repurchased | -30 | -2 | -28 | ' | ' | ' |
Surrendered (non-cash) | -8 | -1 | -7 | ' | ' | ' |
Cash dividends declared | -107 | ' | ' | -107 | ' | ' |
Dividends paid to noncontrolling interest | -18 | ' | ' | ' | ' | -18 |
Stock-based compensation | 60 | ' | 60 | ' | ' | ' |
Balance at Dec. 31, 2011 | 742 | 348 | 65 | 38 | 76 | 215 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Total comprehensive (loss) income | -94 | ' | ' | -114 | -17 | 37 |
Shares issued | -1 | 3 | -4 | ' | ' | ' |
Shares retired: | ' | ' | ' | ' | ' | ' |
Repurchased | -8 | -1 | -7 | ' | ' | ' |
Surrendered (non-cash) | -8 | -1 | -7 | ' | ' | ' |
Cash dividends declared | -107 | ' | -81 | -26 | ' | ' |
Dividends paid to noncontrolling interest | -40 | ' | ' | ' | ' | -40 |
Stock-based compensation | 50 | ' | 50 | ' | ' | ' |
Balance at Dec. 31, 2012 | 534 | 349 | 16 | -102 | 59 | 212 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Total comprehensive (loss) income | 378 | ' | ' | 272 | 56 | 50 |
Shares issued | -8 | 3 | -11 | ' | ' | ' |
Shares retired: | ' | ' | ' | ' | ' | ' |
Repurchased | -35 | -2 | -11 | -22 | ' | ' |
Surrendered (non-cash) | -12 | -1 | -11 | ' | ' | ' |
Cash dividends declared | -107 | ' | -14 | -93 | ' | ' |
Dividends paid to noncontrolling interest | -34 | ' | ' | ' | ' | -34 |
Stock-based compensation | 47 | ' | 47 | ' | ' | ' |
Balance at Dec. 31, 2013 | $763 | $349 | $16 | $55 | $115 | $228 |
ACCOUNTING_POLICIES
ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
ACCOUNTING POLICIES | ' | ||||||||||||||||
ACCOUNTING POLICIES | ' | ||||||||||||||||
A. ACCOUNTING POLICIES | |||||||||||||||||
Principles of Consolidation. The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. The Company consolidates the assets, liabilities and results of operations of variable interest entities, for which the Company is the primary beneficiary. | |||||||||||||||||
Use of Estimates and Assumptions in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. | |||||||||||||||||
Revenue Recognition. The Company recognizes revenue as title to products and risk of loss is transferred to customers or when services are rendered, net of applicable provisions for discounts, returns and allowances. The Company records revenue for unbilled services performed based upon material and labor incurred in the Installation and Other Services segment; such amounts are recorded in receivables. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales. | |||||||||||||||||
Customer Promotion Costs. The Company records estimated reductions to revenue for customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. In-store displays that are owned by the Company and used to market the Company's products are included in other assets in the consolidated balance sheets and are amortized using the straight-line method over the expected useful life of three to five years; related amortization expense is classified as a selling expense in the consolidated statements of operations. | |||||||||||||||||
Foreign Currency. The financial statements of the Company's foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. The resulting cumulative translation adjustments have been recorded in the accumulated other comprehensive income component of shareholders' equity. Realized foreign currency transaction gains and losses are included in the consolidated statements of operations in other income (expense), net. | |||||||||||||||||
Cash and Cash Investments. The Company considers all highly liquid investments with an initial maturity of three months or less to be cash and cash investments. | |||||||||||||||||
Short-Term Bank Deposits. The Company invests a portion of its foreign excess cash in short-term bank deposits. These highly liquid investments have original maturities between three and twelve months and are valued at cost, which approximates fair value at December 31, 2013 and December 31, 2012. These short-term bank deposits are classified in the current assets section of the Company's consolidated balance sheets, and interest income related to short-term bank deposits is recorded in the Company's consolidated statement of operations in other income (expense), net. | |||||||||||||||||
Receivables. The Company does significant business with a number of customers, including certain home centers and homebuilders. The Company monitors its exposure for credit losses on its customer receivable balances and the credit worthiness of its customers on an on-going basis and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer balances, where a risk of default has been identified, and also include a provision for non-customer specific defaults based upon historical collection, return and write-off activity. During downturns in the Company's markets, declines in the financial condition and creditworthiness of customers impacts the credit risk of the receivables involved and the Company has incurred additional bad debt expense related to customer defaults. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity. Receivables are presented net of certain allowances (including allowances for doubtful accounts) of $57 million and $71 million at December 31, 2013 and 2012, respectively. Receivables include unbilled revenue related to the Installation and Other Services segment of $24 million and $18 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||
Property and Equipment. Property and equipment, including significant betterments to existing facilities, are recorded at cost. Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Maintenance and repair costs are charged against earnings as incurred. | |||||||||||||||||
The Company reviews its property and equipment as an event occurs or circumstances change that would more likely than not reduce the fair value of the property and equipment below the carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the current fair value. Further, the Company evaluates the remaining useful lives of property and equipment at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods. | |||||||||||||||||
Depreciation. Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 to 10 percent, and machinery and equipment, 5 to 33 percent. Depreciation expense was $175 million, $192 million and $234 million in 2013, 2012 and 2011, respectively. Such depreciation expense included accelerated depreciation of $13 million (primarily in the Cabinets and Related Products and Plumbing Products segments), $28 million (primarily in the Cabinets and Related Products and Plumbing Products segments) and $52 million (primarily in the Cabinets and Related Products and Other Specialty Products segment) in 2013, 2012 and 2011, respectively. | |||||||||||||||||
Goodwill and Other Intangible Assets. The Company performs its annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has defined its reporting units and completed the impairment testing of goodwill at the operating segment level. The Company's operating segments are reporting units that engage in business activities, for which discrete financial information, including five-year forecasts, are available. The Company compares the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. Fair value is determined using a discounted cash flow method, which includes significant unobservable inputs (Level 3 inputs). | |||||||||||||||||
Determining market values using a discounted cash flow method requires the Company to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. The Company's judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. In estimating future cash flows, the Company relies on internally generated five-year forecasts for sales and operating profits, including capital expenditures, and generally a one to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. The Company utilizes its weighted average cost of capital of approximately 10 percent as the basis to determine the discount rate to apply to the estimated future cash flows. Our weighted average cost of capital increased in 2013 due to improving market conditions and an increased stock price. In 2013 and 2012, due to improving market conditions, the Company increased the discount rate to a range of 11.5 percent to 13.5 percent in 2013 for most of its reporting units compared to a range of 11 percent to 13 percent in 2012. The Company records an impairment to goodwill (adjusting the value to the estimated fair value) if the book value exceeds the estimated fair value. | |||||||||||||||||
The Company reviews its other indefinite-lived intangible assets for impairment annually in the fourth quarter of each year, or as events occur or circumstances change that indicate the assets may be impaired without regard to the reporting unit. The Company considers the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term. | |||||||||||||||||
Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. The Company evaluates the remaining useful lives of amortizable intangible assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining periods of amortization. See Note H for additional information regarding Goodwill and Other Intangible Assets. | |||||||||||||||||
Fair Value Accounting. The Company follows accounting guidance for its financial investments and liabilities which defines fair value, establishes a framework for measuring fair value and prescribes disclosures about fair value measurements. The Company also follows this guidance for its non-financial investments and liabilities. | |||||||||||||||||
The fair value of financial investments and liabilities is determined at each balance sheet date and future declines in market conditions, the future performance of the underlying investments or new information could affect the recorded values of the Company's investments in marketable securities, private equity funds and other private investments. | |||||||||||||||||
The Company uses derivative financial instruments to manage certain exposure to fluctuations in earnings and cash flows resulting from changes in foreign currency exchange rates, commodity costs and interest rate exposures. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at fair value, netted by counterparty, where the right of offset exists. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in determining current earnings during the period of the change in fair value. | |||||||||||||||||
Warranty. At the time of sale, the Company accrues a warranty liability for the estimated cost to provide products, parts or services to repair or replace products in satisfaction of warranty obligations. The Company's estimate of costs to service its warranty obligations is based upon the information available and includes a number of factors such as the warranty coverage, the warranty period, historical experience specific to the nature, frequency and average cost to service the claim, along with product manufacturing metrics and industry and demographic trends. | |||||||||||||||||
Certain factors and related assumptions in determining our warranty liability involve judgments and estimates and are sensitive to changes in the aforementioned factors. The Company believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates thereby requiring adjustments to previously established accruals. | |||||||||||||||||
A majority of the Company's business is at the consumer retail level through home centers and major retailers. A consumer may return a product to a retail outlet that is a warranty return. However, certain retail outlets do not distinguish between warranty and other types of returns when they claim a return deduction from the Company. The Company's revenue recognition policy takes into account this type of return when recognizing revenue, and deductions are recorded at the time of sale. | |||||||||||||||||
Product Liability. The Company provides for expenses associated with product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability. | |||||||||||||||||
Stock-Based Compensation. The Company measures compensation expense for stock awards at the market price of the Company's common stock at the grant date. Such expense is recognized ratably over the shorter of the vesting period of the stock awards, typically 5 to 10 years, or the length of time until the grantee becomes retirement-eligible at age 65. | |||||||||||||||||
The Company measures compensation expense for stock options using a Black-Scholes option pricing model. Such expense is recognized ratably over the shorter of the vesting period of the stock options, typically five years, or the length of time until the grantee becomes retirement-eligible at age 65. The Company utilizes the shortcut method to determine the tax windfall pool associated with stock options. | |||||||||||||||||
Noncontrolling Interest. The Company owns 68 percent of Hansgrohe SE at both December 31, 2013 and 2012. The aggregate noncontrolling interest, net of dividends, at December 31, 2013 and 2012 has been recorded as a component of equity on the Company's consolidated balance sheets. | |||||||||||||||||
Interest and Penalties on Uncertain Tax Positions. The Company records interest and penalties on its uncertain tax positions in income tax expense. | |||||||||||||||||
Reclassifications. Certain prior-year amounts have been reclassified to conform to the 2013 presentation in the consolidated financial statements. In the Company's consolidated statements of cash flows, the cash flows from discontinued operations are not separately classified. | |||||||||||||||||
Revision of Previously Issued Financial Statements. During the third quarter ended September 30, 2013, the Company identified an error related to the classification of cash and cash investments. Foreign short-term bank deposits with terms ranging from three months to twelve months were incorrectly classified as cash and cash investments rather than short-term bank deposits. Historic periods are revised, as detailed below, in our future filings. These classification errors were not considered material to any prior period financial statements. | |||||||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated balance sheets (in millions). | |||||||||||||||||
Balance Sheet December 31, 2012 | As Reported | As Revised | |||||||||||||||
Cash and cash investments | $ | 1,351 | $ | 1,040 | |||||||||||||
Short-term bank deposits | — | 311 | |||||||||||||||
Total current assets | $ | 3,217 | $ | 3,217 | |||||||||||||
Balance Sheet December 31, 2011 | As Reported | As Revised | |||||||||||||||
Cash and cash investments | $ | 1,656 | $ | 1,353 | |||||||||||||
Short-term bank deposits | — | 303 | |||||||||||||||
Total current assets | $ | 3,429 | $ | 3,429 | |||||||||||||
This revision had no effect on our consolidated results of operations. | |||||||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated statement of cash flows (in millions). | |||||||||||||||||
Cash Flows December 31, 2012 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (27 | ) | $ | (29 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | 17 | $ | 11 | |||||||||||||
Decrease in cash and cash investments | $ | (305 | ) | $ | (313 | ) | |||||||||||
Cash Flows December 31, 2011 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (61 | ) | $ | (84 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | (18 | ) | $ | (8 | ) | |||||||||||
Decrease in cash and cash investments | $ | (59 | ) | $ | (72 | ) | |||||||||||
Cash Flows December 31, 2010 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (109 | ) | $ | (244 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | (14 | ) | $ | (7 | ) | |||||||||||
Increase in cash and cash investments | $ | 302 | $ | 174 | |||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated balance sheets and statements of cash flows (all cash flow figures are year-to-date, in millions). | |||||||||||||||||
Mar. 31, | June 30, | Sep. 30, | Mar. 31, | June 30, | |||||||||||||
2012 | 2012 | 2012 | 2013 | 2013 | |||||||||||||
Cash and cash investments | |||||||||||||||||
As reported | $ | 1,788 | $ | 1,853 | $ | 1,166 | $ | 1,032 | $ | 1,223 | |||||||
As revised | $ | 1,491 | $ | 1,612 | $ | 889 | $ | 828 | $ | 1,028 | |||||||
Short-term bank deposits | |||||||||||||||||
As reported | — | — | — | — | — | ||||||||||||
As revised | $ | 297 | $ | 241 | $ | 277 | $ | 204 | $ | 195 | |||||||
Net cash (for) from investing activities | |||||||||||||||||
As reported | $ | (2 | ) | $ | (15 | ) | $ | (42 | ) | $ | (30 | ) | $ | (51 | ) | ||
As revised | $ | 10 | $ | 37 | $ | (17 | ) | $ | 70 | $ | 62 | ||||||
The revisions did not significantly impact the effect of exchange rate changes on cash and cash investments in each quarter above. These changes will be reflected in the revised statements of cash flows, in future filings. | |||||||||||||||||
Recently Issued Accounting Pronouncements. On January 1, 2013, the Company adopted new accounting guidance requiring disclosure of amounts reclassified from accumulated other comprehensive income. The adoption of this new guidance did not have an impact on the Company's financial position or its results of operations. | |||||||||||||||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||
B. DISCONTINUED OPERATIONS | |||||||||||
The presentation of discontinued operations includes components of the Company that the Company intends to sell, which comprises operations and cash flows that can be clearly distinguished from the rest of the Company. | |||||||||||
In February 2013, the Company determined that Tvilum, its Danish ready-to-assemble cabinet business, was no longer core to its long-term growth strategy and, accordingly, the Company embarked on a plan for disposition. In December 2013, the Company completed the disposition of this business and a related Danish holding company for net proceeds of $17 million. | |||||||||||
During 2011, the Company determined that several businesses in the Installation and Other Services segment were not core to the Company's long-term growth strategy. These businesses provide commercial drywall installation, millwork and framing services. During 2012, the Company disposed all of these businesses for net proceeds of $7 million. | |||||||||||
The Company has accounted for the business units identified in 2013 and 2011 as discontinued operations. Losses from these discontinued operations were included in loss from discontinued operations, net, in the consolidated statements of operations. | |||||||||||
Selected financial information for the discontinued operations during the period owned by the Company, were as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net sales | $ | 265 | $ | 321 | $ | 389 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Operating loss from discontinued operations | $ | (7 | ) | $ | (44 | ) | $ | (58 | ) | ||
Impairment of assets held for sale | (10 | ) | (3 | ) | (130 | ) | |||||
Gain (loss) on disposal of discontinued operations, net | 3 | (6 | ) | (3 | ) | ||||||
| | | | | | | | | | | |
Loss before income tax | (14 | ) | (53 | ) | (191 | ) | |||||
Income tax (benefit) expense | (4 | ) | 8 | (10 | ) | ||||||
| | | | | | | | | | | |
Loss from discontinued operations, net | $ | (10 | ) | $ | (61 | ) | $ | (181 | ) | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
Included in impairment of assets held for sale in 2013 is the impairment of fixed assets. During the first quarter of 2013, the Company estimated the fair value of the business held for sale, using unobservable inputs (Level 3). After considering the currency translation gains reported in Accumulated Other Comprehensive Income, the Company recorded an impairment of $10 million in the first quarter of 2013. | |||||||||||
In 2013, in conjunction with the transaction to sell the Danish ready-to-assemble cabinet business (included in discontinued operations), the Company also disposed of a non-operating entity in Denmark. This disposition triggered the settlement of loans, which resulted in the recognition of $18 million of currency translation expense, which is included in other income (expense) from continuing operations in the statement of operations. | |||||||||||
Included in the impairment of assets held for sale, net in 2011 is the impairment of indefinite and definite-lived intangible assets of $56 million, the impairment of goodwill of $57 million and the impairment of fixed and other assets of $17 million. Included in the loss on disposal of discontinued operations, net in 2011 is $3 million expense reflecting the adjustment of certain assets related to businesses disposed in prior years. | |||||||||||
The unusual relationship between income tax expense and loss before income tax in 2012 resulted primarily from the increase in the deferred tax liability associated with the abandonment of tax basis in indefinite-lived intangibles due to the disposition of certain discontinued operations. | |||||||||||
The unusual relationship between income taxes and loss before income taxes in 2011 resulted primarily from certain losses providing no current tax benefit. | |||||||||||
The following balance sheet items have been classified as held for sale: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Receivables | $ | — | $ | 32 | |||||||
Inventories | — | 66 | |||||||||
Prepaid expenses and other | — | 2 | |||||||||
Property and equipment, net | — | 103 | |||||||||
| | | | | | | | ||||
Total assets | $ | — | $ | 203 | |||||||
Accounts payable | — | 31 | |||||||||
Accrued liabilities | — | 14 | |||||||||
Deferred income taxes | — | 4 | |||||||||
| | | | | | | | ||||
Total liabilities | $ | — | $ | 49 | |||||||
In the fourth quarter of 2012, the Company determined that the estimated fair value calculated for Tvilum was lower than the net book value. The Company assessed the long-lived assets associated with this business unit and determined that no impairment was necessary at December 31, 2012. | |||||||||||
Also during 2011, the Company decided to exit a product line in builders' hardware in the Decorative Architectural Products segment with net sales of $1 million and an operating loss of $15 million in 2011 (including $8 million to write-down inventory related to satisfaction of contractual obligations). In the first quarter of 2012, the Company disposed of this product line. This business was included in continuing operations through the date of disposal. | |||||||||||
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2013 | |
ACQUISITIONS | ' |
ACQUISITIONS | ' |
C. ACQUISITIONS | |
In the first quarter of 2013, the Company acquired a small U.K. door business in the Other Specialty Products segment. The total net cash purchase price was $4 million in 2013. | |
In late 2011, the Company acquired a small manufacturer of hot tubs in the Plumbing Products segment; this business allows the Company to expand its spa offering into additional price point categories. The total net cash purchase price was $10 million in 2011. | |
The results of these acquisitions are included in the consolidated financial statements from the respective date of acquisition. | |
INVENTORIES
INVENTORIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVENTORIES | ' | |||||||
INVENTORIES | ' | |||||||
D. INVENTORIES | ||||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Finished goods | $ | 398 | $ | 369 | ||||
Raw material | 268 | 261 | ||||||
Work in process | 99 | 96 | ||||||
| | | | | | | | |
Total | $ | 765 | $ | 726 | ||||
| | | | | | | | |
| | | | | | | | |
Inventories, which include purchased parts, materials, direct labor and applied manufacturing overhead, are stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method. | ||||||||
FAIR_VALUE_OF_FINANCIAL_INVEST
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES | ' | ||||||||||
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES | ' | ||||||||||
E. FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES | |||||||||||
Accounting Policy. The Company follows accounting guidance that defines fair value, establishes a framework for measuring fair value and prescribes disclosures about fair value measurements for its financial investments and liabilities. The guidance defines fair value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Further, it defines a fair value hierarchy, as follows: Level 1 inputs as quoted prices in active markets for identical assets or liabilities; Level 2 inputs as observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities or other inputs that are observable or can be corroborated by market data; and Level 3 inputs as unobservable inputs that are supported by little or no market activity and that are financial instruments whose value is determined using pricing models or instruments for which the determination of fair value requires significant management judgment or estimation. | |||||||||||
Financial investments that are available to be traded on readily accessible stock exchanges (domestic or foreign) are considered to have active markets and have been valued using Level 1 inputs. Financial investments that are not available to be traded on a public market or have limited secondary markets, or contain provisions that limit the ability to sell the investment are considered to have inactive markets and have been valued using Level 2 or 3 inputs. The Company incorporated credit risk into the valuations of financial investments by estimating the likelihood of non-performance by the counterparty to the applicable transactions. The estimate included the length of time relative to the contract, financial condition of the counterparty and current market conditions. The criteria for determining if a market was active or inactive were based on the individual facts and circumstances. | |||||||||||
Financial Investments. The Company has maintained investments in available-for-sale securities and a number of private equity funds and other private investments, principally as part of its tax planning strategies, as any gains enhance the utilization of any current and future tax capital losses. | |||||||||||
Financial investments included in other assets were as follows, in millions: | |||||||||||
At December 31 | |||||||||||
2013 | 2012 | ||||||||||
Auction rate securities | $ | 22 | $ | 22 | |||||||
| | | | | | | | ||||
Total recurring investments | 22 | 22 | |||||||||
Private equity funds | 63 | 69 | |||||||||
Other investments | 3 | 4 | |||||||||
| | | | | | | | ||||
Total non-recurring investments | 66 | 73 | |||||||||
Total | $ | 88 | $ | 95 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
The Company's investments in available-for-sale securities included cost basis of $19 million and pre-tax unrealized gains of $3 million and had a recorded basis of $22 million at both December 31, 2013 and 2012. | |||||||||||
The Company's investments in private equity funds and other private investments are carried at cost. At December 31, 2013, the Company has investments in 14 venture capital funds, with an aggregate carrying value of $15 million. The venture capital funds invest in start-up or smaller, early-stage established businesses, principally in the information technology, bio-technology and health care sectors. At December 31, 2013, the Company also has investments in 15 buyout funds, with an aggregate carrying value of $48 million. The buyout funds invest in later-stage, established businesses and no buyout fund has a concentration in a particular sector. | |||||||||||
Recurring Fair Value Measurements. For financial investments measured at fair value on a recurring basis at each reporting period, the unrealized gains or losses (that are deemed to be temporary) are recognized, net of tax effect, through shareholders' equity, as a component of other comprehensive income. Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based upon specific identification. | |||||||||||
In the past, the Company invested excess cash in auction rate securities. Auction rate securities are investment securities that have interest rates which are reset every 7, 28 or 35 days. The fair values of the auction rate securities held by the Company have been estimated, on a recurring basis, using a discounted cash flow model (Level 3 input). The significant inputs in the discounted cash flow model used to value the auction rate securities include: expected maturity of auction rate securities, discount rate used to determine the present value of expected cash flows and assumptions for credit defaults, since the auction rate securities are backed by credit default swap agreements. | |||||||||||
There were no changes in the fair value of Level 3 financial investments for the year ended December 31, 2013 or 2012. | |||||||||||
During 2011, the Company sold 1,974,000 shares of its investment in TriMas common stock for cash of $43 million; at December 31, 2013, 2012 and 2011, the Company did not own any shares of TriMas common stock. | |||||||||||
Non-Recurring Fair Value Measurements. It is not practicable for the Company to estimate a fair value for private equity funds and other private investments because there are no quoted market prices, and sufficient information is not readily available for the Company to utilize a valuation model to determine the fair value for each fund. These investments are evaluated, on a non-recurring basis, for potential other-than-temporary impairment when impairment indicators are present, or when an event or change in circumstances has occurred, that may have a significant adverse effect on the fair value of the investment. | |||||||||||
Impairment indicators the Company considers include the following: whether there has been a significant deterioration in earnings performance, asset quality or business prospects; a significant adverse change in the regulatory, economic or technological environment; a significant adverse change in the general market condition or geographic area in which the investment operates; industry and sector performance; current equity and credit market conditions; and any bona fide offers to purchase the investment for less than the carrying value. The Company also considers specific adverse conditions related to the financial health of and business outlook for the fund, including industry and sector performance. The significant assumptions utilized in analyzing a fund for potential other-than-temporary impairment include current economic conditions, market analysis for specific funds and performance indicators in the residential and commercial construction, bio-technology, health care and information technology sectors in which the applicable funds' investments operate. Since there is no active trading market for these investments, they are for the most part illiquid. These investments, by their nature, can also have a relatively higher degree of business risk, including financial leverage, than other financial investments. Future changes in market conditions, the future performance of the underlying investments or new information provided by private equity fund managers could affect the recorded values of such investments and the amounts realized upon liquidation. Due to the significant unobservable inputs, the fair value measurements used to evaluate impairment are a Level 3 input. | |||||||||||
During 2013, there were no financial investments measured on a non-recurring basis. None of the Company's investments in private equity funds, for which fair value was determined, had unrealized losses in 2013 or 2012. | |||||||||||
During 2012, the Company recognized a $2 million loss related to private equity funds (financial investments measured at fair value on a non-recurring basis) using significant unobservable inputs (Level 3). The remaining private equity investments in 2012 with an aggregate carrying value of $67 million, were not reviewed for impairment, as there were no indicators of impairment or identified events or changes in circumstances that would have a significant adverse effect on the fair value of the investment. | |||||||||||
The Company did not have any transfers between Level 1 and Level 2 financial assets in 2013 or 2012. | |||||||||||
Realized Gains (Losses) and Impairment Charges. Income from financial investments, net, included in other, net, within other income (expense), net, and impairment charges for financial investments were as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Realized gains from marketable securities | $ | — | $ | — | $ | 41 | |||||
Realized gains from private equity funds | 11 | 24 | 32 | ||||||||
Impairment of private equity funds | — | (2 | ) | — | |||||||
| | | | | | | | | | | |
Income from financial investments, net | $ | 11 | $ | 22 | $ | 73 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The impairment charges related to the Company's financial investments recognized during 2012 were based upon then-current estimates for the fair value of certain financial investments; such estimates could change in the near-term based upon future events and circumstances. | |||||||||||
The fair value of the Company's short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues or the current rates available to the Company for debt with similar terms and remaining maturities. The aggregate estimated market value of short-term and long-term debt at December 31, 2013 was approximately $3.7 billion, compared with the aggregate carrying value of $3.4 billion. The aggregate estimated market value of short-term and long-term debt at December 31, 2012 was approximately $4.0 billion, compared with the aggregate carrying value of $3.6 billion. | |||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | ||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | ||||||||||
F. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||||||||||
The Company is exposed to global market risk as part of its normal daily business activities. To manage these risks, the Company enters into various derivative contracts. These contracts include interest rate swap agreements, foreign currency exchange contracts and contracts intended to hedge the Company's exposure to copper and zinc. The Company reviews its hedging program, derivative positions and overall risk management on a regular basis. | |||||||||||
Interest Rate Swap Agreements. In March 2012, in connection with the issuance of $400 million of debt, the Company terminated the interest rate swap hedge relationships that it had entered into in August 2011. These interest rate swaps were designated as cash flow hedges and effectively fixed interest rates on the forecasted debt issuance to variable rates based on 3-month LIBOR. Upon termination, the ineffective portion of the cash flow hedges of approximately $2 million loss was recognized in the Company's consolidated statement of operations in other, net. The remaining loss of approximately $23 million from the termination of these swaps is being amortized as an increase to interest expense over the remaining term of the debt, through March 2022. At December 31, 2013, the balance remaining in accumulated other comprehensive income was $19 million. In 2013, the Company recognized an increase in interest expense of $2 million related to the annual amortization of the March 2012 terminated interest rate swap. | |||||||||||
In 2012, the Company recognized a decrease in interest expense of $6 million, offset by interest expense of $2 million related to the cash flow hedge terminated in March 2012. In 2011, the Company recognized a decrease in interest expense of $10 million related to the amortization of gains resulting from the terminations (in 2008 and 2004) of two fair value interest rate swap agreements. | |||||||||||
Foreign Currency Contracts. The Company's net cash inflows and outflows exposed to the risk of changes in foreign currency exchange rates arise from the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt and other payables, and investments in subsidiaries. To mitigate this risk during 2013, 2012 and 2011, the Company, including certain European operations, entered into foreign currency forward contracts and foreign currency exchange contracts. | |||||||||||
Gains (losses) related to foreign currency forward and exchange contracts are recorded in the Company's consolidated statements of operations in other income (expense), net. In the event that the counterparties fail to meet the terms of the foreign currency forward contracts, the Company's exposure is limited to the aggregate foreign currency rate differential with such institutions. | |||||||||||
Metals Contracts. During 2013, 2012 and 2011, the Company entered into several contracts to manage its exposure to increases in the price of copper and zinc. Gains (losses) related to these contracts are recorded in the Company's consolidated statements of operations in cost of sales. | |||||||||||
The pre-tax gains (losses) included in the Company's consolidated statements of operations are as follows, in millions: | |||||||||||
Twelve Months Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Foreign Currency Contracts | |||||||||||
Exchange Contracts | $ | 2 | $ | (2 | ) | $ | 3 | ||||
Forward Contracts | 1 | — | 3 | ||||||||
Metals Contracts | (7 | ) | 2 | (7 | ) | ||||||
| | | | | | | | | | | |
Total gains (losses) | $ | (4 | ) | $ | — | $ | (1 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
The Company presents its net derivatives due to the right of offset by its counterparties under master netting arrangements in current assets or accrued liabilities in the consolidated balance sheet. The notional amounts being hedged and the fair value of those derivative instruments, on a gross basis, is as follows, in millions: | |||||||||||
At December 31, 2013 | |||||||||||
Notional | Assets | Liabilities | |||||||||
Amount | |||||||||||
Foreign Currency Contracts | |||||||||||
Exchange Contracts | $ | 53 | |||||||||
Current liabilities | $ | — | $ | 2 | |||||||
Forward Contracts | 88 | ||||||||||
Current liabilities | — | 1 | |||||||||
Metals Contracts | 48 | ||||||||||
Current liabilities | — | 2 | |||||||||
| | | | | | | | | | | |
Total | $ | — | $ | 5 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
At December 31, 2012 | |||||||||||
Notional | Assets | Liabilities | |||||||||
Amount | |||||||||||
Foreign Currency Contracts | |||||||||||
Exchange Contracts | $ | 172 | |||||||||
Current liabilities | $ | — | $ | 5 | |||||||
Forward Contracts | 76 | ||||||||||
Current assets | 1 | 1 | |||||||||
Metals Contracts | 35 | ||||||||||
Current liabilities | 1 | 2 | |||||||||
| | | | | | | | | | | |
Total | $ | 2 | $ | 8 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The fair value of all metals and foreign currency derivative contracts is estimated on a recurring basis, quarterly, using Level 2 inputs (significant other observable inputs). | |||||||||||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PROPERTY AND EQUIPMENT | ' | |||||||
PROPERTY AND EQUIPMENT | ' | |||||||
G. PROPERTY AND EQUIPMENT | ||||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Land and improvements | $ | 135 | $ | 140 | ||||
Buildings | 809 | 819 | ||||||
Machinery and equipment | 2,046 | 2,054 | ||||||
| | | | | | | | |
2,990 | 3,013 | |||||||
Less: Accumulated depreciation | 1,738 | 1,687 | ||||||
| | | | | | | | |
Total | $ | 1,252 | $ | 1,326 | ||||
| | | | | | | | |
| | | | | | | | |
The Company leases certain equipment and plant facilities under noncancellable operating leases. Rental expense recorded in the consolidated statements of operations totaled approximately $93 million, $94 million and $102 million during 2013, 2012 and 2011, respectively. Future minimum lease payments at December 31, 2013 were approximately as follows: 2014 – $62 million; 2015 – $47 million; 2016 – $32 million; 2017 – $20 million; 2018 – $14 million; and 2019 and beyond – $86 million. | ||||||||
The Company leases operating facilities from certain related parties, primarily former owners (and in certain cases, current management personnel) of companies acquired. The Company recorded rental expense to such related parties of approximately $6 million in 2013 and $5 million in each of 2012 and 2011, respectively. | ||||||||
As a result of its business rationalization activities over the last several years, at December 31, 2013 and 2012, the Company was holding several facilities for sale, within the Cabinets and Related Products segment and the Other Specialty Products segment. At December 31, 2013 and 2012, the net book value of those facilities was approximately $6 million and $14 million, respectively, and approximates fair value. Fair value was estimated using a market approach, considering the estimated fair values for the other comparable buildings in the areas where the facilities are located, Level 3 inputs. | ||||||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||
H. GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||||||||
The changes in the carrying amount of goodwill for 2013 and 2012, by segment, were as follows, in millions: | |||||||||||||||||||||||
Gross Goodwill | Accumulated | Net Goodwill | |||||||||||||||||||||
At December 31, | Impairment | At December 31, | |||||||||||||||||||||
2013 | Losses | 2013 | |||||||||||||||||||||
Cabinets and Related Products | $ | 240 | $ | (59 | ) | $ | 181 | ||||||||||||||||
Plumbing Products | 550 | (340 | ) | 210 | |||||||||||||||||||
Installation and Other Services | 1,806 | (762 | ) | 1,044 | |||||||||||||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | |||||||||||||||||||
Other Specialty Products | 983 | (734 | ) | 249 | |||||||||||||||||||
| | | | | | | | | | | |||||||||||||
Total | $ | 3,873 | $ | (1,970 | ) | $ | 1,903 | ||||||||||||||||
| | | | | | | | | | | |||||||||||||
| | | | | | | | | | | |||||||||||||
Gross Goodwill | Accumulated | Net Goodwill | Pre-tax | Additions (A) | Other (B) | Net Goodwill | |||||||||||||||||
At December 31, | Impairment | At December 31, | Impairment | At December 31, | |||||||||||||||||||
2012 | Losses | 2012 | Charge | 2013 | |||||||||||||||||||
Cabinets and Related Products | $ | 240 | $ | (59 | ) | $ | 181 | $ | — | $ | — | $ | — | $ | 181 | ||||||||
Plumbing Products | 544 | (340 | ) | 204 | — | — | 6 | 210 | |||||||||||||||
Installation and Other Services | 1,806 | (762 | ) | 1,044 | — | — | — | 1,044 | |||||||||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | — | — | 219 | |||||||||||||||
Other Specialty Products | 980 | (734 | ) | 246 | — | 3 | — | 249 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,864 | $ | (1,970 | ) | $ | 1,894 | $ | — | $ | 3 | $ | 6 | $ | 1,903 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Gross Goodwill | Accumulated | Net Goodwill | Pre-tax | Additions (A) | Other (B) | Net Goodwill | |||||||||||||||||
At December 31, | Impairment | At December 31, | Impairment | At December 31, | |||||||||||||||||||
2011 | Losses | 2011 | Charge | 2012 | |||||||||||||||||||
Cabinets and Related Products | $ | 240 | $ | (59 | ) | $ | 181 | $ | — | $ | — | $ | — | $ | 181 | ||||||||
Plumbing Products | 541 | (340 | ) | 201 | — | — | 3 | 204 | |||||||||||||||
Installation and Other Services | 1,806 | (762 | ) | 1,044 | — | — | — | 1,044 | |||||||||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | — | — | 219 | |||||||||||||||
Other Specialty Products | 980 | (734 | ) | 246 | — | — | — | 246 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,861 | $ | (1,970 | ) | $ | 1,891 | $ | — | $ | — | $ | 3 | $ | 1,894 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(A) | |||||||||||||||||||||||
Additions include acquisitions. | |||||||||||||||||||||||
(B) | |||||||||||||||||||||||
Other principally includes the effect of foreign currency translation. | |||||||||||||||||||||||
In the fourth quarters of 2013 and 2012, the Company completed its annual impairment testing of goodwill and other indefinite-lived intangible assets. The impairment test in 2013 and 2012 indicated there was no impairment of goodwill for any of the Company's reporting units. | |||||||||||||||||||||||
The impairment test in 2011 indicated that goodwill recorded for certain of the Company's reporting units was impaired. The Company recognized the non-cash, pre-tax impairment charges, in continuing operations, for goodwill of $442 million ($286 million, after tax) for 2011. In 2011, the pre-tax impairment charge in the Decorative Architectural Products segment relates to the builders' hardware business and reflects increasing competitive conditions for that business. The pre-tax impairment charge in the Other Specialty Products segment relates to the North American window and door business and reflects the continuing weak level of new home construction activity in the western U.S., the reduced levels of repair and remodel activity and the expectation that recovery in these segments will be modestly slower than anticipated. The Company then assessed the long-lived assets associated with these business units and determined no impairment was necessary at December 31, 2011. | |||||||||||||||||||||||
Other indefinite-lived intangible assets were $133 million and $132 million at December 31, 2013 and 2012, respectively, and principally included registered trademarks. In 2013, the impairment test indicated there was no impairment of other intangible assets for any of the Company's reporting units. In 2012 and 2011, the impairment test indicated that the registered trademark for a North American business unit in the Other Specialty Products segment and the registered trademark for a North American business unit in the Plumbing Products segment (2011 only) were impaired due to changes in the long-term outlook for the business units. The Company recognized non-cash, pre-tax impairment charges for other indefinite-lived intangible assets of $42 million ($27 million, after tax) and $8 million ($5 million, after tax) in 2012 and 2011, respectively. | |||||||||||||||||||||||
The carrying value of the Company's definite-lived intangible assets was $16 million (net of accumulated amortization of $62 million) at December 31, 2013 and $19 million at December 31, 2012 (net of accumulated amortization of $57 million) and principally included customer relationships and non-compete agreements, with a weighted average amortization period of 6 years in both 2013 and 2012. Amortization expense related to the definite-lived intangible assets of continuing operations was $5 million in 2013 and $6 million in each of 2012 and 2011. | |||||||||||||||||||||||
At December 31, 2013, amortization expense related to the definite-lived intangible assets during each of the next five years was as follows: 2014 – $5 million; 2015 – $4 million; 2016 – $3 million; 2017 – $1 million; and 2018 – $1 million. | |||||||||||||||||||||||
OTHER_ASSETS
OTHER ASSETS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
OTHER ASSETS | ' | |||||||
OTHER ASSETS | ' | |||||||
I. OTHER ASSETS | ||||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Financial investments (Note E) | $ | 88 | $ | 95 | ||||
In-store displays, net | 21 | 35 | ||||||
Debenture expense | 24 | 25 | ||||||
Notes receivable | 2 | 2 | ||||||
Other | 26 | 27 | ||||||
| | | | | | | | |
Total | $ | 161 | $ | 184 | ||||
| | | | | | | | |
| | | | | | | | |
In-store displays are amortized using the straight-line method over the expected useful life of three to five years; the Company recognized amortization expense related to in-store displays of $19 million, $21 million and $24 million in 2013, 2012 and 2011, respectively. Cash spent for displays was $5 million, $23 million and $17 million in 2013, 2012 and 2011, respectively. | ||||||||
ACCRUED_LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCRUED LIABILITIES | ' | |||||||
ACCRUED LIABILITIES | ' | |||||||
J. ACCRUED LIABILITIES | ||||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Salaries, wages and commissions | $ | 210 | $ | 189 | ||||
Insurance | 166 | 170 | ||||||
Warranty (Note U) | 124 | 118 | ||||||
Advertising and sales promotion | 111 | 93 | ||||||
Interest | 58 | 63 | ||||||
Employee retirement plans | 48 | 40 | ||||||
Income taxes payable | 32 | 27 | ||||||
Property, payroll and other taxes | 28 | 24 | ||||||
Dividends payable | 27 | 27 | ||||||
Derivative instruments (Note F) | 5 | 6 | ||||||
Plant closures | 6 | 5 | ||||||
Litigation | 4 | 7 | ||||||
Other | 55 | 54 | ||||||
| | | | | | | | |
Total | $ | 874 | $ | 823 | ||||
| | | | | | | | |
| | | | | | | | |
DEBT
DEBT | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
DEBT | ' | |||||||
DEBT | ' | |||||||
K. DEBT | ||||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Notes and debentures: | ||||||||
7.125%, due Aug. 15, 2013 | $ | — | $ | 200 | ||||
4.8%, due June 15, 2015 | 500 | 500 | ||||||
6.125%, due Oct. 3, 2016 | 1,000 | 1,000 | ||||||
5.85%, due Mar. 15, 2017 | 300 | 300 | ||||||
6.625%, due Apr. 15, 2018 | 114 | 114 | ||||||
7.125%, due Mar. 15, 2020 | 500 | 500 | ||||||
5.95%, due March 15, 2022 | 400 | 400 | ||||||
7.75%, due Aug. 1, 2029 | 296 | 296 | ||||||
6.5%, due Aug. 15, 2032 | 300 | 300 | ||||||
Other | 17 | 18 | ||||||
| | | | | | | | |
3,427 | 3,628 | |||||||
Less: Current portion | 6 | 206 | ||||||
| | | | | | | | |
Total long-term debt | $ | 3,421 | $ | 3,422 | ||||
| | | | | | | | |
| | | | | | | | |
All of the notes and debentures above are senior indebtedness and, other than the 6.625% notes due 2018 and the 7.75% notes due 2029, are redeemable at the Company's option. | ||||||||
On August 15, 2013, the Company repurchased and retired all of its $200 million, 7.125% Notes on the scheduled retirement date. | ||||||||
On March 5, 2012, the Company issued $400 million of 5.95% Notes ("the Notes") due March 15, 2022. Including the interest rate swap amortization, the effective interest rate for the Notes is approximately 6.5%, see Note F. The Notes are senior indebtedness and are redeemable at the Company's option. | ||||||||
In January 2012, the Company repurchased $46 million of 5.875% Notes due July 15, 2012 in open-market transactions; the Company paid a premium of $1 million for the repurchase. In July 2012, the Company retired all of its $745 million of 5.875% Notes on the scheduled retirement date. | ||||||||
On March 28, 2013, the Company entered into a Credit Agreement (the "Credit Agreement") with a bank group, with an aggregate commitment of $1.25 billion and a maturity date of March 28, 2018. Upon entry into the Credit Agreement, the Company's credit agreement dated as of June 21, 2010, as amended, with an aggregate commitment of $1.25 billion, was terminated. | ||||||||
The Credit Agreement provides for an unsecured revolving credit facility available to the Company and one of its foreign subsidiaries, in U.S. dollars, European euros and certain other currencies. Borrowings under the revolver denominated in euros are limited to $500 million, equivalent. The Company can also borrow swingline loans up to $150 million and obtain letters of credit of up to $250 million; any outstanding Letters of Credit, under the Credit Agreement, reduce the Company's borrowing capacity. At December 31, 2013, the Company had $92 million of outstanding and unused Letters of Credit, reducing the Company's borrowing capacity by such amount. | ||||||||
Revolving credit loans bear interest under the Credit Agreement, at the Company's option, at (A) a rate per annum equal to the greater of (i) the prime rate, (ii) the Federal Funds effective rate plus 0.50% and (iii) LIBOR plus 1.0% (the "Alternative Base Rate"); plus an applicable margin based upon the then applicable corporate credit ratings of the Company; or (B) LIBOR plus an applicable margin based upon the then applicable corporate credit ratings of the Company. The foreign currency revolving credit loans bear interest at a rate equal to LIBOR plus an applicable margin based upon the then applicable corporate credit ratings of the Company. | ||||||||
The Credit Agreement contains financial covenants requiring the Company to maintain (A) a maximum debt to total capitalization ratio, as adjusted for certain items, of 65 percent, and (B) a minimum interest coverage ratio, as adjusted for certain items, equal to or greater than 2.5 to 1.0. The debt to total capitalization ratio allows the add-back, if incurred, of up to the first $250 million of certain non-cash charges, including goodwill and other intangible asset impairment charges, occurring from and after January 1, 2012 that would negatively impact shareholders' equity. | ||||||||
Based on the limitations of the debt to total capitalization ratio covenant in the Credit Agreement, at December 31, 2013, the Company had additional borrowing capacity, subject to availability, of up to $1.2 billion. Additionally, at December 31, 2013, the Company could absorb a reduction to shareholders' equity of approximately $770 million and remain in compliance with the debt to total capitalization covenant. | ||||||||
In order for the Company to borrow under the Credit Agreement, there must not be any default in the Company's covenants in the new Credit Agreement (i.e., in addition to the two financial covenants, principally limitations on subsidiary debt, negative pledge restrictions, legal compliance requirements and maintenance of properties and insurance) and the Company's representations and warranties in the Credit Agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, since December 31, 2012, in each case, no material ERISA or environmental non-compliance and no material tax deficiency). At December 31, 2013 and 2012, the Company was in compliance with all covenants and no borrowings have been made under the Credit Agreement. | ||||||||
At December 31, 2013, the debt maturities during each of the next five years were as follows: 2014 – $6 million; 2015 – $501 million; 2016 – $1,001 million; 2017 – $301 million; and 2018 – $115 million. | ||||||||
Interest paid was $232 million, $269 million and $254 million in 2013, 2012 and 2011, respectively. | ||||||||
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||||||
L. STOCK-BASED COMPENSATION | |||||||||||||||||
The Company's 2005 Long Term Stock Incentive Plan (the "2005 Plan") provides for the issuance of stock-based incentives in various forms to employees and non-employee Directors of the Company. At December 31, 2013, outstanding stock-based incentives were in the form of long-term stock awards, stock options, phantom stock awards and stock appreciation rights. | |||||||||||||||||
Pre-tax compensation expense and the related income tax benefit for these stock-based incentives were as follows, in millions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Long-term stock awards | $ | 34 | $ | 35 | $ | 39 | |||||||||||
Stock options | 13 | 15 | 21 | ||||||||||||||
Phantom stock awards and stock appreciation rights | 7 | 11 | 1 | ||||||||||||||
| | | | | | | | | | | |||||||
Total | $ | 54 | $ | 61 | $ | 61 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Income tax benefit (37 percent tax rate – before valuation allowance) | $ | 20 | $ | 23 | $ | 23 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
At December 31, 2013, a total of 9.3 million shares of Company common stock were available under the 2005 Plan for the granting of stock options and other long-term stock incentive awards. | |||||||||||||||||
Long-Term Stock Awards. Long-term stock awards are granted to key employees and non-employee Directors of the Company and do not cause net share dilution inasmuch as the Company continues the practice of repurchasing and retiring an equal number of shares in the open market. The Company granted 1,743,180 shares of long-term stock awards during 2013. | |||||||||||||||||
The Company's long-term stock award activity was as follows, shares in millions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Unvested stock award shares at January 1 | 8 | 10 | 10 | ||||||||||||||
Weighted average grant date fair value | $ | 16 | $ | 17 | $ | 19 | |||||||||||
Stock award shares granted | 2 | 1 | 2 | ||||||||||||||
Weighted average grant date fair value | $ | 20 | $ | 12 | $ | 13 | |||||||||||
Stock award shares vested | 2 | 2 | 2 | ||||||||||||||
Weighted average grant date fair value | $ | 17 | $ | 18 | $ | 20 | |||||||||||
Stock award shares forfeited | — | 1 | — | ||||||||||||||
Weighted average grant date fair value | $ | 16 | $ | 17 | $ | 18 | |||||||||||
Unvested stock award shares at December 31 | 8 | 8 | 10 | ||||||||||||||
Weighted average grant date fair value | $ | 17 | $ | 16 | $ | 17 | |||||||||||
At December 31, 2013, 2012 and 2011, there was $69 million, $72 million and $107 million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of three years for 2013, four years for 2012 and four years for 2011. | |||||||||||||||||
The total market value (at the vesting date) of stock award shares which vested during 2013, 2012 and 2011 was $38 million, $27 million and $28 million, respectively. | |||||||||||||||||
Stock Options. Stock options are granted to key employees of the Company. The exercise price equals the market price of the Company's common stock at the grant date. These options generally become exercisable (vest ratably) over five years beginning on the first anniversary from the date of grant and expire no later than 10 years after the grant date. | |||||||||||||||||
The Company granted 899,000 of stock option shares during 2013 with a grant date exercise price approximating $20 per share. During 2013, 3.8 million stock option shares were forfeited (including options that expired unexercised). | |||||||||||||||||
The Company's stock option activity was as follows, shares in millions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Option shares outstanding, January 1 | 30 | 36 | 37 | ||||||||||||||
Weighted average exercise price | $ | 21 | $ | 21 | $ | 21 | |||||||||||
Option shares granted | 1 | 1 | 2 | ||||||||||||||
Weighted average exercise price | $ | 20 | $ | 12 | $ | 13 | |||||||||||
Option shares exercised | 3 | 1 | — | ||||||||||||||
Aggregate intrinsic value on date of exercise (A) | $ | 23 million | $ | 5 million | $ | 1 million | |||||||||||
Weighted average exercise price | $ | 12 | $ | 10 | $ | 8 | |||||||||||
Option shares forfeited | 4 | 6 | 3 | ||||||||||||||
Weighted average exercise price | $ | 26 | $ | 19 | $ | 22 | |||||||||||
Option shares outstanding, December 31 | 24 | 30 | 36 | ||||||||||||||
Weighted average exercise price | $ | 22 | $ | 21 | $ | 21 | |||||||||||
Weighted average remaining option term (in years) | 4 | 5 | 5 | ||||||||||||||
Option shares vested and expected to vest, December 31 | 24 | 30 | 36 | ||||||||||||||
Weighted average exercise price | $ | 22 | $ | 21 | $ | 21 | |||||||||||
Aggregate intrinsic value (A) | $ | 109 million | $ | 55 million | $ | 12 million | |||||||||||
Weighted average remaining option term (in years) | 4 | 5 | 5 | ||||||||||||||
Option shares exercisable (vested), December 31 | 20 | 23 | 24 | ||||||||||||||
Weighted average exercise price | $ | 24 | $ | 24 | $ | 25 | |||||||||||
Aggregate intrinsic value (A) | $ | 62 million | $ | 22 million | $ | 4 million | |||||||||||
Weighted average remaining option term (in years) | 3 | 4 | 4 | ||||||||||||||
(A) | |||||||||||||||||
Aggregate intrinsic value is calculated using the Company's stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares. | |||||||||||||||||
At December 31, 2013, 2012 and 2011, there was $9 million, $15 million and $33 million, respectively, of unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options; such options had a weighted average remaining vesting period of two years in 2013, two years in 2012 and three years in 2011. | |||||||||||||||||
The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model were as follows: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Weighted average grant date fair value | $ | 8.35 | $ | 4.44 | $ | 5.07 | |||||||||||
Risk-free interest rate | 1.22 | % | 1.09 | % | 2.69 | % | |||||||||||
Dividend yield | 1.47 | % | 2.57 | % | 2.35 | % | |||||||||||
Volatility factor | 49.07 | % | 50.97 | % | 49.03 | % | |||||||||||
Expected option life | 6 years | 6 years | 6 years | ||||||||||||||
The following table summarizes information for stock option shares outstanding and exercisable at December 31, 2013, shares in millions: | |||||||||||||||||
Option Shares Outstanding | Option Shares Exercisable | ||||||||||||||||
Range of | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||||
Prices | Shares | Average | Average | Shares | Average | ||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||
Option | Price | Price | |||||||||||||||
Term | |||||||||||||||||
$ | 21-Aug | 13 | 6 Years | $ | 14 | 8 | $ | 15 | |||||||||
$ | 26 - 28 | 3 | 2 Years | $ | 27 | 3 | $ | 27 | |||||||||
$ | 29 - 31 | 8 | 2 Years | $ | 30 | 9 | $ | 30 | |||||||||
$ | 33 - 36 | — | 2 Years | $ | 34 | — | $ | 34 | |||||||||
| | | | | | | | | | | | | | | | | |
$ | Aug-36 | 24 | 4 Years | $ | 22 | 20 | $ | 24 | |||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Phantom Stock Awards and Stock Appreciation Rights ("SARs"). The Company grants phantom stock awards and SARs to certain non-U.S. employees. | |||||||||||||||||
Phantom stock awards are linked to the value of the Company's common stock on the date of grant and are settled in cash upon vesting, typically over 5 to 10 years. The Company accounts for phantom stock awards as liability-based awards; the compensation expense is initially measured as the market price of the Company's common stock at the grant date and is recognized over the vesting period. The liability is remeasured and adjusted at the end of each reporting period until the awards are fully-vested and paid to the employees. The Company recognized expense of $5 million, $7 million and $2 million related to the valuation of phantom stock awards for 2013, 2012 and 2011, respectively. In 2013, 2012 and 2011, the Company granted 165,180 shares, 162,310 shares and 349,550 shares, respectively, of phantom stock awards with an aggregate fair value of $3 million, $2 million and $4 million, respectively, and paid $4 million, $3 million and $2 million of cash in 2013, 2012 and 2011, respectively, to settle phantom stock awards. | |||||||||||||||||
SARs are linked to the value of the Company's common stock on the date of grant and are settled in cash upon exercise. The Company accounts for SARs using the fair value method, which requires outstanding SARs to be classified as liability-based awards and valued using a Black-Scholes option pricing model at the grant date; such fair value is recognized as compensation expense over the vesting period, typically five years. The liability is remeasured and adjusted at the end of each reporting period until the SARs are exercised and payment is made to the employees or the SARs expire. The Company recognized expense (income) of $2 million, $4 million and $(1) million related to the valuation of SARs for 2013, 2012 and 2011, respectively. During 2013, 2012 and 2011, the Company did not grant any SARs. | |||||||||||||||||
Information related to phantom stock awards and SARs was as follows, in millions: | |||||||||||||||||
Phantom | Stock | ||||||||||||||||
Stock | Appreciation | ||||||||||||||||
Awards | Rights | ||||||||||||||||
At December 31, | At December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Accrued compensation cost liability | $ | 14 | $ | 11 | $ | 8 | $ | 6 | |||||||||
Unrecognized compensation cost | $ | 4 | $ | 5 | $ | — | $ | 1 | |||||||||
Equivalent common shares | 1 | 1 | 2 | 2 |
EMPLOYEE_RETIREMENT_PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
EMPLOYEE RETIREMENT PLANS | ' | |||||||||||||||||||
EMPLOYEE RETIREMENT PLANS | ' | |||||||||||||||||||
M. EMPLOYEE RETIREMENT PLANS | ||||||||||||||||||||
The Company sponsors qualified defined-benefit and defined-contribution retirement plans for most of its employees. In addition to the Company's qualified defined-benefit pension plans, the Company has unfunded non-qualified defined-benefit pension plans covering certain employees, which provide for benefits in addition to those provided by the qualified pension plans. Substantially all salaried employees participate in non-contributory defined-contribution retirement plans, to which payments are determined annually by the Organization and Compensation Committee of the Board of Directors. Aggregate charges to earnings under the Company's defined-benefit and defined-contribution retirement plans were $31 million and $54 million in 2013, $36 million and $43 million in 2012 and $34 million and $31 million in 2011, respectively. | ||||||||||||||||||||
In addition, the Company participates in 20 regional multi-employer pension plans, principally related to building trades; none of the plans are considered significant. The aggregate expense recognized through contributions by the Company to these plans was approximately $4 million, $4 million and $3 million in 2013, 2012 and 2011, respectively. | ||||||||||||||||||||
In March 2009, based on management's recommendation, the Board of Directors approved a plan to freeze all future benefit accruals under substantially all of the Company's domestic qualified and non-qualified defined-benefit pension plans. The freeze was effective January 1, 2010. | ||||||||||||||||||||
Changes in the projected benefit obligation and fair value of plan assets, and the funded status of the Company's defined-benefit pension plans were as follows, in millions: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Changes in projected benefit obligation: | ||||||||||||||||||||
Projected benefit obligation at January 1 | $ | 1,056 | $ | 181 | $ | 943 | $ | 174 | ||||||||||||
Service cost | 3 | — | 2 | — | ||||||||||||||||
Interest cost | 40 | 6 | 42 | 7 | ||||||||||||||||
Actuarial (gain) loss, net | (81 | ) | (13 | ) | 100 | 11 | ||||||||||||||
Foreign currency exchange | 7 | — | 9 | — | ||||||||||||||||
Benefit payments | (42 | ) | (11 | ) | (40 | ) | (11 | ) | ||||||||||||
| | | | | | | | | | | | | | |||||||
Projected benefit obligation at December 31 | $ | 983 | $ | 163 | $ | 1,056 | $ | 181 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Changes in fair value of plan assets: | ||||||||||||||||||||
Fair value of plan assets at January 1 | $ | 594 | $ | — | $ | 504 | $ | — | ||||||||||||
Actual return on plan assets | 65 | — | 75 | — | ||||||||||||||||
Foreign currency exchange | 2 | — | 4 | — | ||||||||||||||||
Company contributions | 44 | 11 | 55 | 11 | ||||||||||||||||
Expenses, other | (4 | ) | — | (4 | ) | — | ||||||||||||||
Benefit payments | (42 | ) | (11 | ) | (40 | ) | (11 | ) | ||||||||||||
| | | | | | | | | | | | | | |||||||
Fair value of plan assets at December 31 | $ | 659 | $ | — | $ | 594 | $ | — | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Funded status at December 31: | $ | (324 | ) | $ | (163 | ) | $ | (462 | ) | $ | (181 | ) | ||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Amounts in the Company's consolidated balance sheets were as follows, in millions: | ||||||||||||||||||||
At December 31, 2013 | At December 31, 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Accrued liabilities | $ | (3 | ) | $ | (12 | ) | $ | (3 | ) | $ | (12 | ) | ||||||||
Deferred income taxes and other | (321 | ) | (151 | ) | (459 | ) | (169 | ) | ||||||||||||
| | | | | | | | | | | | | | |||||||
Total net liability | $ | (324 | ) | $ | (163 | ) | $ | (462 | ) | $ | (181 | ) | ||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Unrealized loss included in accumulated other comprehensive income before income taxes were as follows, in millions: | ||||||||||||||||||||
At December 31, 2013 | At December 31, 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Net loss | $ | 344 | $ | 38 | $ | 467 | $ | 53 | ||||||||||||
Net transition obligation | 1 | — | 1 | — | ||||||||||||||||
Net prior service cost | 2 | — | 2 | — | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 347 | $ | 38 | $ | 470 | $ | 53 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions: | ||||||||||||||||||||
At December 31 | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Projected benefit obligation | $ | 983 | $ | 163 | $ | 1,056 | $ | 181 | ||||||||||||
Accumulated benefit obligation | $ | 982 | $ | 163 | $ | 1,054 | $ | 181 | ||||||||||||
Fair value of plan assets | $ | 659 | $ | — | $ | 594 | $ | — | ||||||||||||
The projected benefit obligation was in excess of plan assets for all of the Company's qualified defined-benefit pension plans at December 31, 2013 and 2012. | ||||||||||||||||||||
Net periodic pension cost for the Company's defined-benefit pension plans was as follows, in millions: | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||
Service cost | $ | 3 | $ | — | $ | 2 | $ | — | $ | 2 | $ | — | ||||||||
Interest cost | 44 | 6 | 46 | 7 | 47 | 8 | ||||||||||||||
Expected return on plan assets | (40 | ) | — | (35 | ) | — | (36 | ) | — | |||||||||||
Recognized prior service cost | — | — | — | — | — | — | ||||||||||||||
Recognized net loss | 16 | 2 | 14 | 2 | 10 | 1 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Net periodic pension cost | $ | 23 | $ | 8 | $ | 27 | $ | 9 | $ | 23 | $ | 9 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The Company expects to recognize $13 million of pre-tax net loss from accumulated other comprehensive income into net periodic pension cost in 2014 related to its defined-benefit pension plans. | ||||||||||||||||||||
Plan Assets. The Company's qualified defined-benefit pension plan weighted average asset allocation, which is based upon fair value, was as follows: | ||||||||||||||||||||
At December 31 | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Equity securities | 47 | % | 44 | % | ||||||||||||||||
Debt securities | 35 | % | 41 | % | ||||||||||||||||
Other | 18 | % | 15 | % | ||||||||||||||||
| | | | | | | | |||||||||||||
Total | 100 | % | 100 | % | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Plan assets included 600,000 shares of Company common stock valued at $10 million at December 31, 2012. The shares of Company common stock were sold in 2013. | ||||||||||||||||||||
The Company's qualified defined-benefit pension plans have adopted accounting guidance that defines fair value, establishes a framework for measuring fair value and prescribes disclosures about fair value measurements. Accounting guidance defines fair value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." | ||||||||||||||||||||
Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2013. | ||||||||||||||||||||
Common and Preferred Stocks: Valued at the closing price on the active market on which the individual securities are traded, or based on the active market for similar securities. | ||||||||||||||||||||
Private Equity and Hedge Funds: Valued based on an estimated fair value using either a market approach or an income approach, each of which requires a significant degree of judgment. There is no active trading market for these investments and they are for the most part illiquid. Due to the significant unobservable inputs, the fair value measurements used to estimate fair value are a Level 3 input. | ||||||||||||||||||||
Corporate Debt Securities: Valued based on the active market for similar securities or on estimated fair value. | ||||||||||||||||||||
Government and Other Debt Securities: Valued based on either the closing price reported on the active market on which the individual securities are traded, the market for similar securities or estimated fair value based on a model for similar securities. | ||||||||||||||||||||
Common Collective Trust Fund: Valued based on a unit value basis, which approximates fair value as of December 31, 2013 and 2012, respectively. Such basis is determined by reference to the respective fund's underlying assets, which are primarily marketable equity and fixed income securities. There are no unfunded commitments or other restrictions associated with this fund. | ||||||||||||||||||||
Short-Term and Other Investments: Valued based on a net asset value (NAV) which approximates fair value at December 31, 2013 and 2012, respectively. Such basis is determined by referencing the respective fund's underlying assets. | ||||||||||||||||||||
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. | ||||||||||||||||||||
The following table sets forth by level, within the fair value hierarchy, the qualified defined-benefit pension plan assets at fair value as of December 31, 2013 and 2012, in millions. | ||||||||||||||||||||
Assets at Fair Value as of | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Common and Preferred Stocks: | ||||||||||||||||||||
United States | $ | 143 | $ | 107 | $ | — | $ | 250 | ||||||||||||
International | 46 | 16 | — | 62 | ||||||||||||||||
Private Equity and Hedge Funds | ||||||||||||||||||||
United States | — | — | 52 | 52 | ||||||||||||||||
International | — | — | 24 | 24 | ||||||||||||||||
Corporate Debt Securities: | ||||||||||||||||||||
United States | 15 | 25 | — | 40 | ||||||||||||||||
International | — | 61 | — | 61 | ||||||||||||||||
Government and Other Debt Securities: | ||||||||||||||||||||
United States | 79 | 1 | — | 80 | ||||||||||||||||
International | 23 | 27 | — | 50 | ||||||||||||||||
Common Collective Trust Fund – United States | — | 3 | — | 3 | ||||||||||||||||
Short-Term and Other Investments | ||||||||||||||||||||
United States | 2 | 2 | — | 4 | ||||||||||||||||
International | 10 | 6 | 17 | 33 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total Assets at Fair Value | $ | 318 | $ | 248 | $ | 93 | $ | 659 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Assets at Fair Value as of | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Common and Preferred Stocks: | ||||||||||||||||||||
United States | $ | 127 | $ | 61 | $ | — | $ | 188 | ||||||||||||
International | 61 | 10 | — | 71 | ||||||||||||||||
Private Equity and Hedge Funds | ||||||||||||||||||||
United States | — | — | 52 | 52 | ||||||||||||||||
International | — | — | 11 | 11 | ||||||||||||||||
Corporate Debt Securities: | ||||||||||||||||||||
United States | — | 25 | — | 25 | ||||||||||||||||
International | — | 73 | — | 73 | ||||||||||||||||
Government and Other Debt Securities: | ||||||||||||||||||||
United States | 51 | 42 | — | 93 | ||||||||||||||||
International | 24 | 29 | — | 53 | ||||||||||||||||
Common Collective Trust Fund – United States | — | 12 | — | 12 | ||||||||||||||||
Short-Term and Other Investments | ||||||||||||||||||||
United States | 1 | — | — | 1 | ||||||||||||||||
International | — | — | 15 | 15 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total Assets at Fair Value | $ | 264 | $ | 252 | $ | 78 | $ | 594 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Changes in the fair value of the qualified defined-benefit pension plan level 3 assets, were as follows, in millions: | ||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||
Fair Value, January 1 | $ | 78 | $ | 72 | ||||||||||||||||
Purchases | 25 | 9 | ||||||||||||||||||
Sales | (14 | ) | (8 | ) | ||||||||||||||||
Transfers from Level 2 to Level 3 | — | — | ||||||||||||||||||
Unrealized gains (losses) | 4 | 5 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Fair Value, December 31 | $ | 93 | $ | 78 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Assumptions. Major assumptions used in accounting for the Company's defined-benefit pension plans were as follows: | ||||||||||||||||||||
December 31 | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Discount rate for obligations | 4.4 | % | 3.8 | % | 4.4 | % | ||||||||||||||
Expected return on plan assets | 7.25 | % | 7.25 | % | 7.25 | % | ||||||||||||||
Rate of compensation increase | — | % | — | % | — | % | ||||||||||||||
Discount rate for net periodic pension cost | 3.8 | % | 4.4 | % | 5.3 | % | ||||||||||||||
The discount rate for obligations for 2013 and 2012 was based upon the expected duration of each defined-benefit pension plan's liabilities matched to the December 31, 2013 and 2012 Towers Watson Rate Link Curve. At December 31, 2013, such rates for the Company's defined-benefit pension plans ranged from 1.75 percent to 4.80 percent, with the most significant portion of the liabilities having a discount rate for obligations of 4.20 percent or higher. At December 31, 2012, such rates for the Company's defined-benefit pension plans ranged from 1.75 percent to 4.50 percent, with the most significant portion of the liabilities having a discount rate for obligations of 3.40 percent or higher. The increase in the weighted average discount rate over the last year is principally the result of increasing long-term interest rates in the bond markets. The weighted average discount rates were also affected by the freezing of all future benefit accruals for substantially all of the Company's domestic qualified and non-qualified defined-benefit plans, which shortened the period of future payments. | ||||||||||||||||||||
For 2013 and 2012, the Company determined the expected long-term rate of return on plan assets of 7.25 percent based upon an analysis of expected and historical rates of return of various asset classes utilizing the current and long-term target asset allocation of the plan assets. The projected asset return at both December 31, 2013 and 2012 also considered near term returns, including current market conditions and also that pension assets are long-term in nature. The actual annual rate of return on the Company's pension plan assets was 5.9 percent and 6.9 percent for the 10-year periods ended December 31, 2013 and 2012, respectively. Although these rates of return are less than the Company's current expected long-term rate of return on plan assets, the Company notes that the 10-year period ended December 31, 2012 includes one significant decline in the equity markets. In 2013, actual annual rate of return on the Company's pension plan assets was 13.6 percent. Accordingly, the Company believes a 7.25 percent expected long-term rate of return is reasonable. | ||||||||||||||||||||
The investment objectives seek to minimize the volatility of the value of the Company's plan assets relative to pension liabilities and to ensure plan assets are sufficient to pay plan benefits. In 2013, the Company achieved its targeted asset allocation: 38 percent equities, 22 percent fixed-income, 20 percent global assets (combination of equity and fixed-income) and 20 percent alternative investments (such as private equity, commodities and hedge funds). The asset allocation of the investment portfolio was developed with the objective of achieving the Company's expected rate of return and reducing volatility of asset returns, and considered the freezing of future benefits. The equity portfolios are invested in individual securities or funds that are expected to mirror broad market returns for equity securities. The fixed-income portfolio is invested in corporate bonds, bond index funds or U.S. Treasury securities. The increased allocation to fixed-income securities partially matches the bond-like and long-term nature of the pension liabilities. It is expected that the alternative investments would have a higher rate of return than the targeted overall long-term return of 7.25 percent. However, these investments are subject to greater volatility, due to their nature, than a portfolio of equities and fixed-income investments, and would be less liquid than financial instruments that trade on public markets. This portfolio is expected to yield a long-term rate of return of 7.25 percent. | ||||||||||||||||||||
The fair value of the Company's plan assets is subject to risk including significant concentrations of risk in the Company's plan assets related to equity, interest rate and operating risk. In order to ensure plan assets are sufficient to pay benefits, a portion of plan assets is allocated to equity investments that are expected, over time, to earn higher returns with more volatility than fixed-income investments which more closely match pension liabilities. Within equity, risk is mitigated by targeting a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process. | ||||||||||||||||||||
In order to minimize asset volatility relative to the liabilities, a portion of plan assets are allocated to fixed-income investments that are exposed to interest rate risk. Rate increases generally will result in a decline in fixed-income assets, while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. | ||||||||||||||||||||
Potential events or circumstances that could have a negative effect on estimated fair value include the risks of inadequate diversification and other operating risks. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight, plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance and audit reviews to ensure adherence to these policies. In addition, the Company periodically seeks the input of its independent advisor to ensure the investment policy is appropriate. | ||||||||||||||||||||
Other. The Company sponsors certain post-retirement benefit plans that provide medical, dental and life insurance coverage for eligible retirees and dependents in the United States based upon age and length of service. The aggregate present value of the unfunded accumulated post-retirement benefit obligation was $10 million and $12 million at December 31, 2013 and 2012, respectively. | ||||||||||||||||||||
Cash Flows. At December 31, 2013, the Company expected to contribute approximately $45 million to its qualified defined-benefit pension plans to meet ERISA requirements in 2014. The Company also expected to pay benefits of $7 million and $12 million to participants of its foreign and non-qualified (domestic) defined-benefit pension plans, respectively, in 2014. | ||||||||||||||||||||
At December 31, 2013, the benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter, relating to the Company's defined-benefit pension plans, were as follows, in millions: | ||||||||||||||||||||
Qualified | Non-Qualified | |||||||||||||||||||
Plans | Plans | |||||||||||||||||||
2014 | $ | 45 | $ | 12 | ||||||||||||||||
2015 | $ | 47 | $ | 12 | ||||||||||||||||
2016 | $ | 48 | $ | 12 | ||||||||||||||||
2017 | $ | 49 | $ | 12 | ||||||||||||||||
2018 | $ | 50 | $ | 12 | ||||||||||||||||
2019 - 2023 | $ | 273 | $ | 59 |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
SHAREHOLDERS' EQUITY | ' | |||||||
SHAREHOLDERS' EQUITY | ' | |||||||
N. SHAREHOLDERS' EQUITY | ||||||||
In July 2007, the Company's Board of Directors authorized the repurchase for retirement of up to 50 million shares of the Company's common stock in open-market transactions or otherwise. The Company had remaining authorization to repurchase up to 22.6 million shares and 24.3 million shares at December 31, 2013 and 2012, respectively. | ||||||||
During 2013, the Company repurchased and retired 1.7 million shares of Company common stock for cash aggregating $35 million, to offset the dilutive impact of the 2013 grant of 1.7 million shares of long-term stock awards. During 2012, the Company repurchased and retired one million shares of Company common stock, for cash aggregating $8 million to offset the dilutive impact of the 2012 grant of one million shares of long-term stock awards. The Company repurchased and retired two million common shares in 2011 for cash aggregating $30 million. | ||||||||
On the basis of amounts paid (declared), cash dividends per common share were $.30 ($.30) in each of 2013, 2012 and 2011. | ||||||||
Accumulated Other Comprehensive Income. The components of accumulated other comprehensive income attributable to Masco Corporation were as follows, in millions: | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Cumulative translation adjustments | $ | 418 | $ | 501 | ||||
Unrealized loss on marketable securities, net | (12 | ) | (12 | ) | ||||
Unrealized loss on interest rate swaps | (19 | ) | (21 | ) | ||||
Unrecognized prior service cost and net loss, net | (272 | ) | (409 | ) | ||||
| | | | | | | | |
Accumulated other comprehensive income | $ | 115 | $ | 59 | ||||
| | | | | | | | |
| | | | | | | | |
The unrealized loss on marketable securities, net, is reported net of income tax expense of $14 million at both December 31, 2013 and 2012. The unrecognized prior service cost and net loss, net, is reported net of income tax benefit of $105 million and $107 million at December 31, 2013 and 2012. | ||||||||
RECLASSIFICATIONS_FROM_OTHER_C
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME | ' | |||||||||||
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME | ' | |||||||||||
O. RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME | ||||||||||||
The reclassifications from accumulated other comprehensive income to the income statement were as follows, in millions: | ||||||||||||
Amount Reclassified | ||||||||||||
Twelve Months Ended December 31, | ||||||||||||
Accumulated Other | 2013 | 2012 | 2011 | Income Statement Line Item | ||||||||
Comprehensive Income | ||||||||||||
Amortization of defined benefit pension: | ||||||||||||
Actuarial losses, net | $ | 18 | $ | 16 | $ | 11 | Selling, General & Administrative Expense | |||||
2 | (9 | ) | 5 | Tax expense (benefit) | ||||||||
| | | | | | | | | | | | |
$ | 20 | $ | 7 | $ | 16 | Net of tax | ||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Interest rate swaps | $ | 2 | $ | 2 | $ | — | Interest expense | |||||
— | — | — | Tax expense | |||||||||
| | | | | | | | | | | | |
$ | 2 | $ | 2 | $ | — | Net of tax | ||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||||||
P. SEGMENT INFORMATION | |||||||||||||||||||||||||||||
The Company's reportable segments are as follows: | |||||||||||||||||||||||||||||
Cabinets and Related Products – principally includes assembled kitchen and bath cabinets; home office workstations; entertainment centers; storage products; bookcases; and kitchen utility products. | |||||||||||||||||||||||||||||
Plumbing Products – principally includes faucets; plumbing fittings and valves; showerheads and hand showers; bathtubs and shower enclosures; and spas. | |||||||||||||||||||||||||||||
Installation and Other Services – principally includes the sale, installation and distribution of insulation and other building products. | |||||||||||||||||||||||||||||
Decorative Architectural Products – principally includes paints and stains; and cabinet, door, window and other hardware. | |||||||||||||||||||||||||||||
Other Specialty Products – principally includes windows, window frame components and patio doors; staple gun tackers, staples and other fastening tools. | |||||||||||||||||||||||||||||
The above products and services are sold to the home improvement and new home construction markets through mass merchandisers, hardware stores, home centers, builders, distributors and other outlets for consumers and contractors. | |||||||||||||||||||||||||||||
The Company's operations are principally located in North America and Europe. The Company's country of domicile is the United States of America. | |||||||||||||||||||||||||||||
Corporate assets consist primarily of real property, equipment, cash and cash investments and other investments. | |||||||||||||||||||||||||||||
The Company's segments are based upon similarities in products and services and represent the aggregation of operating units, for which financial information is regularly evaluated by the Company's corporate operating executives in determining resource allocation and assessing performance, and is periodically reviewed by the Board of Directors. Accounting policies for the segments are the same as those for the Company. The Company primarily evaluates performance based upon operating profit (loss) and, other than general corporate expense, allocates specific corporate overhead to each segment. The evaluation of segment operating profit (loss) also excludes the charge for litigation settlements, net, and the gain on sale of fixed assets, net. | |||||||||||||||||||||||||||||
Information about the Company by segment and geographic area was as follows, in millions: | |||||||||||||||||||||||||||||
Net Sales | Operating Profit (Loss) (5)(6) | Assets at | |||||||||||||||||||||||||||
(1)(2)(3)(4)(5) | December 31 (9)(10) | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||
The Company's operations by segment were: | |||||||||||||||||||||||||||||
Cabinets and Related Products | $ | 1,014 | $ | 939 | $ | 934 | $ | (10 | ) | $ | (89 | ) | $ | (126 | ) | $ | 659 | $ | 700 | $ | 792 | ||||||||
Plumbing Products | 3,183 | 2,955 | 2,913 | 394 | 307 | 322 | 2,040 | 2,012 | 1,959 | ||||||||||||||||||||
Installation and Other Services | 1,412 | 1,209 | 1,077 | 37 | (19 | ) | (79 | ) | 1,465 | 1,444 | 1,427 | ||||||||||||||||||
Decorative Architectural Products | 1,927 | 1,818 | 1,670 | 351 | 329 | 196 | 812 | 799 | 770 | ||||||||||||||||||||
Other Specialty Products | 637 | 574 | 576 | 35 | (31 | ) | (401 | ) | 693 | 704 | 768 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 8,173 | $ | 7,495 | $ | 7,170 | $ | 807 | $ | 497 | $ | (88 | ) | $ | 5,669 | $ | 5,659 | $ | 5,716 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Company's operations by geographic area were: | |||||||||||||||||||||||||||||
North America | $ | 6,634 | $ | 6,046 | $ | 5,669 | $ | 649 | $ | 360 | $ | (259 | ) | $ | 4,295 | $ | 4,363 | $ | 4,441 | ||||||||||
International, principally Europe | 1,539 | 1,449 | 1,501 | 158 | 137 | 171 | 1,374 | 1,296 | 1,275 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total, as above | $ | 8,173 | $ | 7,495 | $ | 7,170 | 807 | 497 | (88 | ) | 5,669 | 5,659 | 5,716 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General corporate expense, net (7) | (134 | ) | (126 | ) | (118 | ) | |||||||||||||||||||||||
Charge for litigation settlements, net (8) | — | (77 | ) | (9 | ) | ||||||||||||||||||||||||
Gain from sales of fixed assets, net | — | 8 | — | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating profit (loss), as reported | 673 | 302 | (215 | ) | |||||||||||||||||||||||||
(239 | ) | (229 | ) | (177 | ) | ||||||||||||||||||||||||
Other income (expense), net | |||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | $ | 434 | $ | 73 | $ | (392 | ) | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate assets | 1,264 | 1,013 | 1,339 | ||||||||||||||||||||||||||
Assets held for sale | — | 203 | 242 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 6,933 | $ | 6,875 | $ | 7,297 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and Amortization (5) | |||||||||||||||||||||||||||||
Property Additions (5) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||
The Company's operations by segment were: | |||||||||||||||||||||||||||||
Cabinets and Related Products | $ | 9 | $ | 15 | $ | 14 | $ | 42 | $ | 57 | $ | 66 | |||||||||||||||||
Plumbing Products | 71 | 67 | 85 | 65 | 69 | 68 | |||||||||||||||||||||||
Installation and Other Services | 14 | 11 | 9 | 27 | 30 | 32 | |||||||||||||||||||||||
Decorative Architectural Products | 16 | 11 | 8 | 17 | 15 | 15 | |||||||||||||||||||||||
Other Specialty Products | 10 | 11 | 17 | 22 | 21 | 48 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
120 | 115 | 133 | 173 | 192 | 229 | ||||||||||||||||||||||||
Unallocated amounts, principally related to corporate assets | 4 | 2 | 6 | 11 | 11 | 16 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
Total | $ | 124 | $ | 117 | $ | 139 | $ | 184 | $ | 203 | $ | 245 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
-1 | |||||||||||||||||||||||||||||
Included in net sales were export sales from the U.S. of $227 million, $229 million and $241 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
-2 | |||||||||||||||||||||||||||||
Excluded from net sales were intra-company sales between segments of approximately two percent of net sales in each of 2013, 2012 and 2011. | |||||||||||||||||||||||||||||
-3 | |||||||||||||||||||||||||||||
Included in net sales were sales to one customer of $2,280 million, $2,143 million and $1,984 million in 2013, 2012 and 2011, respectively. Such net sales were included in the following segments: Cabinets and Related Products, Plumbing Products, Decorative Architectural Products and Other Specialty Products. | |||||||||||||||||||||||||||||
-4 | |||||||||||||||||||||||||||||
Net sales from the Company's operations in the U.S. were $6,359 million, $5,793 million and $5,394 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
-5 | |||||||||||||||||||||||||||||
Net sales, operating (loss) profit, property additions and depreciation and amortization expense for 2013, 2012 and 2011 excluded the results of businesses reported as discontinued operations in 2013, 2012 and 2011. | |||||||||||||||||||||||||||||
-6 | |||||||||||||||||||||||||||||
Included in segment operating profit (loss) for 2012 was an impairment charge for other intangible assets as follows: Other Specialty Products – $42 million. Included in segment operating (loss) profit for 2011 were impairment charges for goodwill and other intangible assets as follows: Plumbing Products – $1 million; Decorative Architectural Products – $75 million; and Other Specialty Products – $374 million. | |||||||||||||||||||||||||||||
-7 | |||||||||||||||||||||||||||||
General corporate expense, net included those expenses not specifically attributable to the Company's segments. | |||||||||||||||||||||||||||||
-8 | |||||||||||||||||||||||||||||
The charge for litigation settlement, net in 2012 primarily relates to a business in the Installation and Other Services segment and in 2011 relates to business units in the Cabinets and Related Products and the Other Specialty Products segments. | |||||||||||||||||||||||||||||
-9 | |||||||||||||||||||||||||||||
Long-lived assets of the Company's operations in the U.S. and Europe were $2,685 million and $481 million, $2,792 million and $467 million, and $2,962 million and $455 million at December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
-10 | |||||||||||||||||||||||||||||
Segment assets for 2012 and 2011 excluded the assets of businesses reported as discontinued operations in the respective years. | |||||||||||||||||||||||||||||
SEVERANCE_COSTS
SEVERANCE COSTS | 12 Months Ended |
Dec. 31, 2013 | |
SEVERANCE COSTS | ' |
SEVERANCE COSTS | ' |
Q. SEVERANCE COSTS | |
As part of the Company's continuing review of its operations, actions were taken during 2013, 2012 and 2011 to respond to market conditions. The Company recorded charges related to severance and early retirement programs of $20 million, $35 million and $15 million for the years ended December 31, 2013, 2012 and 2011, respectively. Such charges are principally reflected in the statement of operations in selling, general and administrative expenses and were paid when incurred. | |
OTHER_INCOME_EXPENSE_NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
OTHER INCOME (EXPENSE), NET | ' | ||||||||||
OTHER INCOME (EXPENSE), NET | ' | ||||||||||
R. OTHER INCOME (EXPENSE), NET | |||||||||||
Other, net, which is included in other income (expense), net, was as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income from cash and cash investments | $ | 3 | $ | 6 | $ | 8 | |||||
Other interest income | 2 | 1 | 1 | ||||||||
Income from financial investments, net (Note E) | 11 | 22 | 73 | ||||||||
Other items, net | (20 | ) | (4 | ) | (5 | ) | |||||
| | | | | | | | | | | |
Total other, net | $ | (4 | ) | $ | 25 | $ | 77 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
In 2013, in conjunction with the transaction to sell the Danish ready-to-assemble cabinet business (included in discontinued operations), the Company also disposed of a related Danish holding company. This disposition triggered the settlement of loans, which resulted in the recognition of $18 million of currency translation expense, which is included in other income (expense) from continuing operations in the statement of operations. | |||||||||||
Other items, net, included realized foreign currency transaction losses of $18 million (discussed above), $2 million and $5 million in 2013, 2012 and 2011, respectively, as well as other miscellaneous items. | |||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
INCOME TAXES | ' | ||||||||||
INCOME TAXES | ' | ||||||||||
S. INCOME TAXES | |||||||||||
(In Millions) | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income (loss) from continuing operations before income taxes: | |||||||||||
U.S. | $ | 279 | $ | (84 | ) | $ | (575 | ) | |||
Foreign | 155 | 157 | 183 | ||||||||
| | | | | | | | | | | |
$ | 434 | $ | 73 | $ | (392 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income tax expense (benefit) on income (loss) from continuing operations: | |||||||||||
Currently payable: | |||||||||||
U.S. Federal | $ | 3 | $ | — | $ | — | |||||
State and local | 4 | (2 | ) | (1 | ) | ||||||
Foreign | 58 | 51 | 63 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 41 | 31 | (103 | ) | |||||||
State and local | 7 | 7 | — | ||||||||
Foreign | (2 | ) | 4 | 1 | |||||||
| | | | | | | | | | | |
$ | 111 | $ | 91 | $ | (40 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred tax assets at December 31: | |||||||||||
Receivables | $ | 12 | $ | 14 | |||||||
Inventories | 23 | 24 | |||||||||
Other assets, principally stock-based compensation | 103 | 118 | |||||||||
Accrued liabilities | 157 | 156 | |||||||||
Long-term liabilities | 195 | 253 | |||||||||
Net operating loss carryforward | 317 | 400 | |||||||||
Tax credit carryforward | 38 | 25 | |||||||||
| | | | | | | | | | | |
845 | 990 | ||||||||||
Valuation allowance | (670 | ) | (787 | ) | |||||||
| | | | | | | | | | | |
175 | 203 | ||||||||||
| | | | | | | | | | | |
Deferred tax liabilities at December 31: | |||||||||||
Property and equipment | 148 | 180 | |||||||||
Intangibles | 342 | 286 | |||||||||
Investment in foreign subsidiaries | 5 | 8 | |||||||||
Other | 4 | 9 | |||||||||
| | | | | | | | | | | |
499 | 483 | ||||||||||
| | | | | | | | | | | |
Net deferred tax liability at December 31 | $ | 324 | $ | 280 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
At December 31, 2013 and 2012, the net deferred tax liability consisted of net short-term deferred tax assets included in prepaid expenses and other of $73 million and $41 million, respectively, and net long-term deferred tax liabilities included in deferred income taxes and other of $397 million and $321 million, respectively. | |||||||||||
The current portion of the state and local income tax includes an $8 million, $14 million and $10 million tax benefit from the reversal of an accrual for uncertain tax positions resulting primarily from the expiration of applicable statutes of limitations and favorable settlements on state audits in 2013, 2012 and 2011, respectively. The deferred portion of the state and local taxes includes a $13 million, $26 million and $31 million non-cash charge to income tax expense resulting from a change in the valuation allowance against state and local deferred tax assets in 2013, 2012 and 2011, respectively. | |||||||||||
The accounting guidance for income taxes requires that the future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. | |||||||||||
If, based upon all available evidence, both positive and negative, it is more likely than not (more than 50 percent likely) such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company's three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable and the accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets. | |||||||||||
In the fourth quarter of 2010, the Company recorded a $372 million valuation allowance against its U.S. Federal deferred tax assets as a non-cash charge to income tax expense. In reaching this conclusion, the Company considered the weaker retail sales of certain of its building products and the slower than anticipated recovery in the U.S. housing market which led to U.S. operating losses and significant U.S. goodwill impairment charges, that primarily occurred in the fourth quarter of 2010, causing the Company to be in a three-year cumulative U.S. loss position. | |||||||||||
During 2012 and 2011, objective and verifiable negative evidence, such as U.S. operating losses and significant impairment charges for U.S. goodwill in 2011 and other intangible assets, continued to outweigh positive evidence necessary to reduce the valuation allowance. As a result, the Company recorded increases of $65 million and $89 million in the valuation allowance against its U.S. Federal deferred tax assets as a non-cash charge to income tax expense in 2012 and 2011, respectively. | |||||||||||
A return to sustainable profitability in the U.S. is required before we would change our judgment regarding the need for a valuation allowance against our deferred tax assets. | |||||||||||
Although the recent strengthening in new home construction activity has resulted in profitability in the Company's U.S. operations in 2013, we continue to record a full valuation allowance against the U.S. Federal deferred tax assets as the Company remained in a three-year cumulative loss position throughout 2013. | |||||||||||
It is reasonably possible that the continued improvements in our U.S. operations could result in the objective positive evidence necessary to warrant the reversal of all or a portion of the valuation allowance, up to approximately $550 million, as early as the second half of 2014. Until such time, the profits from our U.S. operations will be offset by the net operating loss carryforward resulting in a lower U.S. effective tax rate. | |||||||||||
The $175 million and $203 million of deferred tax assets at December 31, 2013 and 2012, respectively, for which there is no valuation allowance recorded, is anticipated to be realized through the future reversal of existing taxable temporary differences recorded as deferred tax liabilities. | |||||||||||
Of the deferred tax asset related to the net operating loss and tax credit carryforwards at December 31, 2013 $345 million will expire between 2020 and 2033 and $10 million is unlimited. Of the deferred tax asset related to the net operating loss and tax credit carryforwards at December 31, 2012 $411 million will expire between 2020 and 2032 and $14 million is unlimited. | |||||||||||
The tax benefit from certain stock-based compensation is not recognized as a deferred tax asset until the tax deduction reduces cash taxes. Accordingly, as of December 31, 2013, the Company has not recorded a $53 million deferred tax asset on additional net operating losses that, when realized, will be recorded to paid-in capital. | |||||||||||
A tax provision has not been provided at December 31, 2013 for U.S. income taxes or additional foreign withholding taxes on approximately $10 million of undistributed earnings of certain foreign subsidiaries that are considered to be permanently reinvested. It is not practicable to determine the amount of deferred tax liability on such earnings as the actual U.S. tax would depend on income tax laws and circumstances at the time of distribution. | |||||||||||
A reconciliation of the U.S. Federal statutory tax rate to the income tax expense (benefit) on income (loss) from continuing operations was as follows: | |||||||||||
2013 | 2012 | 2011 | |||||||||
U.S. Federal statutory tax rate – expense (benefit) | 35 | % | 35 | % | (35 | )% | |||||
State and local taxes, net of U.S. Federal tax benefit | 2 | 4 | — | ||||||||
Lower taxes on foreign earnings | — | (9 | ) | — | |||||||
U.S. and foreign taxes on distributed and undistributed foreign earnings | — | 1 | — | ||||||||
Goodwill and other intangible assets impairment charges providing no tax benefit | — | 2 | 3 | ||||||||
U.S. Federal valuation allowance | (11 | ) | 89 | 24 | |||||||
Other, net | — | 3 | (2 | ) | |||||||
| | | | | | | | | | | |
Effective tax rate – expense (benefit) | 26 | % | 125 | % | (10 | )% | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income taxes paid were $77 million, $57 million and $43 million in 2013, 2012 and 2011, respectively. | |||||||||||
A reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties, is as follows: | |||||||||||
(In millions) | |||||||||||
Uncertain Tax Positions | Interest and Penalties | Total | |||||||||
Balance at January 1, 2012 | $ | 61 | $ | 20 | $ | 81 | |||||
Current year tax positions: | |||||||||||
Additions | 6 | 6 | |||||||||
Prior year tax positions: | |||||||||||
Reductions | (4 | ) | (4 | ) | |||||||
Settlements with tax authorities | — | — | |||||||||
Lapse of applicable statute of limitations | (12 | ) | (12 | ) | |||||||
Interest and penalties recognized in income tax expense | — | (3 | ) | (3 | ) | ||||||
| | | | | | | | | | | |
Balance at December 31, 2012 | $ | 51 | $ | 17 | $ | 68 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Current year tax positions: | |||||||||||
Additions | $ | 9 | $ | 9 | |||||||
Prior year tax positions: | |||||||||||
Additions | 1 | 1 | |||||||||
Reductions | (2 | ) | (2 | ) | |||||||
Settlements with tax authorities | (1 | ) | (1 | ) | |||||||
Lapse of applicable statute of limitations | (12 | ) | (12 | ) | |||||||
Interest and penalties recognized in income tax expense | $ | (4 | ) | (4 | ) | ||||||
| | | | | | | | | | | |
Balance at December 31, 2013 | $ | 46 | $ | 13 | $ | 59 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
If recognized, $31 million and $34 million of the liability for uncertain tax positions at December 31, 2013 and 2012, respectively, net of any U.S. Federal tax benefit, would impact the Company's effective tax rate. | |||||||||||
At December 31, 2013 and 2012, $65 and $74 million of the total liability for uncertain tax positions, including related interest and penalties, is recorded in deferred income taxes and other, $ – and $1 million is recorded in accrued liabilities and $6 and $7 million is recorded in other assets, respectively. | |||||||||||
The Company files income tax returns in the U.S. Federal jurisdiction, and various local, state and foreign jurisdictions. The Company continues to participate in the Compliance Assurance Program ("CAP"). CAP is a real-time audit of the U.S. Federal income tax return that allows the Internal Revenue Service ("IRS"), working in conjunction with the Company, to determine tax return compliance with the U.S. Federal tax law prior to filing the return. This program provides the Company with greater certainty about its tax liability for a given year within months, rather than years, of filing its annual tax return and greatly reduces the need for recording a liability for U.S. Federal uncertain tax positions. The IRS has completed their examination of the Company's consolidated U.S. Federal tax returns through 2012. With few exceptions, the Company is no longer subject to state or foreign income tax examinations on filed returns for years before 2005. | |||||||||||
As a result of tax audit closings, settlements and the expiration of applicable statutes of limitations in various jurisdictions within the next 12 months, the Company anticipates that it is reasonably possible the liability for uncertain tax positions could be reduced by approximately $1 million. | |||||||||||
EARNINGS_PER_COMMON_SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
EARNINGS PER COMMON SHARE | ' | ||||||||||
EARNINGS PER COMMON SHARE | ' | ||||||||||
T. EARNINGS PER COMMON SHARE | |||||||||||
Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Numerator (basic and diluted): | |||||||||||
Income (loss) from continuing operations | $ | 282 | $ | (53 | ) | $ | (394 | ) | |||
Less: Allocation to unvested restricted stock awards | 6 | 2 | 3 | ||||||||
| | | | | | | | | | | |
Income (loss) from continuing operations attributable to common shareholders | 276 | (55 | ) | (397 | ) | ||||||
| | | | | | | | | | | |
Loss from discontinued operations, net | (10 | ) | (61 | ) | (181 | ) | |||||
Allocation to unvested restricted stock awards | — | — | — | ||||||||
| | | | | | | | | | | |
Loss from discontinued operations attributable to common shareholders | (10 | ) | (61 | ) | (181 | ) | |||||
| | | | | | | | | | | |
Net income (loss) available to common shareholders | $ | 266 | $ | (116 | ) | $ | (578 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Basic common shares (based upon weighted average) | 350 | 349 | 348 | ||||||||
Add: | |||||||||||
Contingent common shares | — | — | — | ||||||||
Stock option dilution | 2 | — | — | ||||||||
| | | | | | | | | | | |
Diluted common shares | 352 | 349 | 348 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The Company follows accounting guidance regarding determining whether instruments granted in share-based payment transactions are participating securities. This accounting guidance clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends prior to vesting should be considered participating securities. The Company has granted restricted stock awards that contain non-forfeitable rights to dividends on unvested shares; such unvested restricted stock awards are considered participating securities. As participating securities, the unvested shares are required to be included in the calculation of the Company's basic earnings per common share, using the "two-class method." The two-class method of computing earnings per common share is an allocation method that calculates earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. For the years ended December 31, 2013, 2012 and 2011, the Company allocated dividends and undistributed earnings (only in 2013) to the unvested restricted stock awards (participating securities). | |||||||||||
Additionally, 12 million common shares, 30 million common shares and 36 million common shares for 2013, 2012 and 2011, respectively, related to stock options were excluded from the computation of diluted earnings per common share due to their antidilutive effect. | |||||||||||
Common shares outstanding included on the Company's balance sheet and for the calculation of earnings per common share do not include unvested stock awards (8 million shares and 8 million common shares at December 31, 2013 and 2012, respectively); shares outstanding for legal requirements included all common shares that have voting rights (including unvested stock awards). | |||||||||||
OTHER_COMMITMENTS_AND_CONTINGE
OTHER COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
OTHER COMMITMENTS AND CONTINGENCIES | ' | |||||||
OTHER COMMITMENTS AND CONTINGENCIES | ' | |||||||
U. OTHER COMMITMENTS AND CONTINGENCIES | ||||||||
Litigation. We are subject to claims, charges, litigation and other proceedings in the ordinary course of our business, including those arising from or related to contractual matters, intellectual property, personal injury, environmental matters, product liability, product recalls, construction defect, insurance coverage, personnel and employment disputes and other matters, including class actions. We believe we have adequate defenses in these matters and that the outcome of these matters is not likely to have a material adverse effect on us. However, there is no assurance that we will prevail in these matters, and we could in the future incur judgments, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations. | ||||||||
Warranty. At the time of sale, the Company accrues a warranty liability for the estimated cost to provide products, parts or services to repair or replace products in satisfaction of warranty obligations. During the third quarter of 2012, a business in the Other Specialty Products segment recorded a $12 million increase in expected future warranty claims resulting from the completion of an analysis prepared by the Company based upon its periodic assessment of recent business unit specific operating trends including, among others, home ownership demographics, sales volumes, manufacturing quality, an analysis of recent warranty claim activity and an estimate of current costs to service anticipated claims. | ||||||||
Changes in the Company's warranty liability were as follows, in millions: | ||||||||
2013 | 2012 | |||||||
Balance at January 1 | $ | 118 | $ | 102 | ||||
Accruals for warranties issued during the year | 42 | 42 | ||||||
Accruals related to pre-existing warranties | 6 | 16 | ||||||
Settlements made (in cash or kind) during the year | (42 | ) | (38 | ) | ||||
Other, net (including currency translation) | — | (4 | ) | |||||
| | | | | | | | |
Balance at December 31 | $ | 124 | $ | 118 | ||||
| | | | | | | | |
| | | | | | | | |
Investments. With respect to the Company's investments in private equity funds, the Company had, at December 31, 2013, commitments to contribute up to $14 million of additional capital to such funds representing the Company's aggregate capital commitment to such funds less capital contributions made to date. The Company is contractually obligated to make additional capital contributions to certain of its private equity funds upon receipt of a capital call from the private equity fund. The Company has no control over when or if the capital calls will occur. Capital calls are funded in cash and generally result in an increase in the carrying value of the Company's investment in the private equity fund when paid. | ||||||||
Other Matters. The Company enters into contracts, which include reasonable and customary indemnifications that are standard for the industries in which it operates. Such indemnifications include customer claims against builders for issues relating to the Company's products and workmanship. In conjunction with divestitures and other transactions, the Company occasionally provides reasonable and customary indemnifications relating to various items including: the enforceability of trademarks; legal and environmental issues; provisions for sales returns; and asset valuations. The Company has never had to pay a material amount related to these indemnifications and evaluates the probability that amounts may be incurred and appropriately records an estimated liability when probable. | ||||||||
INTERIM_FINANCIAL_INFORMATION_
INTERIM FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
INTERIM FINANCIAL INFORMATION (UNAUDITED) | ' | ||||||||||||||||
INTERIM FINANCIAL INFORMATION (UNAUDITED) | ' | ||||||||||||||||
V. INTERIM FINANCIAL INFORMATION (UNAUDITED) | |||||||||||||||||
Quarters Ended | |||||||||||||||||
(In Millions, Except Per Common Share Data) | |||||||||||||||||
Total Year | December 31 | September 30 | June 30 | March 31 | |||||||||||||
2013 | |||||||||||||||||
Net sales | $ | 8,173 | $ | 1,998 | $ | 2,150 | $ | 2,149 | $ | 1,876 | |||||||
Gross profit | $ | 2,255 | $ | 531 | $ | 607 | $ | 609 | $ | 508 | |||||||
Income from continuing operations | $ | 282 | $ | 39 | $ | 105 | $ | 82 | $ | 56 | |||||||
Net income | $ | 272 | $ | 45 | $ | 103 | $ | 77 | $ | 47 | |||||||
Earnings per common share: | |||||||||||||||||
Basic: | |||||||||||||||||
Income from continuing operations | $ | 0.79 | $ | 0.11 | $ | 0.29 | $ | 0.23 | $ | 0.16 | |||||||
Net income | $ | 0.76 | $ | 0.13 | $ | 0.29 | $ | 0.22 | $ | 0.13 | |||||||
Diluted: | |||||||||||||||||
Income from continuing operations | $ | 0.78 | $ | 0.11 | $ | 0.29 | $ | 0.23 | $ | 0.16 | |||||||
Net income | $ | 0.76 | $ | 0.12 | $ | 0.29 | $ | 0.21 | $ | 0.13 | |||||||
2012 | |||||||||||||||||
Net sales | $ | 7,495 | $ | 1,831 | $ | 1,913 | $ | 1,945 | $ | 1,806 | |||||||
Gross profit | $ | 1,956 | $ | 451 | $ | 500 | $ | 521 | $ | 484 | |||||||
(Loss) income from continuing operations | $ | (53 | ) | $ | (70 | ) | $ | 26 | $ | (51 | ) | $ | 42 | ||||
Net (loss) income | $ | (114 | ) | $ | (87 | ) | $ | 15 | $ | (75 | ) | $ | 33 | ||||
(Loss) earnings per common share: | |||||||||||||||||
Basic: | |||||||||||||||||
(Loss) income from continuing operations | $ | (.16 | ) | $ | (.20 | ) | $ | 0.07 | $ | (.15 | ) | $ | 0.12 | ||||
Net (loss) income | $ | (.33 | ) | $ | (.25 | ) | $ | 0.04 | $ | (.22 | ) | $ | 0.09 | ||||
Diluted: | |||||||||||||||||
(Loss) income from continuing operations | $ | (.16 | ) | $ | (.20 | ) | $ | 0.07 | $ | (.15 | ) | $ | 0.12 | ||||
Net (loss) income | $ | (.33 | ) | $ | (.25 | ) | $ | 0.04 | $ | (.22 | ) | $ | 0.09 | ||||
Earnings (loss) per common share amounts for the four quarters of 2013 and 2012 may not total to the earnings per common share amounts for the years ended December 31, 2013 and 2012 due to the allocation of income to unvested stock awards. | |||||||||||||||||
2013 income (loss) from continuing operations and net income (loss) include after-tax gains from financial investments of $2 million, ($3 million pre-tax), $3 million ($5 million pre-tax) and $2 million ($3 million pre-tax) in the first, second and fourth quarters, respectively. | |||||||||||||||||
Fourth quarter 2012 loss from continuing operations and net loss include non-cash impairment charges for other intangible assets of $27 million after tax ($42 million pre-tax). Income (loss) from continuing operations and net (loss) income include after-tax gains from financial investments of $10 million ($16 million pre-tax), $1 million ($2 million pre-tax) and $3 million ($4 million pre-tax) in the first, third and fourth quarters, respectively. Income (loss) from continuing operations and net (loss) income include after-tax charge (income) from litigation settlements of $(1) million ($(2) million pre-tax), $75 million ($75 million pre-tax), $ – – million ($1 million pre-tax) and $2 million ($3 million pre-tax) in the first, second, third and fourth quarters, respectively. | |||||||||||||||||
VALUATION_AND_QUALIFYING_ACCOU
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||||||||
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | ' | ||||||||||||||||||||||
MASCO CORPORATION | |||||||||||||||||||||||
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||||||||
for the years ended December 31, 2013, 2012 and 2011 | |||||||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | |||||||||||||||||||
Additions | |||||||||||||||||||||||
Description | Balance at | Charged to | Charged | Deductions | Balance at | ||||||||||||||||||
Beginning | Costs and | to Other | End of | ||||||||||||||||||||
of Period | Expenses | Accounts | Period | ||||||||||||||||||||
Allowances for doubtful accounts, deducted from accounts receivable in the balance sheet: | |||||||||||||||||||||||
2013 | $ | 31 | $ | 8 | $ | — | $ | (12 | ) | (a | ) | $ | 27 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
2012 | $ | 29 | $ | 13 | $ | — | $ | (11 | ) | (a | ) | $ | 31 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
2011 | $ | 34 | $ | 12 | $ | — | $ | (17 | ) | (a | ) | $ | 29 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Valuation Allowance on deferred tax assets: | |||||||||||||||||||||||
2013 | $ | 787 | $ | (30 | ) | $ | (87 | ) | (b | ) | $ | — | $ | 670 | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
2012 | $ | 688 | $ | 113 | $ | (14 | ) | (b | ) | $ | — | $ | 787 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
2011 | $ | 462 | $ | 178 | $ | 48 | (b | ) | $ | — | $ | 688 | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(a) | |||||||||||||||||||||||
Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years. | |||||||||||||||||||||||
(b) | |||||||||||||||||||||||
Valuation allowance on deferred tax assets recorded primarily in other comprehensive income and paid in capital. | |||||||||||||||||||||||
ACCOUNTING_POLICIES_Policies
ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
ACCOUNTING POLICIES | ' | ||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||
Principles of Consolidation. The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. The Company consolidates the assets, liabilities and results of operations of variable interest entities, for which the Company is the primary beneficiary. | |||||||||||||||||
Use of Estimates and Assumptions in the Preparation of Financial Statements | ' | ||||||||||||||||
Use of Estimates and Assumptions in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition. The Company recognizes revenue as title to products and risk of loss is transferred to customers or when services are rendered, net of applicable provisions for discounts, returns and allowances. The Company records revenue for unbilled services performed based upon material and labor incurred in the Installation and Other Services segment; such amounts are recorded in receivables. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales. | |||||||||||||||||
Customer Promotion Costs | ' | ||||||||||||||||
Customer Promotion Costs. The Company records estimated reductions to revenue for customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. In-store displays that are owned by the Company and used to market the Company's products are included in other assets in the consolidated balance sheets and are amortized using the straight-line method over the expected useful life of three to five years; related amortization expense is classified as a selling expense in the consolidated statements of operations. | |||||||||||||||||
Foreign Currency | ' | ||||||||||||||||
Foreign Currency. The financial statements of the Company's foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. The resulting cumulative translation adjustments have been recorded in the accumulated other comprehensive income component of shareholders' equity. Realized foreign currency transaction gains and losses are included in the consolidated statements of operations in other income (expense), net. | |||||||||||||||||
Cash and Cash Investments | ' | ||||||||||||||||
Cash and Cash Investments. The Company considers all highly liquid investments with an initial maturity of three months or less to be cash and cash investments. | |||||||||||||||||
Short-Term Bank Deposits | ' | ||||||||||||||||
Short-Term Bank Deposits. The Company invests a portion of its foreign excess cash in short-term bank deposits. These highly liquid investments have original maturities between three and twelve months and are valued at cost, which approximates fair value at December 31, 2013 and December 31, 2012. These short-term bank deposits are classified in the current assets section of the Company's consolidated balance sheets, and interest income related to short-term bank deposits is recorded in the Company's consolidated statement of operations in other income (expense), net. | |||||||||||||||||
Receivables | ' | ||||||||||||||||
Receivables. The Company does significant business with a number of customers, including certain home centers and homebuilders. The Company monitors its exposure for credit losses on its customer receivable balances and the credit worthiness of its customers on an on-going basis and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer balances, where a risk of default has been identified, and also include a provision for non-customer specific defaults based upon historical collection, return and write-off activity. During downturns in the Company's markets, declines in the financial condition and creditworthiness of customers impacts the credit risk of the receivables involved and the Company has incurred additional bad debt expense related to customer defaults. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity. Receivables are presented net of certain allowances (including allowances for doubtful accounts) of $57 million and $71 million at December 31, 2013 and 2012, respectively. Receivables include unbilled revenue related to the Installation and Other Services segment of $24 million and $18 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||
Property and Equipment | ' | ||||||||||||||||
Property and Equipment. Property and equipment, including significant betterments to existing facilities, are recorded at cost. Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Maintenance and repair costs are charged against earnings as incurred. | |||||||||||||||||
The Company reviews its property and equipment as an event occurs or circumstances change that would more likely than not reduce the fair value of the property and equipment below the carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the current fair value. Further, the Company evaluates the remaining useful lives of property and equipment at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods. | |||||||||||||||||
Depreciation | ' | ||||||||||||||||
Depreciation. Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 to 10 percent, and machinery and equipment, 5 to 33 percent. Depreciation expense was $175 million, $192 million and $234 million in 2013, 2012 and 2011, respectively. Such depreciation expense included accelerated depreciation of $13 million (primarily in the Cabinets and Related Products and Plumbing Products segments), $28 million (primarily in the Cabinets and Related Products and Plumbing Products segments) and $52 million (primarily in the Cabinets and Related Products and Other Specialty Products segment) in 2013, 2012 and 2011, respectively. | |||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
Goodwill and Other Intangible Assets. The Company performs its annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has defined its reporting units and completed the impairment testing of goodwill at the operating segment level. The Company's operating segments are reporting units that engage in business activities, for which discrete financial information, including five-year forecasts, are available. The Company compares the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. Fair value is determined using a discounted cash flow method, which includes significant unobservable inputs (Level 3 inputs). | |||||||||||||||||
Determining market values using a discounted cash flow method requires the Company to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. The Company's judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. In estimating future cash flows, the Company relies on internally generated five-year forecasts for sales and operating profits, including capital expenditures, and generally a one to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. The Company utilizes its weighted average cost of capital of approximately 10 percent as the basis to determine the discount rate to apply to the estimated future cash flows. Our weighted average cost of capital increased in 2013 due to improving market conditions and an increased stock price. In 2013 and 2012, due to improving market conditions, the Company increased the discount rate to a range of 11.5 percent to 13.5 percent in 2013 for most of its reporting units compared to a range of 11 percent to 13 percent in 2012. The Company records an impairment to goodwill (adjusting the value to the estimated fair value) if the book value exceeds the estimated fair value. | |||||||||||||||||
The Company reviews its other indefinite-lived intangible assets for impairment annually in the fourth quarter of each year, or as events occur or circumstances change that indicate the assets may be impaired without regard to the reporting unit. The Company considers the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term. | |||||||||||||||||
Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. The Company evaluates the remaining useful lives of amortizable intangible assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining periods of amortization. See Note H for additional information regarding Goodwill and Other Intangible Assets. | |||||||||||||||||
Fair Value Accounting | ' | ||||||||||||||||
Fair Value Accounting. The Company follows accounting guidance for its financial investments and liabilities which defines fair value, establishes a framework for measuring fair value and prescribes disclosures about fair value measurements. The Company also follows this guidance for its non-financial investments and liabilities. | |||||||||||||||||
The fair value of financial investments and liabilities is determined at each balance sheet date and future declines in market conditions, the future performance of the underlying investments or new information could affect the recorded values of the Company's investments in marketable securities, private equity funds and other private investments. | |||||||||||||||||
The Company uses derivative financial instruments to manage certain exposure to fluctuations in earnings and cash flows resulting from changes in foreign currency exchange rates, commodity costs and interest rate exposures. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at fair value, netted by counterparty, where the right of offset exists. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in determining current earnings during the period of the change in fair value. | |||||||||||||||||
Warranty | ' | ||||||||||||||||
Warranty. At the time of sale, the Company accrues a warranty liability for the estimated cost to provide products, parts or services to repair or replace products in satisfaction of warranty obligations. The Company's estimate of costs to service its warranty obligations is based upon the information available and includes a number of factors such as the warranty coverage, the warranty period, historical experience specific to the nature, frequency and average cost to service the claim, along with product manufacturing metrics and industry and demographic trends. | |||||||||||||||||
Certain factors and related assumptions in determining our warranty liability involve judgments and estimates and are sensitive to changes in the aforementioned factors. The Company believes that the warranty accrual is appropriate; however, actual claims incurred could differ from the original estimates thereby requiring adjustments to previously established accruals. | |||||||||||||||||
A majority of the Company's business is at the consumer retail level through home centers and major retailers. A consumer may return a product to a retail outlet that is a warranty return. However, certain retail outlets do not distinguish between warranty and other types of returns when they claim a return deduction from the Company. The Company's revenue recognition policy takes into account this type of return when recognizing revenue, and deductions are recorded at the time of sale. | |||||||||||||||||
Product Liability | ' | ||||||||||||||||
Product Liability. The Company provides for expenses associated with product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability. | |||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
Stock-Based Compensation. The Company measures compensation expense for stock awards at the market price of the Company's common stock at the grant date. Such expense is recognized ratably over the shorter of the vesting period of the stock awards, typically 5 to 10 years, or the length of time until the grantee becomes retirement-eligible at age 65. | |||||||||||||||||
The Company measures compensation expense for stock options using a Black-Scholes option pricing model. Such expense is recognized ratably over the shorter of the vesting period of the stock options, typically five years, or the length of time until the grantee becomes retirement-eligible at age 65. The Company utilizes the shortcut method to determine the tax windfall pool associated with stock options. | |||||||||||||||||
Noncontrolling Interest | ' | ||||||||||||||||
Noncontrolling Interest. The Company owns 68 percent of Hansgrohe SE at both December 31, 2013 and 2012. The aggregate noncontrolling interest, net of dividends, at December 31, 2013 and 2012 has been recorded as a component of equity on the Company's consolidated balance sheets. | |||||||||||||||||
Interest and Penalties on Uncertain Tax Positions | ' | ||||||||||||||||
Interest and Penalties on Uncertain Tax Positions. The Company records interest and penalties on its uncertain tax positions in income tax expense. | |||||||||||||||||
Reclassifications | ' | ||||||||||||||||
Reclassifications. Certain prior-year amounts have been reclassified to conform to the 2013 presentation in the consolidated financial statements. In the Company's consolidated statements of cash flows, the cash flows from discontinued operations are not separately classified. | |||||||||||||||||
Revision of Previously Issued Financial Statements | ' | ||||||||||||||||
Revision of Previously Issued Financial Statements. During the third quarter ended September 30, 2013, the Company identified an error related to the classification of cash and cash investments. Foreign short-term bank deposits with terms ranging from three months to twelve months were incorrectly classified as cash and cash investments rather than short-term bank deposits. Historic periods are revised, as detailed below, in our future filings. These classification errors were not considered material to any prior period financial statements. | |||||||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated balance sheets (in millions). | |||||||||||||||||
Balance Sheet December 31, 2012 | As Reported | As Revised | |||||||||||||||
Cash and cash investments | $ | 1,351 | $ | 1,040 | |||||||||||||
Short-term bank deposits | — | 311 | |||||||||||||||
Total current assets | $ | 3,217 | $ | 3,217 | |||||||||||||
Balance Sheet December 31, 2011 | As Reported | As Revised | |||||||||||||||
Cash and cash investments | $ | 1,656 | $ | 1,353 | |||||||||||||
Short-term bank deposits | — | 303 | |||||||||||||||
Total current assets | $ | 3,429 | $ | 3,429 | |||||||||||||
This revision had no effect on our consolidated results of operations. | |||||||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated statement of cash flows (in millions). | |||||||||||||||||
Cash Flows December 31, 2012 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (27 | ) | $ | (29 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | 17 | $ | 11 | |||||||||||||
Decrease in cash and cash investments | $ | (305 | ) | $ | (313 | ) | |||||||||||
Cash Flows December 31, 2011 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (61 | ) | $ | (84 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | (18 | ) | $ | (8 | ) | |||||||||||
Decrease in cash and cash investments | $ | (59 | ) | $ | (72 | ) | |||||||||||
Cash Flows December 31, 2010 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (109 | ) | $ | (244 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | (14 | ) | $ | (7 | ) | |||||||||||
Increase in cash and cash investments | $ | 302 | $ | 174 | |||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated balance sheets and statements of cash flows (all cash flow figures are year-to-date, in millions). | |||||||||||||||||
Mar. 31, | June 30, | Sep. 30, | Mar. 31, | June 30, | |||||||||||||
2012 | 2012 | 2012 | 2013 | 2013 | |||||||||||||
Cash and cash investments | |||||||||||||||||
As reported | $ | 1,788 | $ | 1,853 | $ | 1,166 | $ | 1,032 | $ | 1,223 | |||||||
As revised | $ | 1,491 | $ | 1,612 | $ | 889 | $ | 828 | $ | 1,028 | |||||||
Short-term bank deposits | |||||||||||||||||
As reported | — | — | — | — | — | ||||||||||||
As revised | $ | 297 | $ | 241 | $ | 277 | $ | 204 | $ | 195 | |||||||
Net cash (for) from investing activities | |||||||||||||||||
As reported | $ | (2 | ) | $ | (15 | ) | $ | (42 | ) | $ | (30 | ) | $ | (51 | ) | ||
As revised | $ | 10 | $ | 37 | $ | (17 | ) | $ | 70 | $ | 62 | ||||||
The revisions did not significantly impact the effect of exchange rate changes on cash and cash investments in each quarter above. These changes will be reflected in the revised statements of cash flows, in future filings. | |||||||||||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||||||||||
Recently Issued Accounting Pronouncements. On January 1, 2013, the Company adopted new accounting guidance requiring disclosure of amounts reclassified from accumulated other comprehensive income. The adoption of this new guidance did not have an impact on the Company's financial position or its results of operations. |
INVENTORIES_POLICIES_Policies
INVENTORIES POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
INVENTORIES | ' |
Inventories | ' |
Inventories, which include purchased parts, materials, direct labor and applied manufacturing overhead, are stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method |
ACCOUNTING_POLICIES_Tables
ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
ACCOUNTING POLICIES | ' | ||||||||||||||||
Schedule of impact of the revisions on the Company's previously issued financial statements | ' | ||||||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated balance sheets (in millions). | |||||||||||||||||
Balance Sheet December 31, 2012 | As Reported | As Revised | |||||||||||||||
Cash and cash investments | $ | 1,351 | $ | 1,040 | |||||||||||||
Short-term bank deposits | — | 311 | |||||||||||||||
Total current assets | $ | 3,217 | $ | 3,217 | |||||||||||||
Balance Sheet December 31, 2011 | As Reported | As Revised | |||||||||||||||
Cash and cash investments | $ | 1,656 | $ | 1,353 | |||||||||||||
Short-term bank deposits | — | 303 | |||||||||||||||
Total current assets | $ | 3,429 | $ | 3,429 | |||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated statement of cash flows (in millions). | |||||||||||||||||
Cash Flows December 31, 2012 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (27 | ) | $ | (29 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | 17 | $ | 11 | |||||||||||||
Decrease in cash and cash investments | $ | (305 | ) | $ | (313 | ) | |||||||||||
Cash Flows December 31, 2011 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (61 | ) | $ | (84 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | (18 | ) | $ | (8 | ) | |||||||||||
Decrease in cash and cash investments | $ | (59 | ) | $ | (72 | ) | |||||||||||
Cash Flows December 31, 2010 | As Reported | As Revised | |||||||||||||||
Net cash (for) investing activities | $ | (109 | ) | $ | (244 | ) | |||||||||||
Effect of exchange rate changes on cash and cash investments | $ | (14 | ) | $ | (7 | ) | |||||||||||
Increase in cash and cash investments | $ | 302 | $ | 174 | |||||||||||||
The following table presents the impact of the revisions on the Company's previously issued consolidated balance sheets and statements of cash flows (all cash flow figures are year-to-date, in millions). | |||||||||||||||||
Mar. 31, | June 30, | Sep. 30, | Mar. 31, | June 30, | |||||||||||||
2012 | 2012 | 2012 | 2013 | 2013 | |||||||||||||
Cash and cash investments | |||||||||||||||||
As reported | $ | 1,788 | $ | 1,853 | $ | 1,166 | $ | 1,032 | $ | 1,223 | |||||||
As revised | $ | 1,491 | $ | 1,612 | $ | 889 | $ | 828 | $ | 1,028 | |||||||
Short-term bank deposits | |||||||||||||||||
As reported | — | — | — | — | — | ||||||||||||
As revised | $ | 297 | $ | 241 | $ | 277 | $ | 204 | $ | 195 | |||||||
Net cash (for) from investing activities | |||||||||||||||||
As reported | $ | (2 | ) | $ | (15 | ) | $ | (42 | ) | $ | (30 | ) | $ | (51 | ) | ||
As revised | $ | 10 | $ | 37 | $ | (17 | ) | $ | 70 | $ | 62 | ||||||
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
DISCONTINUED OPERATIONS | ' | ||||||||||
Schedule of selected financial information for the discontinued operations | ' | ||||||||||
Selected financial information for the discontinued operations during the period owned by the Company, were as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Net sales | $ | 265 | $ | 321 | $ | 389 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Operating loss from discontinued operations | $ | (7 | ) | $ | (44 | ) | $ | (58 | ) | ||
Impairment of assets held for sale | (10 | ) | (3 | ) | (130 | ) | |||||
Gain (loss) on disposal of discontinued operations, net | 3 | (6 | ) | (3 | ) | ||||||
| | | | | | | | | | | |
Loss before income tax | (14 | ) | (53 | ) | (191 | ) | |||||
Income tax (benefit) expense | (4 | ) | 8 | (10 | ) | ||||||
| | | | | | | | | | | |
Loss from discontinued operations, net | $ | (10 | ) | $ | (61 | ) | $ | (181 | ) | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of balance sheet items classified as held for sale | ' | ||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Receivables | $ | — | $ | 32 | |||||||
Inventories | — | 66 | |||||||||
Prepaid expenses and other | — | 2 | |||||||||
Property and equipment, net | — | 103 | |||||||||
| | | | | | | | ||||
Total assets | $ | — | $ | 203 | |||||||
Accounts payable | — | 31 | |||||||||
Accrued liabilities | — | 14 | |||||||||
Deferred income taxes | — | 4 | |||||||||
| | | | | | | | ||||
Total liabilities | $ | — | $ | 49 |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INVENTORIES | ' | |||||||
Schedule of inventories | ' | |||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Finished goods | $ | 398 | $ | 369 | ||||
Raw material | 268 | 261 | ||||||
Work in process | 99 | 96 | ||||||
| | | | | | | | |
Total | $ | 765 | $ | 726 | ||||
| | | | | | | | |
| | | | | | | | |
FAIR_VALUE_OF_FINANCIAL_INVEST1
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES | ' | ||||||||||
Schedule of financial investments included in other assets | ' | ||||||||||
Financial investments included in other assets were as follows, in millions: | |||||||||||
At December 31 | |||||||||||
2013 | 2012 | ||||||||||
Auction rate securities | $ | 22 | $ | 22 | |||||||
| | | | | | | | ||||
Total recurring investments | 22 | 22 | |||||||||
Private equity funds | 63 | 69 | |||||||||
Other investments | 3 | 4 | |||||||||
| | | | | | | | ||||
Total non-recurring investments | 66 | 73 | |||||||||
Total | $ | 88 | $ | 95 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of income from financial investments, net, included in other, net, within other income (expense), net, and impairment charges for financial investments | ' | ||||||||||
Income from financial investments, net, included in other, net, within other income (expense), net, and impairment charges for financial investments were as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Realized gains from marketable securities | $ | — | $ | — | $ | 41 | |||||
Realized gains from private equity funds | 11 | 24 | 32 | ||||||||
Impairment of private equity funds | — | (2 | ) | — | |||||||
| | | | | | | | | | | |
Income from financial investments, net | $ | 11 | $ | 22 | $ | 73 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | ||||||||||
Schedule of pre-tax gains (losses) included in the Company's consolidated statements of operations | ' | ||||||||||
The pre-tax gains (losses) included in the Company's consolidated statements of operations are as follows, in millions: | |||||||||||
Twelve Months Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Foreign Currency Contracts | |||||||||||
Exchange Contracts | $ | 2 | $ | (2 | ) | $ | 3 | ||||
Forward Contracts | 1 | — | 3 | ||||||||
Metals Contracts | (7 | ) | 2 | (7 | ) | ||||||
| | | | | | | | | | | |
Total gains (losses) | $ | (4 | ) | $ | — | $ | (1 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of notional amounts being hedged and the fair value of derivative instruments, on a gross basis | ' | ||||||||||
The notional amounts being hedged and the fair value of those derivative instruments, on a gross basis, is as follows, in millions: | |||||||||||
At December 31, 2013 | |||||||||||
Notional | Assets | Liabilities | |||||||||
Amount | |||||||||||
Foreign Currency Contracts | |||||||||||
Exchange Contracts | $ | 53 | |||||||||
Current liabilities | $ | — | $ | 2 | |||||||
Forward Contracts | 88 | ||||||||||
Current liabilities | — | 1 | |||||||||
Metals Contracts | 48 | ||||||||||
Current liabilities | — | 2 | |||||||||
| | | | | | | | | | | |
Total | $ | — | $ | 5 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
At December 31, 2012 | |||||||||||
Notional | Assets | Liabilities | |||||||||
Amount | |||||||||||
Foreign Currency Contracts | |||||||||||
Exchange Contracts | $ | 172 | |||||||||
Current liabilities | $ | — | $ | 5 | |||||||
Forward Contracts | 76 | ||||||||||
Current assets | 1 | 1 | |||||||||
Metals Contracts | 35 | ||||||||||
Current liabilities | 1 | 2 | |||||||||
| | | | | | | | | | | |
Total | $ | 2 | $ | 8 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PROPERTY AND EQUIPMENT | ' | |||||||
Schedule of property and equipment | ' | |||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Land and improvements | $ | 135 | $ | 140 | ||||
Buildings | 809 | 819 | ||||||
Machinery and equipment | 2,046 | 2,054 | ||||||
| | | | | | | | |
2,990 | 3,013 | |||||||
Less: Accumulated depreciation | 1,738 | 1,687 | ||||||
| | | | | | | | |
Total | $ | 1,252 | $ | 1,326 | ||||
| | | | | | | | |
| | | | | | | | |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ||||||||||||||||||||||
Schedule of changes in carrying amount of goodwill by segment | ' | ||||||||||||||||||||||
The changes in the carrying amount of goodwill for 2013 and 2012, by segment, were as follows, in millions: | |||||||||||||||||||||||
Gross Goodwill | Accumulated | Net Goodwill | |||||||||||||||||||||
At December 31, | Impairment | At December 31, | |||||||||||||||||||||
2013 | Losses | 2013 | |||||||||||||||||||||
Cabinets and Related Products | $ | 240 | $ | (59 | ) | $ | 181 | ||||||||||||||||
Plumbing Products | 550 | (340 | ) | 210 | |||||||||||||||||||
Installation and Other Services | 1,806 | (762 | ) | 1,044 | |||||||||||||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | |||||||||||||||||||
Other Specialty Products | 983 | (734 | ) | 249 | |||||||||||||||||||
| | | | | | | | | | | |||||||||||||
Total | $ | 3,873 | $ | (1,970 | ) | $ | 1,903 | ||||||||||||||||
| | | | | | | | | | | |||||||||||||
| | | | | | | | | | | |||||||||||||
Gross Goodwill | Accumulated | Net Goodwill | Pre-tax | Additions (A) | Other (B) | Net Goodwill | |||||||||||||||||
At December 31, | Impairment | At December 31, | Impairment | At December 31, | |||||||||||||||||||
2012 | Losses | 2012 | Charge | 2013 | |||||||||||||||||||
Cabinets and Related Products | $ | 240 | $ | (59 | ) | $ | 181 | $ | — | $ | — | $ | — | $ | 181 | ||||||||
Plumbing Products | 544 | (340 | ) | 204 | — | — | 6 | 210 | |||||||||||||||
Installation and Other Services | 1,806 | (762 | ) | 1,044 | — | — | — | 1,044 | |||||||||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | — | — | 219 | |||||||||||||||
Other Specialty Products | 980 | (734 | ) | 246 | — | 3 | — | 249 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,864 | $ | (1,970 | ) | $ | 1,894 | $ | — | $ | 3 | $ | 6 | $ | 1,903 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Gross Goodwill | Accumulated | Net Goodwill | Pre-tax | Additions (A) | Other (B) | Net Goodwill | |||||||||||||||||
At December 31, | Impairment | At December 31, | Impairment | At December 31, | |||||||||||||||||||
2011 | Losses | 2011 | Charge | 2012 | |||||||||||||||||||
Cabinets and Related Products | $ | 240 | $ | (59 | ) | $ | 181 | $ | — | $ | — | $ | — | $ | 181 | ||||||||
Plumbing Products | 541 | (340 | ) | 201 | — | — | 3 | 204 | |||||||||||||||
Installation and Other Services | 1,806 | (762 | ) | 1,044 | — | — | — | 1,044 | |||||||||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | — | — | 219 | |||||||||||||||
Other Specialty Products | 980 | (734 | ) | 246 | — | — | — | 246 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,861 | $ | (1,970 | ) | $ | 1,891 | $ | — | $ | — | $ | 3 | $ | 1,894 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(A) | |||||||||||||||||||||||
Additions include acquisitions. | |||||||||||||||||||||||
(B) | |||||||||||||||||||||||
Other principally includes the effect of foreign currency translation. | |||||||||||||||||||||||
OTHER_ASSETS_Tables
OTHER ASSETS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
OTHER ASSETS | ' | |||||||
Schedule of other assets | ' | |||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Financial investments (Note E) | $ | 88 | $ | 95 | ||||
In-store displays, net | 21 | 35 | ||||||
Debenture expense | 24 | 25 | ||||||
Notes receivable | 2 | 2 | ||||||
Other | 26 | 27 | ||||||
| | | | | | | | |
Total | $ | 161 | $ | 184 | ||||
| | | | | | | | |
| | | | | | | | |
ACCRUED_LIABILITIES_Tables
ACCRUED LIABILITIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCRUED LIABILITIES | ' | |||||||
Schedule of Accrued Liabilities | ' | |||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Salaries, wages and commissions | $ | 210 | $ | 189 | ||||
Insurance | 166 | 170 | ||||||
Warranty (Note U) | 124 | 118 | ||||||
Advertising and sales promotion | 111 | 93 | ||||||
Interest | 58 | 63 | ||||||
Employee retirement plans | 48 | 40 | ||||||
Income taxes payable | 32 | 27 | ||||||
Property, payroll and other taxes | 28 | 24 | ||||||
Dividends payable | 27 | 27 | ||||||
Derivative instruments (Note F) | 5 | 6 | ||||||
Plant closures | 6 | 5 | ||||||
Litigation | 4 | 7 | ||||||
Other | 55 | 54 | ||||||
| | | | | | | | |
Total | $ | 874 | $ | 823 | ||||
| | | | | | | | |
| | | | | | | | |
DEBT_Tables
DEBT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
DEBT | ' | |||||||
Schedule of long-term debt | ' | |||||||
(In Millions) | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Notes and debentures: | ||||||||
7.125%, due Aug. 15, 2013 | $ | — | $ | 200 | ||||
4.8%, due June 15, 2015 | 500 | 500 | ||||||
6.125%, due Oct. 3, 2016 | 1,000 | 1,000 | ||||||
5.85%, due Mar. 15, 2017 | 300 | 300 | ||||||
6.625%, due Apr. 15, 2018 | 114 | 114 | ||||||
7.125%, due Mar. 15, 2020 | 500 | 500 | ||||||
5.95%, due March 15, 2022 | 400 | 400 | ||||||
7.75%, due Aug. 1, 2029 | 296 | 296 | ||||||
6.5%, due Aug. 15, 2032 | 300 | 300 | ||||||
Other | 17 | 18 | ||||||
| | | | | | | | |
3,427 | 3,628 | |||||||
Less: Current portion | 6 | 206 | ||||||
| | | | | | | | |
Total long-term debt | $ | 3,421 | $ | 3,422 | ||||
| | | | | | | | |
| | | | | | | | |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||||||
Schedule of pre-tax compensation expense and the related income tax benefit for these stock-based incentives | ' | ||||||||||||||||
Pre-tax compensation expense and the related income tax benefit for these stock-based incentives were as follows, in millions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Long-term stock awards | $ | 34 | $ | 35 | $ | 39 | |||||||||||
Stock options | 13 | 15 | 21 | ||||||||||||||
Phantom stock awards and stock appreciation rights | 7 | 11 | 1 | ||||||||||||||
| | | | | | | | | | | |||||||
Total | $ | 54 | $ | 61 | $ | 61 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Income tax benefit (37 percent tax rate – before valuation allowance) | $ | 20 | $ | 23 | $ | 23 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Schedule of the Company's long-term stock award activity | ' | ||||||||||||||||
The Company's long-term stock award activity was as follows, shares in millions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Unvested stock award shares at January 1 | 8 | 10 | 10 | ||||||||||||||
Weighted average grant date fair value | $ | 16 | $ | 17 | $ | 19 | |||||||||||
Stock award shares granted | 2 | 1 | 2 | ||||||||||||||
Weighted average grant date fair value | $ | 20 | $ | 12 | $ | 13 | |||||||||||
Stock award shares vested | 2 | 2 | 2 | ||||||||||||||
Weighted average grant date fair value | $ | 17 | $ | 18 | $ | 20 | |||||||||||
Stock award shares forfeited | — | 1 | — | ||||||||||||||
Weighted average grant date fair value | $ | 16 | $ | 17 | $ | 18 | |||||||||||
Unvested stock award shares at December 31 | 8 | 8 | 10 | ||||||||||||||
Weighted average grant date fair value | $ | 17 | $ | 16 | $ | 17 | |||||||||||
Schedule of the Company's stock option activity | ' | ||||||||||||||||
The Company's stock option activity was as follows, shares in millions: | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Option shares outstanding, January 1 | 30 | 36 | 37 | ||||||||||||||
Weighted average exercise price | $ | 21 | $ | 21 | $ | 21 | |||||||||||
Option shares granted | 1 | 1 | 2 | ||||||||||||||
Weighted average exercise price | $ | 20 | $ | 12 | $ | 13 | |||||||||||
Option shares exercised | 3 | 1 | — | ||||||||||||||
Aggregate intrinsic value on date of exercise (A) | $ | 23 million | $ | 5 million | $ | 1 million | |||||||||||
Weighted average exercise price | $ | 12 | $ | 10 | $ | 8 | |||||||||||
Option shares forfeited | 4 | 6 | 3 | ||||||||||||||
Weighted average exercise price | $ | 26 | $ | 19 | $ | 22 | |||||||||||
Option shares outstanding, December 31 | 24 | 30 | 36 | ||||||||||||||
Weighted average exercise price | $ | 22 | $ | 21 | $ | 21 | |||||||||||
Weighted average remaining option term (in years) | 4 | 5 | 5 | ||||||||||||||
Option shares vested and expected to vest, December 31 | 24 | 30 | 36 | ||||||||||||||
Weighted average exercise price | $ | 22 | $ | 21 | $ | 21 | |||||||||||
Aggregate intrinsic value (A) | $ | 109 million | $ | 55 million | $ | 12 million | |||||||||||
Weighted average remaining option term (in years) | 4 | 5 | 5 | ||||||||||||||
Option shares exercisable (vested), December 31 | 20 | 23 | 24 | ||||||||||||||
Weighted average exercise price | $ | 24 | $ | 24 | $ | 25 | |||||||||||
Aggregate intrinsic value (A) | $ | 62 million | $ | 22 million | $ | 4 million | |||||||||||
Weighted average remaining option term (in years) | 3 | 4 | 4 | ||||||||||||||
(A) | |||||||||||||||||
Aggregate intrinsic value is calculated using the Company's stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares. | |||||||||||||||||
Schedule of weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model | ' | ||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Weighted average grant date fair value | $ | 8.35 | $ | 4.44 | $ | 5.07 | |||||||||||
Risk-free interest rate | 1.22 | % | 1.09 | % | 2.69 | % | |||||||||||
Dividend yield | 1.47 | % | 2.57 | % | 2.35 | % | |||||||||||
Volatility factor | 49.07 | % | 50.97 | % | 49.03 | % | |||||||||||
Expected option life | 6 years | 6 years | 6 years | ||||||||||||||
Summary of stock option shares outstanding and exercisable | ' | ||||||||||||||||
The following table summarizes information for stock option shares outstanding and exercisable at December 31, 2013, shares in millions: | |||||||||||||||||
Option Shares Outstanding | Option Shares Exercisable | ||||||||||||||||
Range of | Number of | Weighted | Weighted | Number of | Weighted | ||||||||||||
Prices | Shares | Average | Average | Shares | Average | ||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||
Option | Price | Price | |||||||||||||||
Term | |||||||||||||||||
$ | 21-Aug | 13 | 6 Years | $ | 14 | 8 | $ | 15 | |||||||||
$ | 26 - 28 | 3 | 2 Years | $ | 27 | 3 | $ | 27 | |||||||||
$ | 29 - 31 | 8 | 2 Years | $ | 30 | 9 | $ | 30 | |||||||||
$ | 33 - 36 | — | 2 Years | $ | 34 | — | $ | 34 | |||||||||
| | | | | | | | | | | | | | | | | |
$ | Aug-36 | 24 | 4 Years | $ | 22 | 20 | $ | 24 | |||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Schedule of phantom stock awards and SARs | ' | ||||||||||||||||
Information related to phantom stock awards and SARs was as follows, in millions: | |||||||||||||||||
Phantom | Stock | ||||||||||||||||
Stock | Appreciation | ||||||||||||||||
Awards | Rights | ||||||||||||||||
At December 31, | At December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Accrued compensation cost liability | $ | 14 | $ | 11 | $ | 8 | $ | 6 | |||||||||
Unrecognized compensation cost | $ | 4 | $ | 5 | $ | — | $ | 1 | |||||||||
Equivalent common shares | 1 | 1 | 2 | 2 |
EMPLOYEE_RETIREMENT_PLANS_Tabl
EMPLOYEE RETIREMENT PLANS (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
EMPLOYEE RETIREMENT PLANS | ' | |||||||||||||||||||
Schedule of changes in the projected benefit obligation and fair value of the plan assets, and the funded status of the Company's defined-benefit pension plans | ' | |||||||||||||||||||
Changes in the projected benefit obligation and fair value of plan assets, and the funded status of the Company's defined-benefit pension plans were as follows, in millions: | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Changes in projected benefit obligation: | ||||||||||||||||||||
Projected benefit obligation at January 1 | $ | 1,056 | $ | 181 | $ | 943 | $ | 174 | ||||||||||||
Service cost | 3 | — | 2 | — | ||||||||||||||||
Interest cost | 40 | 6 | 42 | 7 | ||||||||||||||||
Actuarial (gain) loss, net | (81 | ) | (13 | ) | 100 | 11 | ||||||||||||||
Foreign currency exchange | 7 | — | 9 | — | ||||||||||||||||
Benefit payments | (42 | ) | (11 | ) | (40 | ) | (11 | ) | ||||||||||||
| | | | | | | | | | | | | | |||||||
Projected benefit obligation at December 31 | $ | 983 | $ | 163 | $ | 1,056 | $ | 181 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Changes in fair value of plan assets: | ||||||||||||||||||||
Fair value of plan assets at January 1 | $ | 594 | $ | — | $ | 504 | $ | — | ||||||||||||
Actual return on plan assets | 65 | — | 75 | — | ||||||||||||||||
Foreign currency exchange | 2 | — | 4 | — | ||||||||||||||||
Company contributions | 44 | 11 | 55 | 11 | ||||||||||||||||
Expenses, other | (4 | ) | — | (4 | ) | — | ||||||||||||||
Benefit payments | (42 | ) | (11 | ) | (40 | ) | (11 | ) | ||||||||||||
| | | | | | | | | | | | | | |||||||
Fair value of plan assets at December 31 | $ | 659 | $ | — | $ | 594 | $ | — | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Funded status at December 31: | $ | (324 | ) | $ | (163 | ) | $ | (462 | ) | $ | (181 | ) | ||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of amounts in the Company's consolidated balance sheets | ' | |||||||||||||||||||
Amounts in the Company's consolidated balance sheets were as follows, in millions: | ||||||||||||||||||||
At December 31, 2013 | At December 31, 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Accrued liabilities | $ | (3 | ) | $ | (12 | ) | $ | (3 | ) | $ | (12 | ) | ||||||||
Deferred income taxes and other | (321 | ) | (151 | ) | (459 | ) | (169 | ) | ||||||||||||
| | | | | | | | | | | | | | |||||||
Total net liability | $ | (324 | ) | $ | (163 | ) | $ | (462 | ) | $ | (181 | ) | ||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of unrealized loss included in accumulated other comprehensive income before income taxes | ' | |||||||||||||||||||
Unrealized loss included in accumulated other comprehensive income before income taxes were as follows, in millions: | ||||||||||||||||||||
At December 31, 2013 | At December 31, 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Net loss | $ | 344 | $ | 38 | $ | 467 | $ | 53 | ||||||||||||
Net transition obligation | 1 | — | 1 | — | ||||||||||||||||
Net prior service cost | 2 | — | 2 | — | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 347 | $ | 38 | $ | 470 | $ | 53 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ' | |||||||||||||||||||
Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions: | ||||||||||||||||||||
At December 31 | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||||
Projected benefit obligation | $ | 983 | $ | 163 | $ | 1,056 | $ | 181 | ||||||||||||
Accumulated benefit obligation | $ | 982 | $ | 163 | $ | 1,054 | $ | 181 | ||||||||||||
Fair value of plan assets | $ | 659 | $ | — | $ | 594 | $ | — | ||||||||||||
Schedule of net periodic pension cost for the Company's defined-benefit pension plans | ' | |||||||||||||||||||
Net periodic pension cost for the Company's defined-benefit pension plans was as follows, in millions: | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | Qualified | Non-Qualified | |||||||||||||||
Service cost | $ | 3 | $ | — | $ | 2 | $ | — | $ | 2 | $ | — | ||||||||
Interest cost | 44 | 6 | 46 | 7 | 47 | 8 | ||||||||||||||
Expected return on plan assets | (40 | ) | — | (35 | ) | — | (36 | ) | — | |||||||||||
Recognized prior service cost | — | — | — | — | — | — | ||||||||||||||
Recognized net loss | 16 | 2 | 14 | 2 | 10 | 1 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Net periodic pension cost | $ | 23 | $ | 8 | $ | 27 | $ | 9 | $ | 23 | $ | 9 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of the Company's qualified defined-benefit pension plan weighted average asset allocation | ' | |||||||||||||||||||
At December 31 | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Equity securities | 47 | % | 44 | % | ||||||||||||||||
Debt securities | 35 | % | 41 | % | ||||||||||||||||
Other | 18 | % | 15 | % | ||||||||||||||||
| | | | | | | | |||||||||||||
Total | 100 | % | 100 | % | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Schedule of qualified defined-benefit pension plan assets at fair value | ' | |||||||||||||||||||
The following table sets forth by level, within the fair value hierarchy, the qualified defined-benefit pension plan assets at fair value as of December 31, 2013 and 2012, in millions. | ||||||||||||||||||||
Assets at Fair Value as of | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Common and Preferred Stocks: | ||||||||||||||||||||
United States | $ | 143 | $ | 107 | $ | — | $ | 250 | ||||||||||||
International | 46 | 16 | — | 62 | ||||||||||||||||
Private Equity and Hedge Funds | ||||||||||||||||||||
United States | — | — | 52 | 52 | ||||||||||||||||
International | — | — | 24 | 24 | ||||||||||||||||
Corporate Debt Securities: | ||||||||||||||||||||
United States | 15 | 25 | — | 40 | ||||||||||||||||
International | — | 61 | — | 61 | ||||||||||||||||
Government and Other Debt Securities: | ||||||||||||||||||||
United States | 79 | 1 | — | 80 | ||||||||||||||||
International | 23 | 27 | — | 50 | ||||||||||||||||
Common Collective Trust Fund – United States | — | 3 | — | 3 | ||||||||||||||||
Short-Term and Other Investments | ||||||||||||||||||||
United States | 2 | 2 | — | 4 | ||||||||||||||||
International | 10 | 6 | 17 | 33 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total Assets at Fair Value | $ | 318 | $ | 248 | $ | 93 | $ | 659 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Assets at Fair Value as of | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Common and Preferred Stocks: | ||||||||||||||||||||
United States | $ | 127 | $ | 61 | $ | — | $ | 188 | ||||||||||||
International | 61 | 10 | — | 71 | ||||||||||||||||
Private Equity and Hedge Funds | ||||||||||||||||||||
United States | — | — | 52 | 52 | ||||||||||||||||
International | — | — | 11 | 11 | ||||||||||||||||
Corporate Debt Securities: | ||||||||||||||||||||
United States | — | 25 | — | 25 | ||||||||||||||||
International | — | 73 | — | 73 | ||||||||||||||||
Government and Other Debt Securities: | ||||||||||||||||||||
United States | 51 | 42 | — | 93 | ||||||||||||||||
International | 24 | 29 | — | 53 | ||||||||||||||||
Common Collective Trust Fund – United States | — | 12 | — | 12 | ||||||||||||||||
Short-Term and Other Investments | ||||||||||||||||||||
United States | 1 | — | — | 1 | ||||||||||||||||
International | — | — | 15 | 15 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total Assets at Fair Value | $ | 264 | $ | 252 | $ | 78 | $ | 594 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of changes in the fair value of the qualified defined-benefit pension plan level 3 assets | ' | |||||||||||||||||||
Changes in the fair value of the qualified defined-benefit pension plan level 3 assets, were as follows, in millions: | ||||||||||||||||||||
Year Ended | Year Ended | |||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||
Fair Value, January 1 | $ | 78 | $ | 72 | ||||||||||||||||
Purchases | 25 | 9 | ||||||||||||||||||
Sales | (14 | ) | (8 | ) | ||||||||||||||||
Transfers from Level 2 to Level 3 | — | — | ||||||||||||||||||
Unrealized gains (losses) | 4 | 5 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Fair Value, December 31 | $ | 93 | $ | 78 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Schedule of major assumptions used in accounting for the Company's defined-benefit pension plans | ' | |||||||||||||||||||
December 31 | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Discount rate for obligations | 4.4 | % | 3.8 | % | 4.4 | % | ||||||||||||||
Expected return on plan assets | 7.25 | % | 7.25 | % | 7.25 | % | ||||||||||||||
Rate of compensation increase | — | % | — | % | — | % | ||||||||||||||
Discount rate for net periodic pension cost | 3.8 | % | 4.4 | % | 5.3 | % | ||||||||||||||
Schedule of benefits expected to be paid relating to the Company's defined-benefit pension plans | ' | |||||||||||||||||||
At December 31, 2013, the benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter, relating to the Company's defined-benefit pension plans, were as follows, in millions: | ||||||||||||||||||||
Qualified | Non-Qualified | |||||||||||||||||||
Plans | Plans | |||||||||||||||||||
2014 | $ | 45 | $ | 12 | ||||||||||||||||
2015 | $ | 47 | $ | 12 | ||||||||||||||||
2016 | $ | 48 | $ | 12 | ||||||||||||||||
2017 | $ | 49 | $ | 12 | ||||||||||||||||
2018 | $ | 50 | $ | 12 | ||||||||||||||||
2019 - 2023 | $ | 273 | $ | 59 |
SHAREHOLDERS_EQUITY_Tables
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
SHAREHOLDERS' EQUITY | ' | |||||||
Schedule of components of accumulated other comprehensive income | ' | |||||||
The components of accumulated other comprehensive income attributable to Masco Corporation were as follows, in millions: | ||||||||
At December 31 | ||||||||
2013 | 2012 | |||||||
Cumulative translation adjustments | $ | 418 | $ | 501 | ||||
Unrealized loss on marketable securities, net | (12 | ) | (12 | ) | ||||
Unrealized loss on interest rate swaps | (19 | ) | (21 | ) | ||||
Unrecognized prior service cost and net loss, net | (272 | ) | (409 | ) | ||||
| | | | | | | | |
Accumulated other comprehensive income | $ | 115 | $ | 59 | ||||
| | | | | | | | |
| | | | | | | | |
RECLASSIFICATIONS_FROM_OTHER_C1
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME | ' | |||||||||||
Schedule of reclassifications from accumulated other comprehensive income | ' | |||||||||||
The reclassifications from accumulated other comprehensive income to the income statement were as follows, in millions: | ||||||||||||
Amount Reclassified | ||||||||||||
Twelve Months Ended December 31, | ||||||||||||
Accumulated Other | 2013 | 2012 | 2011 | Income Statement Line Item | ||||||||
Comprehensive Income | ||||||||||||
Amortization of defined benefit pension: | ||||||||||||
Actuarial losses, net | $ | 18 | $ | 16 | $ | 11 | Selling, General & Administrative Expense | |||||
2 | (9 | ) | 5 | Tax expense (benefit) | ||||||||
| | | | | | | | | | | | |
$ | 20 | $ | 7 | $ | 16 | Net of tax | ||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Interest rate swaps | $ | 2 | $ | 2 | $ | — | Interest expense | |||||
— | — | — | Tax expense | |||||||||
| | | | | | | | | | | | |
$ | 2 | $ | 2 | $ | — | Net of tax | ||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||||||
Schedule of information about the Company by segment and geographic area | ' | ||||||||||||||||||||||||||||
Information about the Company by segment and geographic area was as follows, in millions: | |||||||||||||||||||||||||||||
Net Sales | Operating Profit (Loss) (5)(6) | Assets at | |||||||||||||||||||||||||||
(1)(2)(3)(4)(5) | December 31 (9)(10) | ||||||||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||||
The Company's operations by segment were: | |||||||||||||||||||||||||||||
Cabinets and Related Products | $ | 1,014 | $ | 939 | $ | 934 | $ | (10 | ) | $ | (89 | ) | $ | (126 | ) | $ | 659 | $ | 700 | $ | 792 | ||||||||
Plumbing Products | 3,183 | 2,955 | 2,913 | 394 | 307 | 322 | 2,040 | 2,012 | 1,959 | ||||||||||||||||||||
Installation and Other Services | 1,412 | 1,209 | 1,077 | 37 | (19 | ) | (79 | ) | 1,465 | 1,444 | 1,427 | ||||||||||||||||||
Decorative Architectural Products | 1,927 | 1,818 | 1,670 | 351 | 329 | 196 | 812 | 799 | 770 | ||||||||||||||||||||
Other Specialty Products | 637 | 574 | 576 | 35 | (31 | ) | (401 | ) | 693 | 704 | 768 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 8,173 | $ | 7,495 | $ | 7,170 | $ | 807 | $ | 497 | $ | (88 | ) | $ | 5,669 | $ | 5,659 | $ | 5,716 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Company's operations by geographic area were: | |||||||||||||||||||||||||||||
North America | $ | 6,634 | $ | 6,046 | $ | 5,669 | $ | 649 | $ | 360 | $ | (259 | ) | $ | 4,295 | $ | 4,363 | $ | 4,441 | ||||||||||
International, principally Europe | 1,539 | 1,449 | 1,501 | 158 | 137 | 171 | 1,374 | 1,296 | 1,275 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total, as above | $ | 8,173 | $ | 7,495 | $ | 7,170 | 807 | 497 | (88 | ) | 5,669 | 5,659 | 5,716 | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General corporate expense, net (7) | (134 | ) | (126 | ) | (118 | ) | |||||||||||||||||||||||
Charge for litigation settlements, net (8) | — | (77 | ) | (9 | ) | ||||||||||||||||||||||||
Gain from sales of fixed assets, net | — | 8 | — | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating profit (loss), as reported | 673 | 302 | (215 | ) | |||||||||||||||||||||||||
(239 | ) | (229 | ) | (177 | ) | ||||||||||||||||||||||||
Other income (expense), net | |||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | $ | 434 | $ | 73 | $ | (392 | ) | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate assets | 1,264 | 1,013 | 1,339 | ||||||||||||||||||||||||||
Assets held for sale | — | 203 | 242 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 6,933 | $ | 6,875 | $ | 7,297 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and Amortization (5) | |||||||||||||||||||||||||||||
Property Additions (5) | 2013 | 2012 | 2011 | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||||
The Company's operations by segment were: | |||||||||||||||||||||||||||||
Cabinets and Related Products | $ | 9 | $ | 15 | $ | 14 | $ | 42 | $ | 57 | $ | 66 | |||||||||||||||||
Plumbing Products | 71 | 67 | 85 | 65 | 69 | 68 | |||||||||||||||||||||||
Installation and Other Services | 14 | 11 | 9 | 27 | 30 | 32 | |||||||||||||||||||||||
Decorative Architectural Products | 16 | 11 | 8 | 17 | 15 | 15 | |||||||||||||||||||||||
Other Specialty Products | 10 | 11 | 17 | 22 | 21 | 48 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
120 | 115 | 133 | 173 | 192 | 229 | ||||||||||||||||||||||||
Unallocated amounts, principally related to corporate assets | 4 | 2 | 6 | 11 | 11 | 16 | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
Total | $ | 124 | $ | 117 | $ | 139 | $ | 184 | $ | 203 | $ | 245 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | ||||||||||
-1 | |||||||||||||||||||||||||||||
Included in net sales were export sales from the U.S. of $227 million, $229 million and $241 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
-2 | |||||||||||||||||||||||||||||
Excluded from net sales were intra-company sales between segments of approximately two percent of net sales in each of 2013, 2012 and 2011. | |||||||||||||||||||||||||||||
-3 | |||||||||||||||||||||||||||||
Included in net sales were sales to one customer of $2,280 million, $2,143 million and $1,984 million in 2013, 2012 and 2011, respectively. Such net sales were included in the following segments: Cabinets and Related Products, Plumbing Products, Decorative Architectural Products and Other Specialty Products. | |||||||||||||||||||||||||||||
-4 | |||||||||||||||||||||||||||||
Net sales from the Company's operations in the U.S. were $6,359 million, $5,793 million and $5,394 million in 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
-5 | |||||||||||||||||||||||||||||
Net sales, operating (loss) profit, property additions and depreciation and amortization expense for 2013, 2012 and 2011 excluded the results of businesses reported as discontinued operations in 2013, 2012 and 2011. | |||||||||||||||||||||||||||||
-6 | |||||||||||||||||||||||||||||
Included in segment operating profit (loss) for 2012 was an impairment charge for other intangible assets as follows: Other Specialty Products – $42 million. Included in segment operating (loss) profit for 2011 were impairment charges for goodwill and other intangible assets as follows: Plumbing Products – $1 million; Decorative Architectural Products – $75 million; and Other Specialty Products – $374 million. | |||||||||||||||||||||||||||||
-7 | |||||||||||||||||||||||||||||
General corporate expense, net included those expenses not specifically attributable to the Company's segments. | |||||||||||||||||||||||||||||
-8 | |||||||||||||||||||||||||||||
The charge for litigation settlement, net in 2012 primarily relates to a business in the Installation and Other Services segment and in 2011 relates to business units in the Cabinets and Related Products and the Other Specialty Products segments. | |||||||||||||||||||||||||||||
-9 | |||||||||||||||||||||||||||||
Long-lived assets of the Company's operations in the U.S. and Europe were $2,685 million and $481 million, $2,792 million and $467 million, and $2,962 million and $455 million at December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||
-10 | |||||||||||||||||||||||||||||
Segment assets for 2012 and 2011 excluded the assets of businesses reported as discontinued operations in the respective years. | |||||||||||||||||||||||||||||
OTHER_INCOME_EXPENSE_NET_Table
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
OTHER INCOME (EXPENSE), NET | ' | ||||||||||
Schedule of components of other, net, which is included in other income (expense), net | ' | ||||||||||
Other, net, which is included in other income (expense), net, was as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income from cash and cash investments | $ | 3 | $ | 6 | $ | 8 | |||||
Other interest income | 2 | 1 | 1 | ||||||||
Income from financial investments, net (Note E) | 11 | 22 | 73 | ||||||||
Other items, net | (20 | ) | (4 | ) | (5 | ) | |||||
| | | | | | | | | | | |
Total other, net | $ | (4 | ) | $ | 25 | $ | 77 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
INCOME TAXES | ' | ||||||||||
Schedule of components of income taxes expense (benefit) from continuing operations | ' | ||||||||||
(In Millions) | |||||||||||
2013 | 2012 | 2011 | |||||||||
Income (loss) from continuing operations before income taxes: | |||||||||||
U.S. | $ | 279 | $ | (84 | ) | $ | (575 | ) | |||
Foreign | 155 | 157 | 183 | ||||||||
| | | | | | | | | | | |
$ | 434 | $ | 73 | $ | (392 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income tax expense (benefit) on income (loss) from continuing operations: | |||||||||||
Currently payable: | |||||||||||
U.S. Federal | $ | 3 | $ | — | $ | — | |||||
State and local | 4 | (2 | ) | (1 | ) | ||||||
Foreign | 58 | 51 | 63 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 41 | 31 | (103 | ) | |||||||
State and local | 7 | 7 | — | ||||||||
Foreign | (2 | ) | 4 | 1 | |||||||
| | | | | | | | | | | |
$ | 111 | $ | 91 | $ | (40 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred tax assets at December 31: | |||||||||||
Receivables | $ | 12 | $ | 14 | |||||||
Inventories | 23 | 24 | |||||||||
Other assets, principally stock-based compensation | 103 | 118 | |||||||||
Accrued liabilities | 157 | 156 | |||||||||
Long-term liabilities | 195 | 253 | |||||||||
Net operating loss carryforward | 317 | 400 | |||||||||
Tax credit carryforward | 38 | 25 | |||||||||
| | | | | | | | | | | |
845 | 990 | ||||||||||
Valuation allowance | (670 | ) | (787 | ) | |||||||
| | | | | | | | | | | |
175 | 203 | ||||||||||
| | | | | | | | | | | |
Deferred tax liabilities at December 31: | |||||||||||
Property and equipment | 148 | 180 | |||||||||
Intangibles | 342 | 286 | |||||||||
Investment in foreign subsidiaries | 5 | 8 | |||||||||
Other | 4 | 9 | |||||||||
| | | | | | | | | | | |
499 | 483 | ||||||||||
| | | | | | | | | | | |
Net deferred tax liability at December 31 | $ | 324 | $ | 280 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of the U.S. Federal statutory tax rate to the income tax expense (benefit) on income (loss) from continuing operations | ' | ||||||||||
2013 | 2012 | 2011 | |||||||||
U.S. Federal statutory tax rate – expense (benefit) | 35 | % | 35 | % | (35 | )% | |||||
State and local taxes, net of U.S. Federal tax benefit | 2 | 4 | — | ||||||||
Lower taxes on foreign earnings | — | (9 | ) | — | |||||||
U.S. and foreign taxes on distributed and undistributed foreign earnings | — | 1 | — | ||||||||
Goodwill and other intangible assets impairment charges providing no tax benefit | — | 2 | 3 | ||||||||
U.S. Federal valuation allowance | (11 | ) | 89 | 24 | |||||||
Other, net | — | 3 | (2 | ) | |||||||
| | | | | | | | | | | |
Effective tax rate – expense (benefit) | 26 | % | 125 | % | (10 | )% | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ||||||||||
(In millions) | |||||||||||
Uncertain Tax Positions | Interest and Penalties | Total | |||||||||
Balance at January 1, 2012 | $ | 61 | $ | 20 | $ | 81 | |||||
Current year tax positions: | |||||||||||
Additions | 6 | 6 | |||||||||
Prior year tax positions: | |||||||||||
Reductions | (4 | ) | (4 | ) | |||||||
Settlements with tax authorities | — | — | |||||||||
Lapse of applicable statute of limitations | (12 | ) | (12 | ) | |||||||
Interest and penalties recognized in income tax expense | — | (3 | ) | (3 | ) | ||||||
| | | | | | | | | | | |
Balance at December 31, 2012 | $ | 51 | $ | 17 | $ | 68 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Current year tax positions: | |||||||||||
Additions | $ | 9 | $ | 9 | |||||||
Prior year tax positions: | |||||||||||
Additions | 1 | 1 | |||||||||
Reductions | (2 | ) | (2 | ) | |||||||
Settlements with tax authorities | (1 | ) | (1 | ) | |||||||
Lapse of applicable statute of limitations | (12 | ) | (12 | ) | |||||||
Interest and penalties recognized in income tax expense | $ | (4 | ) | (4 | ) | ||||||
| | | | | | | | | | | |
Balance at December 31, 2013 | $ | 46 | $ | 13 | $ | 59 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
EARNINGS_PER_COMMON_SHARE_Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
EARNINGS PER COMMON SHARE | ' | ||||||||||
Schedule of reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share | ' | ||||||||||
Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: | |||||||||||
2013 | 2012 | 2011 | |||||||||
Numerator (basic and diluted): | |||||||||||
Income (loss) from continuing operations | $ | 282 | $ | (53 | ) | $ | (394 | ) | |||
Less: Allocation to unvested restricted stock awards | 6 | 2 | 3 | ||||||||
| | | | | | | | | | | |
Income (loss) from continuing operations attributable to common shareholders | 276 | (55 | ) | (397 | ) | ||||||
| | | | | | | | | | | |
Loss from discontinued operations, net | (10 | ) | (61 | ) | (181 | ) | |||||
Allocation to unvested restricted stock awards | — | — | — | ||||||||
| | | | | | | | | | | |
Loss from discontinued operations attributable to common shareholders | (10 | ) | (61 | ) | (181 | ) | |||||
| | | | | | | | | | | |
Net income (loss) available to common shareholders | $ | 266 | $ | (116 | ) | $ | (578 | ) | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Basic common shares (based upon weighted average) | 350 | 349 | 348 | ||||||||
Add: | |||||||||||
Contingent common shares | — | — | — | ||||||||
Stock option dilution | 2 | — | — | ||||||||
| | | | | | | | | | | |
Diluted common shares | 352 | 349 | 348 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
OTHER_COMMITMENTS_AND_CONTINGE1
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
OTHER COMMITMENTS AND CONTINGENCIES | ' | |||||||
Schedule of changes in the Company's warranty liability | ' | |||||||
Changes in the Company's warranty liability were as follows, in millions: | ||||||||
2013 | 2012 | |||||||
Balance at January 1 | $ | 118 | $ | 102 | ||||
Accruals for warranties issued during the year | 42 | 42 | ||||||
Accruals related to pre-existing warranties | 6 | 16 | ||||||
Settlements made (in cash or kind) during the year | (42 | ) | (38 | ) | ||||
Other, net (including currency translation) | — | (4 | ) | |||||
| | | | | | | | |
Balance at December 31 | $ | 124 | $ | 118 | ||||
| | | | | | | | |
| | | | | | | | |
INTERIM_FINANCIAL_INFORMATION_1
INTERIM FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
INTERIM FINANCIAL INFORMATION (UNAUDITED) | ' | ||||||||||||||||
Schedule of interim financial information | ' | ||||||||||||||||
Quarters Ended | |||||||||||||||||
(In Millions, Except Per Common Share Data) | |||||||||||||||||
Total Year | December 31 | September 30 | June 30 | March 31 | |||||||||||||
2013 | |||||||||||||||||
Net sales | $ | 8,173 | $ | 1,998 | $ | 2,150 | $ | 2,149 | $ | 1,876 | |||||||
Gross profit | $ | 2,255 | $ | 531 | $ | 607 | $ | 609 | $ | 508 | |||||||
Income from continuing operations | $ | 282 | $ | 39 | $ | 105 | $ | 82 | $ | 56 | |||||||
Net income | $ | 272 | $ | 45 | $ | 103 | $ | 77 | $ | 47 | |||||||
Earnings per common share: | |||||||||||||||||
Basic: | |||||||||||||||||
Income from continuing operations | $ | 0.79 | $ | 0.11 | $ | 0.29 | $ | 0.23 | $ | 0.16 | |||||||
Net income | $ | 0.76 | $ | 0.13 | $ | 0.29 | $ | 0.22 | $ | 0.13 | |||||||
Diluted: | |||||||||||||||||
Income from continuing operations | $ | 0.78 | $ | 0.11 | $ | 0.29 | $ | 0.23 | $ | 0.16 | |||||||
Net income | $ | 0.76 | $ | 0.12 | $ | 0.29 | $ | 0.21 | $ | 0.13 | |||||||
2012 | |||||||||||||||||
Net sales | $ | 7,495 | $ | 1,831 | $ | 1,913 | $ | 1,945 | $ | 1,806 | |||||||
Gross profit | $ | 1,956 | $ | 451 | $ | 500 | $ | 521 | $ | 484 | |||||||
(Loss) income from continuing operations | $ | (53 | ) | $ | (70 | ) | $ | 26 | $ | (51 | ) | $ | 42 | ||||
Net (loss) income | $ | (114 | ) | $ | (87 | ) | $ | 15 | $ | (75 | ) | $ | 33 | ||||
(Loss) earnings per common share: | |||||||||||||||||
Basic: | |||||||||||||||||
(Loss) income from continuing operations | $ | (.16 | ) | $ | (.20 | ) | $ | 0.07 | $ | (.15 | ) | $ | 0.12 | ||||
Net (loss) income | $ | (.33 | ) | $ | (.25 | ) | $ | 0.04 | $ | (.22 | ) | $ | 0.09 | ||||
Diluted: | |||||||||||||||||
(Loss) income from continuing operations | $ | (.16 | ) | $ | (.20 | ) | $ | 0.07 | $ | (.15 | ) | $ | 0.12 | ||||
Net (loss) income | $ | (.33 | ) | $ | (.25 | ) | $ | 0.04 | $ | (.22 | ) | $ | 0.09 | ||||
ACCOUNTING_POLICIES_Details
ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Minimum | Maximum | ||
Customer promotion costs | ' | ' | ' | ' |
Expected useful life of product | ' | ' | '3 years | '5 years |
Receivables | ' | ' | ' | ' |
Certain receivables allowances including allowances for doubtful accounts | $57 | $71 | ' | ' |
Unbilled revenue related to Installation and Other Services | $24 | $18 | ' | ' |
ACCOUNTING_POLICIES_Details_2
ACCOUNTING POLICIES (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property and equipment | ' | ' | ' |
Depreciation expense | $175 | $192 | $234 |
Cabinets and Related Products and Plumbing Products segments | ' | ' | ' |
Property and equipment | ' | ' | ' |
Accelerated depreciation expenses | 13 | 28 | ' |
Cabinets and Related Products and Other Specialty Products segment | ' | ' | ' |
Property and equipment | ' | ' | ' |
Accelerated depreciation expenses | ' | ' | $52 |
Buildings | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Annual depreciation rates (as a percent) | 2.00% | ' | ' |
Buildings | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Annual depreciation rates (as a percent) | 10.00% | ' | ' |
Land improvements | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Annual depreciation rates (as a percent) | 2.00% | ' | ' |
Land improvements | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Annual depreciation rates (as a percent) | 10.00% | ' | ' |
Machinery and equipment | Minimum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Annual depreciation rates (as a percent) | 5.00% | ' | ' |
Machinery and equipment | Maximum | ' | ' | ' |
Property and equipment | ' | ' | ' |
Annual depreciation rates (as a percent) | 33.00% | ' | ' |
ACCOUNTING_POLICIES_Details_3
ACCOUNTING POLICIES (Details 3) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and Other Intangible Assets | ' | ' |
Period of operation forecasts used in impairment test | '5 years | ' |
Weighted average cost of capital (as a percent) | 10.00% | ' |
Minimum | ' | ' |
Goodwill and Other Intangible Assets | ' | ' |
Assumed annual growth rate of cash flows (as a percent) | 1.00% | ' |
Discount rate on estimated discounted cash flows (as a percent) | 11.50% | 11.00% |
Maximum | ' | ' |
Goodwill and Other Intangible Assets | ' | ' |
Assumed annual growth rate of cash flows (as a percent) | 3.00% | ' |
Discount rate on estimated discounted cash flows (as a percent) | 13.50% | 13.00% |
ACCOUNTING_POLICIES_Details_4
ACCOUNTING POLICIES (Details 4) (Stock awards) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum | ' |
Stock-based compensation | ' |
Award vesting period | '5 years |
Maximum | ' |
Stock-based compensation | ' |
Award vesting period | '10 years |
Age 66 or older | ' |
Stock-based compensation | ' |
Award vesting period | '5 years |
ACCOUNTING_POLICIES_Details_5
ACCOUNTING POLICIES (Details 5) (Hansgrohe SE) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Hansgrohe SE | ' | ' |
Noncontrolling interest | ' | ' |
Ownership percentage of Hansgrohe SE | 68.00% | 68.00% |
ACCOUNTING_POLICIES_Details_6
ACCOUNTING POLICIES (Details 6) (USD $) | 3 Months Ended | 12 Months Ended | |||||||
In Millions, unless otherwise specified | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Impact of previously issued consolidated balance sheets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash investments | $1,028 | $828 | $889 | $1,612 | $1,491 | $1,223 | $1,040 | $1,353 | $1,425 |
Short-term bank deposits | ' | ' | ' | ' | ' | 321 | 311 | 303 | ' |
Total current assets | ' | ' | ' | ' | ' | 3,468 | 3,217 | 3,429 | ' |
Impact of previously issued consolidated statement of cash flows | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net cash (for) investing activities | 62 | 70 | -17 | 37 | 10 | -77 | -29 | -84 | -244 |
Effect of exchange rate changes on cash and cash investments | ' | ' | ' | ' | ' | -3 | 11 | -8 | -7 |
Decrease in cash and cash investments | ' | ' | ' | ' | ' | 183 | -313 | -72 | 174 |
Impact of previously issued consolidated statement of cash flows | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash investments | 1,028 | 828 | 889 | 1,612 | 1,491 | 1,223 | 1,040 | 1,353 | 1,425 |
Short-term bank deposits | 195 | 204 | 277 | 241 | 297 | ' | ' | ' | ' |
Net cash (for) investing activities | 62 | 70 | -17 | 37 | 10 | -77 | -29 | -84 | -244 |
As Reported | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impact of previously issued consolidated balance sheets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash investments | 1,223 | 1,032 | 1,166 | 1,853 | 1,788 | ' | 1,351 | 1,656 | ' |
Total current assets | ' | ' | ' | ' | ' | ' | 3,217 | 3,429 | ' |
Impact of previously issued consolidated statement of cash flows | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net cash (for) investing activities | -51 | -30 | -42 | -15 | -2 | ' | -27 | -61 | -109 |
Effect of exchange rate changes on cash and cash investments | ' | ' | ' | ' | ' | ' | 17 | -18 | -14 |
Decrease in cash and cash investments | ' | ' | ' | ' | ' | ' | -305 | -59 | 302 |
Impact of previously issued consolidated statement of cash flows | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash investments | 1,223 | 1,032 | 1,166 | 1,853 | 1,788 | ' | 1,351 | 1,656 | ' |
Net cash (for) investing activities | ($51) | ($30) | ($42) | ($15) | ($2) | ' | ($27) | ($61) | ($109) |
Foreign short-term bank deposits | Minimum | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term | ' | ' | ' | ' | ' | '3 months | ' | ' | ' |
Foreign short-term bank deposits | Maximum | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term | ' | ' | ' | ' | ' | '12 months | ' | ' | ' |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Selected financial information for the discontinued operations | ' | ' | ' | ' |
Net proceeds from disposition of discontinued businesses | ' | $17 | $7 | ' |
Net sales | ' | 265 | 321 | 389 |
Operating loss from discontinued operations | ' | -7 | -44 | -58 |
Impairment of assets held for sale | -10 | -10 | -3 | -130 |
Gain (loss) on disposal of discontinued operations, net | ' | 3 | -6 | -3 |
Loss before income tax | ' | -14 | -53 | -191 |
Income tax (benefit) expense | ' | -4 | 8 | -10 |
Loss from discontinued operations, net | ' | -10 | -61 | -181 |
Currency translation expense related to sale of the ready-to-assemble cabinet business | ' | 18 | ' | ' |
Impairment of indefinite and definite-lived intangible assets | ' | ' | ' | 56 |
Impairment of goodwill | ' | ' | ' | 57 |
Impairment of fixed and other assets | ' | ' | ' | 17 |
Impairment of fixed and other assets related to businesses disposed in prior years | ' | ' | ' | $3 |
DISCONTINUED_OPERATIONS_Detail1
DISCONTINUED OPERATIONS (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2012 |
Balance sheet items reclassified as held for sale | ' | ' |
Receivables | ' | $32 |
Inventories | ' | 66 |
Prepaid expenses and other | ' | 2 |
Property and equipment, net | ' | 103 |
Total assets | ' | 203 |
Accounts payable | ' | 31 |
Accrued liabilities | ' | 14 |
Deferred income taxes | ' | 4 |
Total liabilities | ' | 49 |
Net sales from Decorative Architectural Products segment | 1 | ' |
Operating loss | 15 | ' |
Write-down inventory | $8 | ' |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2013 | Dec. 31, 2011 |
Small U.K. door business | Small manufacturer of hot tubs | |
Acquisitions | ' | ' |
Total net cash purchase price of acquisition | $4 | $10 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
INVENTORIES | ' | ' |
Finished goods | $398 | $369 |
Raw material | 268 | 261 |
Work in process | 99 | 96 |
Total | $765 | $726 |
FAIR_VALUE_OF_FINANCIAL_INVEST2
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Every 7 days | Every 28 days | Every 35 days | Private equity funds | Venture capital funds | Buyout funds | Recurring investments | Recurring investments | Recurring investments | Recurring investments | Recurring investments | Non-recurring investments | Non-recurring investments | Non-recurring investments | Non-recurring investments | Non-recurring investments | Non-recurring investments | Non-recurring investments | |||
Funds | Funds | Level 3 | Level 3 | Auction rate securities | Auction rate securities | TriMas common stock | Private equity funds | Private equity funds | Private equity funds | Other investments | Other investments | |||||||||
Level 3 | Level 3 | Level 3 | ||||||||||||||||||
Fair value of financial investments and liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recurring investments, Available-for-sale securities | ' | ' | ' | ' | ' | ' | ' | ' | $22 | $22 | $22 | $22 | ' | ' | ' | ' | ' | ' | ' | ' |
Non-recurring investments | ' | ' | ' | ' | ' | ' | 15 | 48 | ' | ' | ' | ' | ' | 66 | 73 | 63 | 69 | ' | 3 | 4 |
Total financial investments | 88 | 95 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost basis available-for-sale securities | 19 | 19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pre-tax unrealized gains, available-for-sale securities | 3 | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recorded basis, available for sale securities | 22 | 22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of funds | ' | ' | ' | ' | ' | ' | 14 | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Auction rate securities interest rate reset period | ' | ' | '7 days | '28 days | '35 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Changes in Level 3 financial investments | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment loss, cost method investments | ' | 2 | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Aggregate carrying value of investments not reviewed for impairment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67 | ' | ' | ' |
Number of shares sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,974,000 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $43 | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_OF_FINANCIAL_INVEST3
FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income from financial investments, net and impairment charges | ' | ' | ' |
Realized gains from marketable securities | ' | ' | $41,000,000 |
Impairment charges | ' | 2,000,000 | ' |
Income from financial investments, net | 11,000,000 | 22,000,000 | 73,000,000 |
Estimated market value of long-term and short-term debt | 3,700,000,000 | 4,000,000,000 | ' |
Aggregate carrying value of long-term and short-term debt | 3,400,000,000 | 3,600,000,000 | ' |
Private equity funds | ' | ' | ' |
Income from financial investments, net and impairment charges | ' | ' | ' |
Realized gains from private equity funds | 11,000,000 | 24,000,000 | 32,000,000 |
Impairment charges | ' | $2,000,000 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Mar. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 |
In Millions, unless otherwise specified | Derivatives designated as hedging instruments | Derivatives designated as hedging instruments | Derivatives designated as hedging instruments | Derivatives designated as hedging instruments | Derivatives designated as hedging instruments | Derivatives designated as hedging instruments | |
Cash flow hedges | Cash flow hedges | Cash flow hedges | Cash flow hedges | Fair value hedge | Fair value hedge | ||
Interest Rate Swap Agreements | Interest Rate Swap Agreements | Interest Rate Swap Agreements | Interest Rate Swap Agreements | Interest Rate Swap Agreements | Interest Rate Swap Agreements | ||
3 month LIBOR interest rate swap, cash flow hedge terminated March 2012 | 3 month LIBOR interest rate swap, cash flow hedge terminated March 2012 | Other, net | Interest expense | Interest expense | Interest expense | ||
3 month LIBOR interest rate swap, cash flow hedge terminated March 2012 | 3 month LIBOR interest rate swap, cash flow hedge terminated March 2012 | Two fair value interest rate swap agreements terminated in 2008 and 2004 | Two fair value interest rate swap agreements terminated in 2008 and 2004 | ||||
item | |||||||
Interest Rate Swap Agreements | ' | ' | ' | ' | ' | ' | ' |
Debt issued | $400 | ' | ' | ' | ' | ' | ' |
Forecasted debt issuance variable rate period | ' | '3-month LIBOR | ' | ' | ' | ' | ' |
Ineffective portion of the cash flow hedges | ' | ' | ' | 2 | ' | ' | ' |
Interest rate swap recorded in other comprehensive income | ' | ' | 23 | ' | ' | ' | ' |
Balance remaining in accumulated other comprehensive income | ' | 19 | ' | ' | ' | ' | ' |
Decrease in interest expense due to amortization of gains on termination of interest rate swap agreement | ' | ' | ' | ' | 6 | ' | 10 |
Interest expense due to amortization of losses on termination of interest rate swap agreement | ' | ' | ' | ' | $2 | ' | ' |
Number of swap agreements | ' | ' | ' | ' | ' | 2 | ' |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) (Not designated as a hedge, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative instruments and hedging activities | ' | ' | ' |
Total gains (losses) | ($4) | ' | ($1) |
Foreign currency exchange contracts | Other income (expense), net | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Total gains (losses) | 2 | -2 | 3 |
Foreign currency forward contracts | Other income (expense), net | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Total gains (losses) | 1 | ' | 3 |
Metals contracts | Cost of sales | ' | ' | ' |
Derivative instruments and hedging activities | ' | ' | ' |
Total gains (losses) | ($7) | $2 | ($7) |
DERIVATIVE_INSTRUMENTS_AND_HED4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Recurring | Level 2 | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Assets | ' | $2 |
Liabilities | 5 | 8 |
Foreign currency exchange contracts | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Amount | 53 | 172 |
Foreign currency exchange contracts | Current liabilities | Recurring | Level 2 | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Liabilities | 2 | 5 |
Foreign currency forward contracts | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Amount | 88 | 76 |
Foreign currency forward contracts | Current assets | Recurring | Level 2 | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Assets | ' | 1 |
Liabilities | ' | 1 |
Foreign currency forward contracts | Current liabilities | Recurring | Level 2 | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Liabilities | 1 | ' |
Metals contracts | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Amount | 48 | 35 |
Metals contracts | Current liabilities | Recurring | Level 2 | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Assets | ' | 1 |
Liabilities | $2 | $2 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Property and Equipment | ' | ' |
Property and equipment, Gross | $2,990 | $3,013 |
Less: Accumulated depreciation | 1,738 | 1,687 |
Total | 1,252 | 1,326 |
Land and improvements | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, Gross | 135 | 140 |
Buildings | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, Gross | 809 | 819 |
Machinery and equipment | ' | ' |
Property and Equipment | ' | ' |
Property and equipment, Gross | $2,046 | $2,054 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Leases | ' | ' | ' |
Rental expense | $93 | $94 | $102 |
Future minimum lease payments 2014 | 62 | ' | ' |
Future minimum lease payments 2015 | 47 | ' | ' |
Future minimum lease payments 2016 | 32 | ' | ' |
Future minimum lease payments 2017 | 20 | ' | ' |
Future minimum lease payments 2018 | 14 | ' | ' |
Future minimum lease payments 2019 and beyond | 86 | ' | ' |
Former owners and current management | Lease of operating facilities | ' | ' | ' |
Operating Leases | ' | ' | ' |
Rental expense to related parties | $6 | $5 | $5 |
PROPERTY_AND_EQUIPMENT_Details2
PROPERTY AND EQUIPMENT (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Facilities held-for-sale | ' | ' |
Net book value | $1,252 | $1,326 |
Several facilities held for sale | Cabinets and Related Products and Other Specialty Products | ' | ' |
Facilities held-for-sale | ' | ' |
Net book value | $6 | $14 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Goodwill | ' | ' | ' |
Gross Goodwill | $3,873 | $3,864 | $3,861 |
Accumulated Impairment Losses | -1,970 | -1,970 | -1,970 |
Net Goodwill | 1,903 | 1,894 | ' |
Changes in the carrying amount of goodwill | ' | ' | ' |
Beginning balance | 1,894 | 1,891 | ' |
Other | -6 | -3 | ' |
Additions | 3 | ' | ' |
Ending balance | 1,903 | 1,894 | ' |
Cabinets and Related Products segment | ' | ' | ' |
Goodwill | ' | ' | ' |
Gross Goodwill | 240 | 240 | 240 |
Accumulated Impairment Losses | -59 | -59 | -59 |
Net Goodwill | 181 | 181 | 181 |
Changes in the carrying amount of goodwill | ' | ' | ' |
Beginning balance | ' | ' | 181 |
Ending balance | 181 | 181 | 181 |
Plumbing Products | ' | ' | ' |
Goodwill | ' | ' | ' |
Gross Goodwill | 550 | 544 | 541 |
Accumulated Impairment Losses | -340 | -340 | -340 |
Net Goodwill | 210 | 204 | ' |
Changes in the carrying amount of goodwill | ' | ' | ' |
Beginning balance | 204 | 201 | ' |
Other | -6 | -3 | ' |
Ending balance | 210 | 204 | ' |
Installation and Other Services | ' | ' | ' |
Goodwill | ' | ' | ' |
Gross Goodwill | 1,806 | 1,806 | 1,806 |
Accumulated Impairment Losses | -762 | -762 | -762 |
Net Goodwill | 1,044 | 1,044 | 1,044 |
Changes in the carrying amount of goodwill | ' | ' | ' |
Beginning balance | ' | ' | 1,044 |
Ending balance | 1,044 | 1,044 | 1,044 |
Decorative Architectural Products | ' | ' | ' |
Goodwill | ' | ' | ' |
Gross Goodwill | 294 | 294 | 294 |
Accumulated Impairment Losses | -75 | -75 | -75 |
Net Goodwill | 219 | 219 | 219 |
Changes in the carrying amount of goodwill | ' | ' | ' |
Beginning balance | ' | ' | 219 |
Ending balance | 219 | 219 | 219 |
Other Specialty Products | ' | ' | ' |
Goodwill | ' | ' | ' |
Gross Goodwill | 983 | 980 | 980 |
Accumulated Impairment Losses | -734 | -734 | -734 |
Net Goodwill | 249 | ' | 246 |
Changes in the carrying amount of goodwill | ' | ' | ' |
Beginning balance | 246 | ' | 246 |
Additions | 3 | ' | ' |
Ending balance | $249 | ' | $246 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Goodwill and other intangible assets | ' | ' | ' |
Pre-tax impairment charges for goodwill | $0 | $0 | $442 |
After tax impairment charges for goodwill | ' | ' | 286 |
Impairment of long-lived assets | 0 | ' | ' |
Other indefinite-lived intangible assets | 133 | 132 | ' |
Pre-tax impairment charges for other indefinite-lived intangible assets | ' | 42 | 8 |
After tax impairment charges for other indefinite-lived intangible assets | ' | 27 | 5 |
Carrying value of definite-lived intangible assets | 16 | 19 | ' |
Accumulated amortization | 62 | 57 | ' |
Amortization expense related to the definite-lived intangible assets | 5 | 6 | 6 |
Amortization expense related to the definite-lived intangible assets, 2014 | 5 | ' | ' |
Amortization expense related to the definite-lived intangible assets, 2015 | 4 | ' | ' |
Amortization expense related to the definite-lived intangible assets, 2016 | 3 | ' | ' |
Amortization expense related to the definite-lived intangible assets, 2017 | 1 | ' | ' |
Amortization expense related to the definite-lived intangible assets, 2018 | $1 | ' | ' |
Weighted average | ' | ' | ' |
Goodwill and other intangible assets | ' | ' | ' |
Weighted average amortization period | '6 years | '6 years | ' |
OTHER_ASSETS_Details
OTHER ASSETS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OTHER ASSETS | ' | ' | ' |
Financial investments | $88 | $95 | ' |
In-store displays, net | 21 | 35 | ' |
Debenture expense | 24 | 25 | ' |
Notes receivable | 2 | 2 | ' |
Other | 26 | 27 | ' |
Total | 161 | 184 | ' |
Amortization period of in-store displays, minimum | '3 years | ' | ' |
Amortization period of in-store displays, maximum | '5 years | ' | ' |
Amortization expense related to in-store displays | 19 | 21 | 24 |
Cash spent for in-store displays | $5 | $23 | $17 |
ACCRUED_LIABILITIES_Details
ACCRUED LIABILITIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
ACCRUED LIABILITIES | ' | ' | ' |
Salaries, wages and commissions | $210 | $189 | ' |
Insurance | 166 | 170 | ' |
Warranty | 124 | 118 | 102 |
Advertising and sales promotion | 111 | 93 | ' |
Interest | 58 | 63 | ' |
Employee retirement plans | 48 | 40 | ' |
Income taxes payable | 32 | 27 | ' |
Property, payroll and other taxes | 28 | 24 | ' |
Dividends payable | 27 | 27 | ' |
Derivative instruments | 5 | 6 | ' |
Plant closures | 6 | 5 | ' |
Litigation | 4 | 7 | ' |
Other | 55 | 54 | ' |
Total | $874 | $823 | ' |
DEBT_Details
DEBT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Aug. 15, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 05, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | 7.125% Notes and Debentures Due 15 August 2013 | 7.125% Notes and Debentures Due 15 August 2013 | 7.125% Notes and Debentures Due 15 August 2013 | 4.8% Notes and Debentures Due 15 June 2015 | 4.8% Notes and Debentures Due 15 June 2015 | 6.125% Notes and Debentures Due 3 October 2016 | 6.125% Notes and Debentures Due 3 October 2016 | 5.85% Notes and Debentures Due 15 March 2017 | 5.85% Notes and Debentures Due 15 March 2017 | 6.625% Notes and Debentures Due 15 April 2018 | 6.625% Notes and Debentures Due 15 April 2018 | 7.125% Notes and Debentures Due 15 March 2020 | 7.125% Notes and Debentures Due 15 March 2020 | 5.95% Notes and Debentures Due 15 March 2022 | 5.95% Notes and Debentures Due 15 March 2022 | 5.95% Notes and Debentures Due 15 March 2022 | 7.75% Notes and Debentures Due 1 August 2029 | 7.75% Notes and Debentures Due 1 August 2029 | 6.5% Notes and Debentures Due 15 August 2032 | 6.5% Notes and Debentures Due 15 August 2032 | Other Notes and Debentures | Other Notes and Debentures | ||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt includes notes and debentures | $3,427 | $3,628 | ' | ' | $200 | $500 | $500 | $1,000 | $1,000 | $300 | $300 | $114 | $114 | $500 | $500 | $400 | $400 | ' | $296 | $296 | $300 | $300 | $17 | $18 |
Less: Current portion | 6 | 206 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt | $3,421 | $3,422 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | 7.13% | 7.13% | ' | 4.80% | ' | 6.13% | ' | 5.85% | ' | 6.63% | ' | 7.13% | ' | 5.95% | ' | 5.95% | 7.75% | ' | 6.50% | ' | ' | ' |
DEBT_Details_2
DEBT (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | Mar. 28, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 28, 2013 | Mar. 28, 2013 | Mar. 28, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 28, 2013 | Dec. 31, 2013 | Aug. 15, 2013 | Dec. 31, 2013 | Mar. 05, 2012 | Jan. 31, 2012 | |
Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated March 28, 3013 | Credit Agreement dated as of June 21, 2010, as amended | 7.125% Notes and Debentures Due 15 August 2013 | 7.125% Notes and Debentures Due 15 August 2013 | 5.95% Notes and Debentures Due 15 March 2022 | 5.95% Notes and Debentures Due 15 March 2022 | 5.875% Notes and Debentures Due 15 July 2012 | |||||
Prime rate | Federal funds effective rate | Libor rate | Revolver | Swingline loans | Letters of credit | ||||||||||||||
European euros | |||||||||||||||||||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.13% | 7.13% | 5.95% | 5.95% | 5.88% |
Repurchased and retired debt amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,000,000 | ' | ' | $46,000,000 |
Debt issued | ' | ' | ' | 400,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000,000 | ' |
Effective interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.50% | ' |
Premium paid on repurchase of notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 |
Notes retired | 200,000,000 | 791,000,000 | 58,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 745,000,000 |
Borrowing capacity, maximum | ' | ' | ' | ' | 1,250,000,000 | ' | ' | ' | ' | ' | 500,000,000 | 150,000,000 | 250,000,000 | 1,250,000,000 | ' | ' | ' | ' | ' |
Outstanding and unused Letters of Credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 92,000,000 | ' | ' | ' | ' | ' | ' |
Basis spread | ' | ' | ' | ' | ' | ' | ' | 'prime rate | 'Federal Funds effective rate | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate, basis spread (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt to total adjusted capitalization ratio, maximum (as a percent) | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum interest coverage ratio | ' | ' | ' | ' | 2.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash charges, including goodwill and other intangible asset impairment charges occurring from and after January 1, 2012 that would negatively impact shareholders' equity, maximum allowed to add back in calculation of debt to capitalization ratio | ' | ' | ' | ' | ' | 250,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowing capacity | ' | ' | ' | ' | ' | 1,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Absorption of reduction to shareholders' equity to remain in compliance with covenant | ' | ' | ' | ' | ' | 770,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount borrowed | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities of long term debt in year 2014 | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities of long term debt in year 2015 | 501,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities of long term debt in year 2016 | 1,001,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities of long term debt in year 2017 | 301,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities of long term debt in year 2018 | 115,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Paid | $232,000,000 | $269,000,000 | $254,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock-based compensation | ' | ' | ' |
Pre-tax compensation expense | $54 | $61 | $61 |
Income tax benefit | 20 | 23 | 23 |
Tax rate - before valuation allowance (as a percent) | 37.00% | 37.00% | 37.00% |
Long-term stock awards | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Pre-tax compensation expense | 34 | 35 | 39 |
Stock options | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Pre-tax compensation expense | 13 | 15 | 21 |
Phantom stock awards and stock appreciation rights | ' | ' | ' |
Stock-based compensation | ' | ' | ' |
Pre-tax compensation expense | $7 | $11 | $1 |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 2) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Long-term stock awards | ' | ' | ' |
Unvested stock award shares | ' | ' | ' |
Balance at the beginning of the period (in shares) | 8,000,000 | 10,000,000 | 10,000,000 |
Granted (in shares) | 1,700,000 | 1,000,000 | 2,000,000 |
Vested (in shares) | 2,000,000 | 2,000,000 | 2,000,000 |
Forfeited (in shares) | ' | 1,000,000 | ' |
Balance at the end of the period (in shares) | 8,000,000 | 8,000,000 | 10,000,000 |
Weighted average grant date fair value | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | $16 | $17 | $19 |
Granted (in dollars per share) | $20 | $12 | $13 |
Vested (in dollars per share) | $17 | $18 | $20 |
Forfeited (in dollars per share) | $16 | $17 | $18 |
Balance at the end of the period (in dollars per share) | $17 | $16 | $17 |
Additional disclosures | ' | ' | ' |
Total unrecognized compensation expense | $69 | $72 | $107 |
Remaining weighted average vesting period | '3 years | '4 years | '4 years |
Total market value (at the vesting date) of stock award shares | $38 | $27 | $28 |
2005 Plan | ' | ' | ' |
Long-term stock awards | ' | ' | ' |
Common stock available for granting stock options and other long-term stock incentive awards | 9,300,000 | ' | ' |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 3) (Stock Options, USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock Options | ' | ' | ' |
Stock Options | ' | ' | ' |
Vesting period | '5 years | ' | ' |
Expiration period | '10 years | ' | ' |
Shares | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | 30,000,000 | 36,000,000 | 37,000,000 |
Granted (in shares) | 899,000 | 1,000,000 | 2,000,000 |
Exercised (in shares) | 3,000,000 | 1,000,000 | ' |
Forfeited (in shares) | 3,800,000 | 6,000,000 | 3,000,000 |
Outstanding at the end of the period (in shares) | 24,000,000 | 30,000,000 | 36,000,000 |
Option shares vested and expected to vest at the end of the period | 24,000,000 | 30,000,000 | 36,000,000 |
Option shares exercisable at the end of the period | 20,000,000 | 23,000,000 | 24,000,000 |
Weighted average exercise price | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | $21 | $21 | $21 |
Granted (in dollars per share) | $20 | $12 | $13 |
Exercised (in dollars per share) | $12 | $10 | $8 |
Forfeited (in dollars per share) | $26 | $19 | $22 |
Outstanding at the end of the period (in dollars per share) | $22 | $21 | $21 |
Option shares vested and expected to vest at the end of the period (in dollars per share) | $22 | $21 | $21 |
Option shares exercisable at the end of the period (in dollars per share) | $24 | $24 | $25 |
Aggregate intrinsic value | ' | ' | ' |
Exercised | $23 | $5 | $1 |
Option shares vested and expected to vest at the end of the period | 109 | 55 | 12 |
Option shares exercisable at the end of the period | 62 | 22 | 4 |
Weighted average remaining option term | ' | ' | ' |
Outstanding at the end of the period | '4 years | '5 years | '5 years |
Option shares vested and expected to vest at the end of the period | '4 years | '5 years | '5 years |
Option shares exercisable at the end of the period | '3 years | '4 years | '4 years |
Additional disclosures | ' | ' | ' |
Total unrecognized compensation expense | $9 | $15 | $33 |
Weighted average remaining vesting period | '2 years | '2 years | '3 years |
STOCKBASED_COMPENSATION_Detail3
STOCK-BASED COMPENSATION (Details 4) (Stock Options, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock Options | ' | ' | ' |
Stock Options | ' | ' | ' |
Weighted average grant date fair value (in dollars per share) | $8.35 | $4.44 | $5.07 |
Risk-free interest rate (as a percent) | 1.22% | 1.09% | 2.69% |
Dividend yield (as a percent) | 1.47% | 2.57% | 2.35% |
Volatility factor (as a percent) | 49.07% | 50.97% | 49.03% |
Expected option life | '6 years | '6 years | '6 years |
STOCKBASED_COMPENSATION_Detail4
STOCK-BASED COMPENSATION (Details 5) (USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Range One | ' |
Stock-based compensation | ' |
Exercise price range, low end of range (in dollars per share) | $8 |
Exercise price range, high end of range (in dollars per share) | $21 |
Option Shares Outstanding, Number of Shares | 13 |
Option Shares Outstanding, Weighted Average Remaining Option Term | '6 years |
Option Shares Outstanding, Weighted Average Exercise Price (in dollars per share) | $14 |
Option Shares Exercisable, Number of Shares | 8 |
Option Shares Exercisable, Weighted Average Exercise price (in dollars per share) | $15 |
Range Two | ' |
Stock-based compensation | ' |
Exercise price range, low end of range (in dollars per share) | $26 |
Exercise price range, high end of range (in dollars per share) | $28 |
Option Shares Outstanding, Number of Shares | 3 |
Option Shares Outstanding, Weighted Average Remaining Option Term | '2 years |
Option Shares Outstanding, Weighted Average Exercise Price (in dollars per share) | $27 |
Option Shares Exercisable, Number of Shares | 3 |
Option Shares Exercisable, Weighted Average Exercise price (in dollars per share) | $27 |
Range Three | ' |
Stock-based compensation | ' |
Exercise price range, low end of range (in dollars per share) | $29 |
Exercise price range, high end of range (in dollars per share) | $31 |
Option Shares Outstanding, Number of Shares | 8 |
Option Shares Outstanding, Weighted Average Remaining Option Term | '2 years |
Option Shares Outstanding, Weighted Average Exercise Price (in dollars per share) | $30 |
Option Shares Exercisable, Number of Shares | 9 |
Option Shares Exercisable, Weighted Average Exercise price (in dollars per share) | $30 |
Range Four | ' |
Stock-based compensation | ' |
Exercise price range, low end of range (in dollars per share) | $33 |
Exercise price range, high end of range (in dollars per share) | $36 |
Option Shares Outstanding, Weighted Average Remaining Option Term | '2 years |
Option Shares Outstanding, Weighted Average Exercise Price (in dollars per share) | $34 |
Option Shares Exercisable, Weighted Average Exercise price (in dollars per share) | $34 |
Range Five | ' |
Stock-based compensation | ' |
Exercise price range, low end of range (in dollars per share) | $8 |
Exercise price range, high end of range (in dollars per share) | $36 |
Option Shares Outstanding, Number of Shares | 24 |
Option Shares Outstanding, Weighted Average Remaining Option Term | '4 years |
Option Shares Outstanding, Weighted Average Exercise Price (in dollars per share) | $22 |
Option Shares Exercisable, Number of Shares | 20 |
Option Shares Exercisable, Weighted Average Exercise price (in dollars per share) | $24 |
STOCKBASED_COMPENSATION_Detail5
STOCK-BASED COMPENSATION (Details 6) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Phantom Stock Awards | ' | ' | ' |
Phantom Stock Awards and Stock Appreciation Rights | ' | ' | ' |
Recognized expense (income) related to valuation | $5 | $7 | $2 |
Stock award shares granted | 165,180 | 162,310 | 349,550 |
Fair value of stock award granted | 3 | 2 | 4 |
Cash paid to settle awards | 4 | 3 | 2 |
Accrued compensation cost liability | 14 | 11 | ' |
Unrecognized compensation cost | 4 | 5 | ' |
Equivalent common shares | 1,000,000 | 1,000,000 | ' |
Phantom Stock Awards | Minimum | ' | ' | ' |
Phantom Stock Awards and Stock Appreciation Rights | ' | ' | ' |
Vesting period | '5 years | ' | ' |
Phantom Stock Awards | Maximum | ' | ' | ' |
Phantom Stock Awards and Stock Appreciation Rights | ' | ' | ' |
Vesting period | '10 years | ' | ' |
Stock Appreciation Rights | ' | ' | ' |
Phantom Stock Awards and Stock Appreciation Rights | ' | ' | ' |
Vesting period | '5 years | ' | ' |
Recognized expense (income) related to valuation | 2 | 4 | -1 |
Accrued compensation cost liability | 8 | 6 | ' |
Unrecognized compensation cost | ' | $1 | ' |
Equivalent common shares | 2,000,000 | 2,000,000 | ' |
EMPLOYEE_RETIREMENT_PLANS_Deta
EMPLOYEE RETIREMENT PLANS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Employee Retirement Plans | ' | ' | ' |
Aggregate charges to earnings under defined benefit plan | $31 | $36 | $34 |
Aggregate charges to earnings under defined contribution retirement plan | 54 | 43 | 31 |
Number of regional multi-employer pension plans in which the entity participates | 20 | ' | ' |
Multi-employer plan, period contributions | 4 | 4 | 3 |
Changes in projected benefit obligation: | ' | ' | ' |
Service cost | 31 | 36 | 34 |
Qualified | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Aggregate charges to earnings under defined benefit plan | 3 | 2 | 2 |
Changes in projected benefit obligation: | ' | ' | ' |
Balance at the beginning of the period | 1,056 | 943 | ' |
Service cost | 3 | 2 | 2 |
Interest cost | 40 | 42 | ' |
Actuarial (gain) loss, net | -81 | 100 | ' |
Foreign currency exchange | 7 | 9 | ' |
Benefit payments | -42 | -40 | ' |
Balance at the end of the period | 983 | 1,056 | 943 |
Changes in fair value of plan assets: | ' | ' | ' |
Balance at the beginning of the period | 594 | 504 | ' |
Actual return on plan assets | 65 | 75 | ' |
Foreign currency exchange | 2 | 4 | ' |
Company contributions | 44 | 55 | ' |
Expenses, other | -4 | -4 | ' |
Benefit payments | -42 | -40 | ' |
Balance at the end of the period | 659 | 594 | 504 |
Funded status at the end of the period | -324 | -462 | ' |
Non-Qualified | ' | ' | ' |
Changes in projected benefit obligation: | ' | ' | ' |
Balance at the beginning of the period | 181 | 174 | ' |
Interest cost | 6 | 7 | 8 |
Actuarial (gain) loss, net | -13 | 11 | ' |
Benefit payments | -11 | -11 | ' |
Balance at the end of the period | 163 | 181 | 174 |
Changes in fair value of plan assets: | ' | ' | ' |
Company contributions | 11 | 11 | ' |
Benefit payments | -11 | -11 | ' |
Funded status at the end of the period | ($163) | ($181) | ' |
EMPLOYEE_RETIREMENT_PLANS_Deta1
EMPLOYEE RETIREMENT PLANS (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Amounts in the company's consolidated balance sheets | ' | ' |
Accrued liabilities | ($48) | ($40) |
Qualified | ' | ' |
Amounts in the company's consolidated balance sheets | ' | ' |
Accrued liabilities | -3 | -3 |
Deferred income taxes and other | -321 | -459 |
Total net liability | -324 | -462 |
Amounts in accumulated other comprehensive income before income taxes | ' | ' |
Net loss | 344 | 467 |
Net transition obligation | 1 | 1 |
Net prior service cost | 2 | 2 |
Total | 347 | 470 |
Information for the defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ' | ' |
Projected benefit obligation | 983 | 1,056 |
Accumulated benefit obligation | 982 | 1,054 |
Fair value of plan assets | 659 | 594 |
Non-Qualified | ' | ' |
Amounts in the company's consolidated balance sheets | ' | ' |
Accrued liabilities | -12 | -12 |
Deferred income taxes and other | -151 | -169 |
Total net liability | -163 | -181 |
Amounts in accumulated other comprehensive income before income taxes | ' | ' |
Net loss | 38 | 53 |
Total | 38 | 53 |
Information for the defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets | ' | ' |
Projected benefit obligation | 163 | 181 |
Accumulated benefit obligation | $163 | $181 |
EMPLOYEE_RETIREMENT_PLANS_Deta2
EMPLOYEE RETIREMENT PLANS (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net periodic pension cost for the company's defined-benefit pension plans | ' | ' | ' |
Service cost | $31 | $36 | $34 |
Pre-tax net loss from accumulated other comprehensive income into net periodic pension cost | 13 | ' | ' |
Qualified | ' | ' | ' |
Net periodic pension cost for the company's defined-benefit pension plans | ' | ' | ' |
Service cost | 3 | 2 | 2 |
Interest cost | 44 | 46 | 47 |
Expected return on plan assets | -40 | -35 | -36 |
Recognized net loss | 16 | 14 | 10 |
Net periodic pension cost | 23 | 27 | 23 |
Non-Qualified | ' | ' | ' |
Net periodic pension cost for the company's defined-benefit pension plans | ' | ' | ' |
Interest cost | 6 | 7 | 8 |
Recognized net loss | 2 | 2 | 1 |
Net periodic pension cost | $8 | $9 | $9 |
EMPLOYEE_RETIREMENT_PLANS_Deta3
EMPLOYEE RETIREMENT PLANS (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Employee Retirement Plans | ' | ' |
Number of common stock shares included in plan assets | ' | 600,000 |
Value of common stock shares included in plan assets | ' | 10 |
Qualified | ' | ' |
Employee Retirement Plans | ' | ' |
Weighted average asset allocation (as a percent) | 100.00% | 100.00% |
Qualified | Equity securities | ' | ' |
Employee Retirement Plans | ' | ' |
Weighted average asset allocation (as a percent) | 47.00% | 44.00% |
Qualified | Debt securities | ' | ' |
Employee Retirement Plans | ' | ' |
Weighted average asset allocation (as a percent) | 35.00% | 41.00% |
Qualified | Other | ' | ' |
Employee Retirement Plans | ' | ' |
Weighted average asset allocation (as a percent) | 18.00% | 15.00% |
EMPLOYEE_RETIREMENT_PLANS_Deta4
EMPLOYEE RETIREMENT PLANS (Details 5) (Qualified, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | $659 | $594 | $504 |
Changes in the fair value of plan level 3 assets | ' | ' | ' |
Balance at the beginning of the period | 78 | 72 | ' |
Purchases | 25 | 9 | ' |
Sales | -14 | -8 | ' |
Unrealized gains (losses) | 4 | 5 | ' |
Balance at the end of the period | 93 | 78 | ' |
Level 1 | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 318 | 264 | ' |
Level 1 | United States | Common and Preferred Stocks | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 143 | 127 | ' |
Level 1 | United States | Corporate Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 15 | ' | ' |
Level 1 | United States | Government and Other Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 79 | 51 | ' |
Level 1 | United States | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 2 | 1 | ' |
Level 1 | International | Common and Preferred Stocks | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 46 | 61 | ' |
Level 1 | International | Government and Other Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 23 | 24 | ' |
Level 1 | International | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 10 | ' | ' |
Level 2 | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 248 | 252 | ' |
Level 2 | United States | Common and Preferred Stocks | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 107 | 61 | ' |
Level 2 | United States | Corporate Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 25 | 25 | ' |
Level 2 | United States | Government and Other Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 1 | 42 | ' |
Level 2 | United States | Common Collective Trust Fund | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 3 | 12 | ' |
Level 2 | United States | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 2 | ' | ' |
Level 2 | International | Common and Preferred Stocks | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 16 | 10 | ' |
Level 2 | International | Corporate Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 61 | 73 | ' |
Level 2 | International | Government and Other Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 27 | 29 | ' |
Level 2 | International | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 6 | ' | ' |
Level 3 | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 93 | 78 | ' |
Level 3 | United States | Private Equity and Hedge Funds | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 52 | 52 | ' |
Level 3 | International | Private Equity and Hedge Funds | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 24 | 11 | ' |
Level 3 | International | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 17 | 15 | ' |
Total | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 659 | 594 | ' |
Total | United States | Common and Preferred Stocks | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 250 | 188 | ' |
Total | United States | Private Equity and Hedge Funds | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 52 | 52 | ' |
Total | United States | Corporate Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 40 | 25 | ' |
Total | United States | Government and Other Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 80 | 93 | ' |
Total | United States | Common Collective Trust Fund | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 3 | 12 | ' |
Total | United States | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 4 | 1 | ' |
Total | International | Common and Preferred Stocks | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 62 | 71 | ' |
Total | International | Private Equity and Hedge Funds | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 24 | 11 | ' |
Total | International | Corporate Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 61 | 73 | ' |
Total | International | Government and Other Debt Securities | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | 50 | 53 | ' |
Total | International | Short-Term and other Investments | ' | ' | ' |
Employee Retirement Plans | ' | ' | ' |
Total Assets at Fair Value | $33 | $15 | ' |
EMPLOYEE_RETIREMENT_PLANS_Deta5
EMPLOYEE RETIREMENT PLANS (Details 6) | 12 Months Ended | 120 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equities | Fixed-income | Global assets | Alternative investments | Minimum | Minimum | Defined-benefit pension plans | Defined-benefit pension plans | Defined-benefit pension plans | Defined-benefit pension plans | Defined-benefit pension plans | Defined-benefit pension plans | Defined-benefit pension plans | |||||
Minimum | Minimum | Maximum | Maximum | ||||||||||||||
Employee Retirement Plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate for obligations (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.40% | 3.80% | 4.40% | 1.75% | 1.75% | 4.80% | 4.50% |
Expected return on plan assets (as a percent) | 7.25% | 7.25% | ' | ' | ' | ' | ' | ' | ' | ' | 7.25% | 7.25% | 7.25% | ' | ' | ' | ' |
Discount rate for net periodic pension cost (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.80% | 4.40% | 5.30% | ' | ' | ' | ' |
Liabilities having a discount rate for obligations (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 4.20% | 3.40% | ' | ' | ' | ' | ' | ' | ' |
Actual annual rate of return on pension plan assets (as a percent) | 13.60% | ' | 5.90% | 6.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period for actual annual rate of return on the Company's pension plan | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset allocation (as a percent) | ' | ' | ' | ' | 38.00% | 22.00% | 20.00% | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EMPLOYEE_RETIREMENT_PLANS_Deta6
EMPLOYEE RETIREMENT PLANS (Details 7) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Post-retirement benefit plans | Post-retirement benefit plans | Qualified defined-benefit pension plans | Foreign defined-benefit pension plans | Non-qualified (domestic) defined-benefit pension plans |
Employee Retirement Plans | ' | ' | ' | ' | ' |
Aggregate present value of unfunded accumulated post-retirement benefit obligation | $10 | $12 | ' | ' | ' |
Contribution to qualified defined-benefit pension plans | ' | ' | 45 | ' | ' |
Payments to participants of unfunded defined-benefit pension plans | ' | ' | $45 | $7 | $12 |
EMPLOYEE_RETIREMENT_PLANS_Deta7
EMPLOYEE RETIREMENT PLANS (Details 8) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Qualified Plans | ' |
Employee Retirement Plans | ' |
2014 | $45 |
2015 | 47 |
2016 | 48 |
2017 | 49 |
2018 | 50 |
2019-2023 | 273 |
Non-Qualified Plans | ' |
Employee Retirement Plans | ' |
2014 | 12 |
2015 | 12 |
2016 | 12 |
2017 | 12 |
2018 | 12 |
2019-2023 | $59 |
SHAREHOLDERS_EQUITY_Details
SHAREHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 31, 2007 |
SHAREHOLDERS' EQUITY | ' | ' | ' | ' |
Number of shares authorized to be repurchased for retirement | ' | ' | ' | 50,000,000 |
Remaining number of shares authorized to be repurchased | 22,600,000 | 24,300,000 | ' | ' |
Repurchase and retirement of common stock to offset the dilutive impact of long-term stock awards | 1,700,000 | 1,000,000 | 2,000,000 | ' |
Repurchase and retirement of common stock cash aggregate to offset the dilutive effect | $35 | $8 | $30 | ' |
Cash dividends per common share paid (in dollars per share) | $0.30 | $0.30 | $0.30 | ' |
Cash dividends per common share declared (in dollars per share) | $0.30 | $0.30 | $0.30 | ' |
Long-Term Stock Awards | ' | ' | ' | ' |
Stock awards | ' | ' | ' | ' |
Grant of long-term stock awards | 1,700,000 | 1,000,000 | 2,000,000 | ' |
SHAREHOLDERS_EQUITY_Details_2
SHAREHOLDERS' EQUITY (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
SHAREHOLDERS' EQUITY | ' | ' |
Cumulative translation adjustments | $418 | $501 |
Unrealized loss on marketable securities, net | -12 | -12 |
Unrealized loss on interest rate swaps | -19 | -21 |
Unrecognized prior service cost and net loss, net | -272 | -409 |
Accumulated other comprehensive income | 115 | 59 |
Income tax expense on unrealized loss on marketable securities | 14 | 14 |
Income tax benefit on prior service cost and net loss | $105 | $107 |
RECLASSIFICATIONS_FROM_OTHER_C2
RECLASSIFICATIONS FROM OTHER COMPREHENSIVE INCOME (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reclassifications from accumulated other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative expenses | ' | ' | ' | ' | ' | ' | ' | ' | $1,582 | $1,535 | $1,543 |
Tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 111 | 91 | -40 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 235 | 254 | 254 |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | -239 | -229 | -177 |
Net of tax | 45 | 103 | 77 | 47 | -87 | 15 | -75 | 33 | 272 | -114 | -575 |
Actuarial losses, net | Amount Reclassified | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications from accumulated other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Selling, general and administrative expenses | ' | ' | ' | ' | ' | ' | ' | ' | 18 | 16 | 11 |
Tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 2 | -9 | 5 |
Net of tax | ' | ' | ' | ' | ' | ' | ' | ' | 20 | 7 | 16 |
Interest rate swaps | Amount Reclassified | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications from accumulated other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 2 | ' |
Net of tax | ' | ' | ' | ' | ' | ' | ' | ' | $2 | $2 | ' |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | $1,998 | $2,150 | $2,149 | $1,876 | $1,831 | $1,913 | $1,945 | $1,806 | $8,173 | $7,495 | $7,170 |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 673 | 302 | -215 |
Assets | 6,933 | ' | ' | ' | 6,875 | ' | ' | ' | 6,933 | 6,875 | 7,297 |
Other income (expense), net | ' | ' | ' | ' | ' | ' | ' | ' | -239 | -229 | -177 |
Income (loss) from continuing operations before income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 434 | 73 | -392 |
Assets held for sale | ' | ' | ' | ' | 203 | ' | ' | ' | ' | 203 | 242 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 124 | 117 | 139 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 184 | 203 | 245 |
North America | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 6,634 | 6,046 | 5,669 |
International, principally Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,539 | 1,449 | 1,501 |
Cabinets and Related Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,014 | 939 | 934 |
Plumbing Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 3,183 | 2,955 | 2,913 |
Installation and Other Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,412 | 1,209 | 1,077 |
Decorative Architectural Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,927 | 1,818 | 1,670 |
Other Specialty Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | ' | ' | ' | ' | ' | ' | ' | ' | 637 | 574 | 576 |
Operating Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 807 | 497 | -88 |
Assets | 5,669 | ' | ' | ' | 5,659 | ' | ' | ' | 5,669 | 5,659 | 5,716 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 120 | 115 | 133 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 173 | 192 | 229 |
Operating Segments | Cabinets and Related Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | -10 | -89 | -126 |
Assets | 659 | ' | ' | ' | 700 | ' | ' | ' | 659 | 700 | 792 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 9 | 15 | 14 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 42 | 57 | 66 |
Operating Segments | Plumbing Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 394 | 307 | 322 |
Assets | 2,040 | ' | ' | ' | 2,012 | ' | ' | ' | 2,040 | 2,012 | 1,959 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 71 | 67 | 85 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 65 | 69 | 68 |
Operating Segments | Installation and Other Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 37 | -19 | -79 |
Assets | 1,465 | ' | ' | ' | 1,444 | ' | ' | ' | 1,465 | 1,444 | 1,427 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 14 | 11 | 9 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 27 | 30 | 32 |
Operating Segments | Decorative Architectural Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 351 | 329 | 196 |
Assets | 812 | ' | ' | ' | 799 | ' | ' | ' | 812 | 799 | 770 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 16 | 11 | 8 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 17 | 15 | 15 |
Operating Segments | Other Specialty Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 35 | -31 | -401 |
Assets | 693 | ' | ' | ' | 704 | ' | ' | ' | 693 | 704 | 768 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 10 | 11 | 17 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 22 | 21 | 48 |
Corporate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets | 1,264 | ' | ' | ' | 1,013 | ' | ' | ' | 1,264 | 1,013 | 1,339 |
General corporate expense, net | ' | ' | ' | ' | ' | ' | ' | ' | -134 | -126 | -118 |
Property Additions | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 2 | 6 |
Depreciation and Amortization | ' | ' | ' | ' | ' | ' | ' | ' | 11 | 11 | 16 |
Segment Reconciling Items | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charge for litigation settlements, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | -77 | -9 |
Gain from sales of fixed assets, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' |
Geographic Areas | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 807 | 497 | -88 |
Assets | 5,669 | ' | ' | ' | 5,659 | ' | ' | ' | 5,669 | 5,659 | 5,716 |
Geographic Areas | North America | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 649 | 360 | -259 |
Assets | 4,295 | ' | ' | ' | 4,363 | ' | ' | ' | 4,295 | 4,363 | 4,441 |
Geographic Areas | International, principally Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Profit (Loss) | ' | ' | ' | ' | ' | ' | ' | ' | 158 | 137 | 171 |
Assets | $1,374 | ' | ' | ' | $1,296 | ' | ' | ' | $1,374 | $1,296 | $1,275 |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Export sales from U.S. included in net sales | ' | ' | ' | ' | ' | ' | ' | ' | $227 | $229 | $241 |
Intra-company sales between segments in percentage | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 2.00% | 2.00% |
Net sales | 1,998 | 2,150 | 2,149 | 1,876 | 1,831 | 1,913 | 1,945 | 1,806 | 8,173 | 7,495 | 7,170 |
Impairment charges for goodwill and other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42 | 450 |
Impairment charges for other intangible assets | ' | ' | ' | ' | 42 | ' | ' | ' | ' | ' | ' |
US | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived assets | 2,685 | ' | ' | ' | 2,792 | ' | ' | ' | 2,685 | 2,792 | 2,962 |
Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-lived assets | 481 | ' | ' | ' | 467 | ' | ' | ' | 481 | 467 | 455 |
Plumbing Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 3,183 | 2,955 | 2,913 |
Impairment charges for goodwill and other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Decorative Architectural Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,927 | 1,818 | 1,670 |
Impairment charges for goodwill and other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75 |
Other Specialty Products | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 637 | 574 | 576 |
Impairment charges for goodwill and other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 374 |
Impairment charges for other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42 | ' |
Sales | US | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 6,359 | 5,793 | 5,394 |
Sales | Customer concentration risk | One customer | Cabinets and Related Products, Plumbing Products, Decorative Architectural Products and Other Specialty Products segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of major customers | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | 1 |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | $2,280 | $2,143 | $1,984 |
SEVERANCE_COSTS_Details
SEVERANCE COSTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
SEVERANCE COSTS | ' | ' | ' |
Severance and early retirement program costs | $20 | $35 | $15 |
OTHER_INCOME_EXPENSE_NET_Detai
OTHER INCOME (EXPENSE), NET (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OTHER INCOME (EXPENSE), NET | ' | ' | ' |
Income from cash and cash investments | $3 | $6 | $8 |
Other interest income | 2 | 1 | 1 |
Income from financial investments, net | 11 | 22 | 73 |
Other items, net | -20 | -4 | -5 |
Total other, net | -4 | 25 | 77 |
Currency translation expense related to sale of the ready-to-assemble cabinet business | 18 | ' | ' |
Currency losses included in other items, net | $18 | $2 | $5 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income (loss) from continuing operations before income taxes: | ' | ' | ' |
U.S. | $279 | ($84) | ($575) |
Foreign | 155 | 157 | 183 |
Income (loss) from continuing operations before income taxes | 434 | 73 | -392 |
Currently payable: | ' | ' | ' |
U.S. Federal | 3 | ' | ' |
State and local | 4 | -2 | -1 |
Foreign | 58 | 51 | 63 |
Deferred: | ' | ' | ' |
U.S. Federal | 41 | 31 | -103 |
State and local | 7 | 7 | ' |
Foreign | -2 | 4 | 1 |
Income tax (benefit) expense | 111 | 91 | -40 |
Deferred tax assets at December 31: | ' | ' | ' |
Receivables | 12 | 14 | ' |
Inventories | 23 | 24 | ' |
Other assets, principally stock-based compensation | 103 | 118 | ' |
Accrued liabilities | 157 | 156 | ' |
Long-term liabilities | 195 | 253 | ' |
Net operating loss carryforward | 317 | 400 | ' |
Tax credit carryforward | 38 | 25 | ' |
Total | 845 | 990 | ' |
Valuation allowance | -670 | -787 | ' |
Total | 175 | 203 | ' |
Deferred tax liabilities at December 31: | ' | ' | ' |
Property and equipment | 148 | 180 | ' |
Intangibles | 342 | 286 | ' |
Investment in foreign subsidiaries | 5 | 8 | ' |
Other | 4 | 9 | ' |
Total | 499 | 483 | ' |
Net deferred tax liability at December 31 | $324 | $280 | ' |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Federal | Federal | Federal | Federal | State and local | State and local | State and local | Prepaid expenses and other | Prepaid expenses and other | Deferred income taxes and other | Deferred income taxes and other | ||||
Forecast | ||||||||||||||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net short-term deferred tax assets included in prepaid expense and other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $73 | $41 | ' | ' |
Net long-term deferred tax liability included in deferred income taxes and other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 397 | 321 |
Tax benefit, reversal of accrual for uncertain tax positions, expiration of statutes of limitations and settlements on audits | ' | ' | ' | ' | ' | ' | ' | 8 | 14 | 10 | ' | ' | ' | ' |
Non-cash charge to deferred income tax expense due to change in deferred tax assets valuation allowance | ' | ' | ' | ' | ' | ' | ' | 13 | 26 | 31 | ' | ' | ' | ' |
Period of cumulative loss position | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in valuation allowance | ' | ' | ' | 372 | 65 | 89 | ' | ' | ' | ' | ' | ' | ' | ' |
Reversal of valuation allowance | ' | ' | ' | ' | ' | ' | 550 | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets, with no valuation allowance | 175 | 203 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175 | 203 |
Deferred tax assets related to net operating loss and tax credit carryforwards expiring between 2020 and 2032 for 2012 and between 2020 and 2033 for 2013 | 345 | 411 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets related to net operating loss and tax credit carryforwards with unlimited expiration period | 10 | 14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax asset not recognized, share based compensation | 53 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities on the undistributed earnings of certain foreign subsidiaries | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income taxes paid | $77 | $57 | $43 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
INCOME TAXES | ' | ' | ' |
U.S. Federal statutory tax rate-expense (benefit) (as a percent) | 35.00% | 35.00% | -35.00% |
State and local taxes, net of U.S. Federal tax benefit (as a percent) | 2.00% | 4.00% | ' |
Lower taxes on foreign earnings (as a percent) | ' | -9.00% | ' |
U.S. and foreign taxes on distributed and undistributed foreign earnings (as a percent) | ' | 1.00% | ' |
Goodwill and other intangible assets impairment charges providing no tax benefit (as a percent) | ' | 2.00% | 3.00% |
U.S. Federal valuation allowance (as a percent) | -11.00% | 89.00% | 24.00% |
Other, net (as a percent) | ' | 3.00% | -2.00% |
Effective tax rate - expense (benefit) (as a percent) | 26.00% | 125.00% | -10.00% |
INCOME_TAXES_Details_4
INCOME TAXES (Details 4) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ' |
Balance at the beginning of the period | $68 | $81 |
Current year tax positions: Additions | 9 | 6 |
Prior year tax positions: Additions | 1 | ' |
Prior year tax positions: Reductions | -2 | -4 |
Settlements with tax authorities | -1 | ' |
Lapse of applicable statute of limitations | -12 | -12 |
Interest and penalties recognized in income tax expense | -4 | -3 |
Balance at the end of the period | 59 | 68 |
Unrecognized tax benefits that would impact effective tax rate if recognized | 31 | 34 |
Reasonably possible reduction in the liability for uncertain tax positions | 1 | ' |
Deferred income taxes and other | ' | ' |
Reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ' |
Balance at the end of the period | 65 | 74 |
Accrued liabilities | ' | ' |
Reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ' |
Balance at the end of the period | 0 | 1 |
Other assets | ' | ' |
Reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ' |
Balance at the end of the period | 6 | 7 |
Uncertain Tax Positions | ' | ' |
Reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ' |
Balance at the beginning of the period | 51 | 61 |
Current year tax positions: Additions | 9 | 6 |
Prior year tax positions: Additions | 1 | ' |
Prior year tax positions: Reductions | -2 | -4 |
Settlements with tax authorities | -1 | ' |
Lapse of applicable statute of limitations | -12 | -12 |
Balance at the end of the period | 46 | 51 |
Interest and Penalties | ' | ' |
Reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties | ' | ' |
Balance at the beginning of the period | 17 | 20 |
Interest and penalties recognized in income tax expense | -4 | -3 |
Balance at the end of the period | $13 | $17 |
EARNINGS_PER_COMMON_SHARE_Deta
EARNINGS PER COMMON SHARE (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator (basic and diluted): | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income (loss) from continuing operations | $39 | $105 | $82 | $56 | ($70) | $26 | ($51) | $42 | $282 | ($53) | ($394) |
Less: Allocation to unvested restricted stock awards | ' | ' | ' | ' | ' | ' | ' | ' | -6 | -2 | -3 |
Income (loss) from continuing operations attributable to common shareholders | ' | ' | ' | ' | ' | ' | ' | ' | 276 | -55 | -397 |
Loss from discontinued operations, net | ' | ' | ' | ' | ' | ' | ' | ' | -10 | -61 | -181 |
Loss from discontinued operations attributable to common shareholders | ' | ' | ' | ' | ' | ' | ' | ' | -10 | -61 | -181 |
Net income (loss) available to common shareholders | ' | ' | ' | ' | ' | ' | ' | ' | $266 | ($116) | ($578) |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic common shares (based upon weighted average) (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 350 | 349 | 348 |
Add: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option dilution (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Diluted common shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 352 | 349 | 348 |
EARNINGS_PER_COMMON_SHARE_Deta1
EARNINGS PER COMMON SHARE (Details 2) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock options | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' |
Antidilutive effect on computation of diluted earnings per common share (in shares) | 12 | 30 | 36 |
Unvested stock awards | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' |
Antidilutive effect on computation of diluted earnings per common share (in shares) | 8 | 8 | ' |
OTHER_COMMITMENTS_AND_CONTINGE2
OTHER COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2012 |
In Millions, unless otherwise specified | Private equity funds, capital calls | Other Specialty Products |
Maximum | ||
Other Commitments and Contingencies | ' | ' |
Increase in expected future warranty claims | ' | $12 |
Company's obligation to make capital additional contributions | $14 | ' |
OTHER_COMMITMENTS_AND_CONTINGE3
OTHER COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in the company's warranty liability | ' | ' |
Balance at the beginning of the period | $118 | $102 |
Accruals for warranties issued during the year | 42 | 42 |
Accruals related to pre-existing warranties | 6 | 16 |
Settlements made (in cash or kind) during the year | -42 | -38 |
Other, net (including currency translation) | ' | -4 |
Balance at the end of the period | $124 | $118 |
INTERIM_FINANCIAL_INFORMATION_2
INTERIM FINANCIAL INFORMATION (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
INTERIM FINANCIAL INFORMATION (UNAUDITED) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $1,998 | $2,150 | $2,149 | $1,876 | $1,831 | $1,913 | $1,945 | $1,806 | $8,173 | $7,495 | $7,170 |
Gross profit | 531 | 607 | 609 | 508 | 451 | 500 | 521 | 484 | 2,255 | 1,956 | 1,787 |
(Loss) income from continuing operations | 39 | 105 | 82 | 56 | -70 | 26 | -51 | 42 | 282 | -53 | -394 |
Net (loss) income | $45 | $103 | $77 | $47 | ($87) | $15 | ($75) | $33 | $272 | ($114) | ($575) |
Basic: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) income from continuing operations (in dollars per share) | $0.11 | $0.29 | $0.23 | $0.16 | ($0.20) | $0.07 | ($0.15) | $0.12 | $0.79 | ($0.16) | ($1.14) |
Net (loss) income (in dollars per share) | $0.13 | $0.29 | $0.22 | $0.13 | ($0.25) | $0.04 | ($0.22) | $0.09 | $0.76 | ($0.33) | ($1.66) |
Diluted: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) income from continuing operations (in dollars per share) | $0.11 | $0.29 | $0.23 | $0.16 | ($0.20) | $0.07 | ($0.15) | $0.12 | $0.78 | ($0.16) | ($1.14) |
Net (loss) income (in dollars per share) | $0.12 | $0.29 | $0.21 | $0.13 | ($0.25) | $0.04 | ($0.22) | $0.09 | $0.76 | ($0.33) | ($1.66) |
INTERIM_FINANCIAL_INFORMATION_3
INTERIM FINANCIAL INFORMATION (UNAUDITED) (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
INTERIM FINANCIAL INFORMATION (UNAUDITED) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non cash impairment charges for other intangible assets, after tax | ' | ' | ' | $27 | ' | ' | ' | ' | ' |
Non cash impairment charges for other intangible assets, pre-tax | ' | ' | ' | 42 | ' | ' | ' | ' | ' |
Gains from financial investments, after tax | 2 | 3 | 2 | 3 | 1 | ' | 10 | ' | ' |
Gains from financial investments, pre-tax | 3 | 5 | 3 | 4 | 2 | ' | 16 | ' | ' |
After-tax charge (income) from litigation settlements | ' | ' | ' | 2 | ' | 75 | -1 | ' | ' |
Income from litigation settlements, before tax | ' | ' | ' | $3 | $1 | $75 | ($2) | $77 | $9 |
VALUATION_AND_QUALIFYING_ACCOU1
VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowances for doubtful accounts, deducted from accounts receivable | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | $31 | $29 | $34 |
Additions, Charged to Costs and Expenses | 8 | 13 | 12 |
Deductions | -12 | -11 | -17 |
Balance at End of Period | 27 | 31 | 29 |
Valuation Allowance on deferred tax assets | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | 787 | 688 | 462 |
Additions, Charged to Costs and Expenses | -30 | 113 | 178 |
Additions, Charged to Other Accounts | -87 | -14 | 48 |
Balance at End of Period | $670 | $787 | $688 |