Masco (MAS) 10-Q 27 Oct 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2015shares
Document and Entity Information [Abstract]
Entity Registrant Name	MASCO CORP /DE/
Entity Central Index Key	62,996
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	336,472,115
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash investments	$ 1,279	$ 1,379
Short-term bank deposits	255	306
Receivables	1,006	820
Deferred income taxes	177	206
Prepaid expenses and other	74	68
Assets held for sale		373
Inventories:
Finished goods	392	361
Raw material	258	251
Work in process	99	100
Total	749	712
Total current assets	3,540	3,864
Property and equipment, net	1,025	1,046
Goodwill	843	840
Other intangible assets, net	163	142
Other assets	156	200
Assets held for sale		1,141
Total Assets	5,727	7,233
Current Liabilities:
Notes payable	6	505
Accounts payable	827	721
Accrued liabilities	727	685
Liabilities held for sale		300
Total current liabilities	1,560	2,211
Long-term debt	3,418	2,919
Other liabilities	721	768
Liabilities held for sale		207
Total Liabilities	$ 5,699	$ 6,105
Commitments and contingencies
Masco Corporation's shareholders' equity:
Common shares, par value $1 per share; Authorized shares: 1,400,000,000; issued and outstanding: 2015- 331,900,000; 2014 - 345,000,000	$ 332	$ 345
Preferred shares authorized: 1,000,000; issued and outstanding: 2015 - None; 2014 - None
Retained (deficit) earnings	$ (332)	$ 690
Accumulated other comprehensive loss	(159)	(111)
Total Masco Corporation's shareholders' (deficit) equity	(159)	924
Noncontrolling interest	187	204
Total equity	28	1,128
Total liabilities and equity	$ 5,727	$ 7,233

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
CONDENSED CONSOLIDATED BALANCE SHEETS
Common share, par value (in dollars per share)	$ 1	$ 1
Common shares, shares authorized	1,400,000,000	1,400,000,000
Common shares, shares issued	331,900,000	345,000,000
Common shares, shares outstanding	331,900,000	345,000,000
Preferred shares, shares authorized	1,000,000	1,000,000
Preferred shares, shares issued	0	0
Preferred shares, shares outstanding	0	0

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 1,839	$ 1,834	$ 5,427	$ 5,340
Cost of sales	1,250	1,312	3,706	3,761
Gross profit	589	522	1,721	1,579
Selling, general and administrative expenses	331	341	1,019	1,024
Operating profit	258	181	702	555
Other income (expense), net:
Interest expense	(54)	(57)	(171)	(169)
Other, net	(6)	7	(2)	10
Total other income (expense), net	(60)	(50)	(173)	(159)
Income from continuing operations before income taxes	198	131	529	396
Income tax (expense) benefit	(77)	415	(219)	377
Income from continuing operations	121	546	310	773
Income (loss) from discontinued operations, net		10	(1)	21
Net income	121	556	309	794
Less: Net income attributable to noncontrolling interest	10	13	29	38
Net income attributable to Masco Corporation	$ 111	$ 543	$ 280	$ 756
Basic:
Income from continuing operations (in dollars per share)	$ 0.33	$ 1.49	$ 0.81	$ 2.06
Income (loss) from discontinued operations, net (in dollars per share)		0.03		0.06
Net income (in dollars per share)	0.33	1.52	0.81	2.12
Diluted:
Income from continuing operations (in dollars per share)	0.32	1.48	0.81	2.04
Income (loss) from discontinued operations, net (in dollars per share)		0.03		0.06
Net income (in dollars per share)	$ 0.32	$ 1.51	$ 0.80	$ 2.10
Amounts attributable to Masco Corporation:
Income from continuing operations	$ 111	$ 533	$ 281	$ 735
Income (loss) from discontinued operations, net		10	(1)	21
Net income attributable to Masco Corporation	$ 111	$ 543	$ 280	$ 756

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Net income	$ 121	$ 556	$ 309	$ 794
Less: Net income attributable to noncontrolling interest	10	13	29	38
Net income attributable to Masco Corporation	111	543	280	756
Other comprehensive income (loss), net of tax (see Note L)
Cumulative translation adjustment	(17)	(73)	(70)	(79)
Interest rate swaps			1	1
Amortization of pension prior service cost and net loss	4		11	6
Other comprehensive income (loss)	(13)	(73)	(58)	(72)
Less: Other comprehensive income (loss) attributable to noncontrolling interest	(1)	(18)	(10)	(21)
Other comprehensive income (loss) attributable to Masco Corporation	(12)	(55)	(48)	(51)
Total comprehensive income (loss)	108	483	251	722
Less: Total comprehensive income (loss) attributable to the noncontrolling interest	9	(5)	19	17
Total comprehensive income (loss) attributable to Masco Corporation	$ 99	$ 488	$ 232	$ 705

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Cash provided by operations	$ 581	$ 543
Increase in receivables	(245)	(257)
Increase in inventories	(41)	(109)
Increase in accounts payable and accrued liabilities, net	127	129
Net cash from operating activities	422	306
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
Retirement of notes	(500)
Purchase of Company common stock	(407)	(39)
Cash dividends paid	(94)	(86)
Dividend payment to noncontrolling interest	(36)	(34)
Cash distributed to TopBuild Corp.	(63)
Issuance of TopBuild Corp. debt	200
Issuance of notes, net of issuance costs	497
Increase in debt	2
Issuance of Company common stock	2	1
Tax benefit from stock-based compensation	32
Payment of debt	(3)	(2)
Credit Agreement and other financing costs	(3)
Net cash for financing activities	(373)	(160)
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
Capital expenditures	(112)	(82)
Acquisition of companies, net of cash acquired	(41)	(2)
Proceeds from disposition of:
Short-term bank deposits	251	322
Other financial investments	7	13
Property and equipment	13	12
Purchases of:
Short-term bank deposits	(225)	(297)
Other, net	(37)	(26)
Net cash for investing activities	(144)	(60)
Effect of exchange rate changes on cash and cash investments	(9)	(27)
CASH AND CASH INVESTMENTS:
(Decrease) increase for the period	(104)	59
At January 1	1,383	1,223
At September 30	$ 1,279	$ 1,282

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions	Common Shares ($1 par value)	Paid-In Capital	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interest	Total
Balance at Dec. 31, 2013	$ 349	$ 16	$ 79	$ 115	$ 228	$ 787
Increase (Decrease) in Stockholders' Equity
Total comprehensive income (loss)			756	(51)	17	722
Shares issued	3	(8)				(5)
Shares retired:
Repurchased	(2)	(9)	(28)			(39)
Surrendered (non-cash)		(15)				(15)
Cash dividends declared			(91)			(91)
Dividend payment to noncontrolling interest					(34)	(34)
Stock-based compensation		33				33
Balance at Sep. 30, 2014	350	17	716	64	211	1,358
Balance at Dec. 31, 2014	345		690	(111)	204	1,128
Increase (Decrease) in Stockholders' Equity
Total comprehensive income (loss)			280	(48)	19	251
Shares issued	3	(12)				(9)
Shares retired:
Repurchased	(15)	(29)	(363)			(407)
Surrendered (non-cash)	(1)		(17)			(18)
Cash dividends declared			(94)			(94)
Dividend payment to noncontrolling interest					(36)	(36)
Separation of TopBuild Corp.			(828)			(828)
Stock-based compensation		$ 41				41
Balance at Sep. 30, 2015	$ 332		$ (332)	$ (159)	$ 187	$ 28

Accounting Policies

Accounting Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies
Accounting Policies	A. ACCOUNTING POLICIES In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to present fairly our financial position as at September 30, 2015, our results of operations and comprehensive income (loss) for the three months and nine months ended September 30, 2015 and 2014 and cash flows and changes in shareholders’ equity for the nine months ended September 30, 2015 and 2014. The condensed consolidated balance sheet at December 31, 2014 was derived from audited financial statements. Reclassification: Certain prior year amounts have been reclassified to conform to the 2015 presentation in the condensed consolidated financial statements. In our condensed consolidated statements of cash flows, the cash flows from discontinued operations are not separately stated. Recently Issued Accounting Pronouncements : In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard for revenue recognition, Accounting Standards Codification 606 (“ASC 606”). The purpose of ASC 606 is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability across industries. ASC 606 is effective for us for annual periods beginning January 1, 2018. We are currently evaluating the impact the adoption of this new standard will have on our results of operations. In April 2014, the FASB issued Accounting Standards Update 2014-08 (“ASU 2014-08”) “Reporting of Discontinued Operations and Disclosure of Disposals of Components of an Entity,” which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. On January 1, 2015, we adopted ASU 2014-08. The adoption of the new standard did not have an impact on our financial position or results of operations. In February 2015, the FASB issued Accounting Standards Update 2015-02 (“ASU 2015-02”) “Consolidation (Topic 810) — Amendments to the Consolidations Analysis,” which modifies certain aspects of both the variable interest and voting models. ASU 2015-02 is effective for us for annual periods beginning January 1, 2016. We are currently evaluating the impact the adoption of this new standard will have on our financial position or results of operations. In April 2015, the FASB issued Accounting Standards Update 2015-03 (“ASU 2015-03”) “Interest — Imputation of Interest (Subtopic 835-30) — Simplifying the Presentation of Debt Issuance Costs,” that requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB amended ASU 2015-03 to clarify that debt issuance costs related to line-of-credit arrangements may be classified as an asset. ASU 2015-03 is effective for us for annual periods beginning January 1, 2016. We do not expect that the adoption of the new standard will have a material impact on our financial position.

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 30, 2015
Discontinued Operations
Discontinued Operations	B. DISCONTINUED OPERATIONS The presentation of discontinued operations includes a component or group of components that we have or intend to dispose of, and represents a strategic shift that has (or will have) a major effect on our operations and financial results. For spin off transactions, discontinued operations treatment is appropriate following the completion of the spin off. On September 30, 2014, we announced a plan to spin off 100 percent of our Installation and Other Services businesses into an independent, publicly-traded company named TopBuild Corp. (“TopBuild”) through a tax-free distribution of the stock of TopBuild to our stockholders. We initiated the spin off as TopBuild was no longer considered core to our long-term growth strategy in branded building products. On June 30, 2015, immediately prior to the effective time of the spin off, TopBuild paid a cash distribution to us of $200 million using the proceeds of its new debt financing arrangement. This transaction was reported as a financing activity in the condensed consolidated statements of cash flows. We have accounted for the spin off of TopBuild as a discontinued operation. (Losses) gains from this discontinued operation were included in income (loss) from discontinued operations, net, in the condensed consolidated statements of operations. The major classes of line items constituting pre-tax (loss) profit of discontinued operations, in millions: Three Months Ended Nine Months Ended September 30 September 30 2015 2014 2015 2014 Net sales $ — $ $ $ Cost of sales — Gross profit — Selling, general and administrative expenses — Income from discontinued operations $ — $ $ $ (Loss) gain on disposal of discontinued operations, net (1) ) ) ) (Loss) income before income tax ) Income tax benefit (expense) (2) ) ) ) Income (loss) from discontinued operations, net $ — $ $ ) $ (1) Included in (loss) gain on disposal of discontinued operations, net in 2014 are additional costs and charges related to the 2013 sale of Tvilum. (2) The unusual relationship between income tax expense and income before income tax for the nine months ended September 30, 2015 resulted primarily from certain non-deductible transaction costs related to the spin off of TopBuild. The carrying amount of major classes of assets and liabilities included as part of the TopBuild discontinued operations, in millions: December 31, 2014 Cash $ Receivables Inventories Deferred income taxes Prepaid expenses and other Property and equipment, net Goodwill Other intangible assets, net Other assets Total assets classified as held for sale $ Accounts payable $ Accrued liabilities Other liabilities Deferred income taxes Total liabilities classified as held for sale $ Other selected financial information for TopBuild during the period owned by us, were as follows, in millions: Nine Months Ended Sep. 30, Sep. 30, 2015 2014 Depreciation and amortization $ $ Capital expenditures $ $ In conjunction with the spin off, we have entered into a Transition Services Agreement with TopBuild to provide TopBuild administrative services subsequent to the separation. The fees for services rendered under the Transition Services Agreement are not expected to be material to our results of operations.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 30, 2015
Acquisitions
Acquisitions	C. ACQUISITIONS In the second quarter of 2015, we acquired a U.K. window business for approximately $16 million in cash in the Other Specialty Products segment. This acquisition will support our U.K. window business’ growth strategy by expanding its product offerings into timber-alternative windows and doors. In the first quarter of 2015, we acquired an aquatic fitness business for approximately $25 million in cash in the Plumbing Products segment. This acquisition will allow our spa business to expand its wellness products platform, open new channels of distribution and access a new customer base. These acquisitions are not material to us. The results of these acquisitions are included in the condensed consolidated financial statements from the date of their respective acquisition.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2015
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	D. GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the nine months ended September 30, 2015, by segment, were as follows, in millions: Gross Goodwill Accumulated Net Goodwill At Impairment At Sep. 30, 2015 Losses Sep. 30, 2015 Cabinets and Related Products $ $ ) $ Plumbing Products ) Decorative Architectural Products ) Other Specialty Products ) Total $ $ ) $ Gross Goodwill Accumulated Net Goodwill Net Goodwill At Impairment At At Dec. 31, 2014 Losses Dec. 31, 2014 Acquisitions Other(A) Sep. 30, 2015 Cabinets and Related Products $ $ ) $ $ — $ — $ Plumbing Products ) ) Decorative Architectural Products ) — — Other Specialty Products ) — Total $ $ ) $ $ $ ) $ (A) Other principally includes the effect of foreign currency translation. Other indefinite-lived intangible assets were $137 million and $130 million at September 30, 2015 and December 31, 2014, respectively, and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $26 million (net of accumulated amortization of $49 million) at September 30, 2015 and $12 million (net of accumulated amortization of $48 million) at December 31, 2014, and principally included customer relationships. As a result of our 2015 acquisitions, other indefinite-lived intangible assets and definite-lived intangible assets increased by $7 million and $17 million, respectively, as of the acquisition dates.

Depreciation and Amortization

Depreciation and Amortization	9 Months Ended
	Sep. 30, 2015
Depreciation and Amortization
Depreciation and Amortization	E. DEPRECIATION AND AMORTIZATION Depreciation and amortization expense, including discontinued operations, was $100 million and $125 million for the nine months ended September 30, 2015 and 2014, respectively. Depreciation and amortization expense included accelerated depreciation (relating to business rationalization initiatives) of $1 million for the nine months ended September 30, 2014. As a result of business rationalization initiatives, at September 30, 2014, we decided to sell two facilities within our Cabinets and Related Products segment. At September 30, 2014, the net book value of those facilities was approximately $10 million. In the third quarter of 2014, we recorded a charge of $28 million, included in cost of goods sold in the condensed consolidated statement of operations, to reflect the estimated fair value of those facilities. Fair value was estimated using a market approach (Level 3 input), considering the estimated fair values for other comparable facilities in the areas where the facilities are located.

Fair Value of Financial Investm

Fair Value of Financial Investments	9 Months Ended
	Sep. 30, 2015
Fair Value of Financial Investments
Fair Value of Financial Investments	F. FAIR VALUE OF FINANCIAL INVESTMENTS We have maintained investments in available-for-sale securities, equity method investments and a number of private equity funds, principally as part of our 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: September 30, December 31, 2015 2014 Auction rate securities $ $ Total recurring investments Equity method investments Private equity funds Other investments Total $ $ Recurring Fair Value Measurements. The fair value of the auction rate securities held by us 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 the assumptions for credit defaults, since the auction rate securities are backed by credit default swap agreements. Our investments in auction rate 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 September 30, 2015 and December 31, 2014. Non-Recurring Fair Value Measurements. During the three months and nine months ended September 30, 2015 and 2014, we did not measure any financial investments at fair value on a non-recurring basis, as there was no other-than-temporary decline in the estimated value of these investments. We did not have any transfers between Level 1 and Level 2 financial assets in the nine months ended September 30, 2015 or 2014. Realized Gains (Losses). Income from financial investments, net, included in other, net, within other income (expense), net, was as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Realized gains from private equity funds $ $ — $ $ Equity investment income (loss), net — — ) Total income from financial investments, net $ $ — $ $ Fair Value of Debt. The fair value of our 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 us for debt with similar terms and remaining maturities. The aggregate estimated market value of short-term and long-term debt at September 30, 2015 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, 2014 was approximately $3.7 billion, compared with the aggregate carrying value of $3.4 billion.

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities	9 Months Ended
	Sep. 30, 2015
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities	G. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to global market risk as part of our normal daily business activities. To manage these risks, we enter into various derivative contracts. These contracts include interest rate swap agreements, foreign currency contracts and metals contracts intended to hedge our exposure to copper and zinc. We review our 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, we terminated the interest rate swap hedge relationships that we 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 our 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. Foreign Currency Contracts. Our 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, we, including certain of our 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 our condensed consolidated statements of operations in other, net within other income (expense), net. In the event that the counterparties fail to meet the terms of the foreign currency forward contracts, our exposure is limited to the aggregate foreign currency rate differential with such institutions. Metals Contracts. We have entered into several contracts to manage our exposure to increases in the price of copper and zinc. Gains (losses) related to these contracts are recorded in our condensed consolidated statements of operations in cost of sales. The pre-tax (losses) gains included in our condensed consolidated statements of operations are as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Foreign currency contracts Exchange contracts $ — $ $ $ Forward contracts ) — Metal contracts ) — ) — Interest rate swaps — — ) ) Total (loss) gain $ ) $ $ ) $ We present our derivatives, net by counterparty due to the right of offset under master netting arrangements in the condensed consolidated balance sheets. The notional amounts being hedged and the fair value of those derivative instruments are as follows, in millions: At September 30, 2015 Notional Amount Balance Sheet Foreign currency contracts Exchange contracts $ Receivables $ Forward contracts Accrued liabilities ) Metals contracts Accrued liabilities ) Other liabilities ) At December 31, 2014 Notional Amount Balance Sheet Foreign currency contracts Exchange contracts $ Receivables $ Forward contracts Other assets Accrued liabilities ) Metals contracts Accrued liabilities ) The fair value of all foreign currency and metals derivative contracts is estimated on a recurring basis, quarterly, using Level 2 inputs (significant other observable inputs).

Warranty Liability

Warranty Liability	9 Months Ended
	Sep. 30, 2015
Warranty Liability
Warranty Liability	H. WARRANTY LIABILITY Changes in our warranty liability were as follows, in millions: Nine Months Ended Twelve Months Ended September 30, 2015 December 31, 2014 Balance at January 1 $ $ Accruals for warranties issued during the period Accruals related to pre-existing warranties Settlements made (in cash or kind) during the period ) ) Other, net (including currency translation) ) ) Balance at end of period $ $

Debt

Debt	9 Months Ended
	Sep. 30, 2015
Debt
Debt	I. DEBT On June 15, 2015, we repaid and retired all of our $500 million, 4.8% Notes on the scheduled retirement date. On March 24, 2015, we issued $500 million of 4.45% Notes due April 1, 2025. These Notes are senior indebtedness and are redeemable at our option. On March 28, 2013, we 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. On May 29, 2015 and August 28, 2015, we amended the Credit Agreement with the bank group (the “Amended Credit Agreement”). The Amended Credit Agreement reduces the aggregate commitment to $750 million and extends the maturity date to May 29, 2020. Under the Amended Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $375 million with the current bank group or new lenders. The Amended Credit Agreement provides for an unsecured revolving credit facility available to us and one of our 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. We can also borrow swingline loans up to $75 million and obtain letters of credit of up to $100 million; any outstanding letters of credit under the Amended Credit Agreement reduce our borrowing capacity. At September 30, 2015, we had $42 million of outstanding standby letters of credit. Revolving credit loans bear interest under the Amended Credit Agreement, at our 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 our then-applicable corporate credit ratings; or (B) LIBOR plus an applicable margin based upon our then-applicable corporate credit ratings. The foreign currency revolving credit loans bear interest at a rate equal to LIBOR plus an applicable margin based upon our then-applicable corporate credit ratings. The Amended Credit Agreement contains financial covenants requiring us to maintain (A) a maximum net leverage ratio, as adjusted for certain items, of 4.0 to 1.0, and (B) a minimum interest coverage ratio, as adjusted for certain items, equal to or greater than 2.5 to 1.0. In order for us to borrow under the Amended Credit Agreement, there must not be any default in our covenants in the Amended 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 our representations and warranties in the Amended 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, 2014, in each case, no material ERISA or environmental non-compliance, and no material tax deficiency). We were in compliance with all covenants and no borrowings have been made at September 30, 2015.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2015
Stock-Based Compensation
Stock-Based Compensation	J. STOCK-BASED COMPENSATION Our 2014 Long Term Stock Incentive Plan (the “2014 Plan”) provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At September 30, 2015, outstanding stock-based incentives were in the form of long-term stock awards, stock options, phantom stock awards and stock appreciation rights. Pre-tax compensation expense and the related income tax benefit for these stock-based incentives were as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Long-term stock awards $ $ $ $ Stock options Phantom stock awards and stock appreciation rights — Total $ $ $ $ Income tax benefit (37 percent tax rate – before valuation allowance) $ $ $ $ Long-Term Stock Awards. Long-term stock awards are granted to our key employees and non-employee Directors and do not cause net share dilution inasmuch as we continue the practice of repurchasing and retiring an equal number of shares in the open market. We granted 719,546 shares of long-term stock awards in the nine months ended September 30, 2015. Our long-term stock award activity was as follows, shares in millions: Nine Months Ended September 30, 2015 2014 Unvested stock award shares at January 1 Weighted average grant date fair value $ $ Stock award shares granted Weighted average grant date fair value $ $ Stock award shares vested Weighted average grant date fair value $ $ Stock award shares forfeited — Weighted average grant date fair value $ $ Forfeitures upon spin off (A) — Weighted average grant date fair value $ $ — Modification upon spin off (B) — Unvested stock award shares at September 30 Weighted average grant date fair value $ $ (A) In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. (B) Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee directors such that all individuals received an equivalent fair value both before and after the separation. The modification to the outstanding stock awards was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan. At September 30, 2015 and 2014, there was $47 million and $68 million of total unrecognized compensation expense related to unvested stock awards, respectively; such awards had a weighted average remaining vesting period of three years in both 2015 and 2014. The total market value (at the vesting date) of stock award shares which vested during the nine months ended September 30, 2015 and 2014 was $54 million and $50 million, respectively. Stock Options. Stock options are granted to our key employees. The exercise price equals the market price of our 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. We granted 452,380 of stock option shares in the nine months ended September 30, 2015 with a grant date exercise price approximating $26 per share. In the first nine months of 2015, 3,150,790 stock option shares were forfeited (including options that expired unexercised). Our stock option activity was as follows, shares in millions: Nine Months Ended September 30, 2015 2014 Option shares outstanding, January 1 Weighted average exercise price $ $ Option shares granted — — Weighted average exercise price $ $ Option shares exercised Aggregate intrinsic value on date of exercise (A) $ 32 million $ 17 million Weighted average exercise price $ $ Option shares forfeited Weighted average exercise price $ $ Forfeitures upon spin off (B) — — Weighted average exercise price $ $ — Modification upon spin off (C) — Option shares outstanding, September 30 Weighted average exercise price $ $ Weighted average remaining option term (in years) Option shares vested and expected to vest, September 30 Weighted average exercise price $ $ Aggregate intrinsic value (A) $ 111 million $ 102 million Weighted average remaining option term (in years) Option shares exercisable (vested), September 30 Weighted average exercise price $ $ Aggregate intrinsic value (A) $ 96 million $ 80 million Weighted average remaining option term (in years) (A) Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares. (B) In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. (C) Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee directors such that all individuals received an equivalent fair value both before and after the separation. The modification to the outstanding options was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan. At September 30, 2015 and 2014, there were $6 million and $7 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 2 years at both September 30, 2015 and 2014. 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: Nine Months Ended September 30, 2015 2014 Weighted average grant date fair value $ $ Risk-free interest rate % % Dividend yield % % Volatility factor % % Expected option life 6 years 6 years

Employee Retirement Plans

Employee Retirement Plans	9 Months Ended
	Sep. 30, 2015
Employee Retirement Plans
Employee Retirement Plans	K. EMPLOYEE RETIREMENT PLANS Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: Three Months Ended September 30, 2015 2014 Qualified Non-Qualified Qualified Non-Qualified Service cost $ — $ — $ $ — Interest cost Expected return on plan assets ) — ) — Amortization of net loss Net periodic pension cost $ $ $ $ Nine Months Ended September 30, 2015 2014 Qualified Non-Qualified Qualified Non-Qualified Service cost $ $ — $ $ — Interest cost Expected return on plan assets ) — ) — Amortization of net loss Net periodic pension cost $ $ $ $ We participate in one regional multi-employer pension plan, principally related to one of our manufacturing companies; the plan is not considered significant to us. Effective January 1, 2010, we froze all future benefit accruals under substantially all of our domestic qualified and non-qualified defined benefit pension plans. Future benefit accruals related to our foreign non-qualified plans were frozen several years ago.

Reclassifications From Accumula

Reclassifications From Accumulated Other Comprehensive (Loss) Income	9 Months Ended
	Sep. 30, 2015
Reclassifications From Accumulated Other Comprehensive (Loss) Income
Reclassifications From Accumulated Other Comprehensive (Loss) Income	L. RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The reclassifications from accumulated other comprehensive (loss) income to the condensed consolidated statements of operations were as follows, in millions: Amount Reclassified Accumulated Other Three Months Nine Months Comprehensive Ended Sep. 30, Ended Sep. 30, Statement of (Loss) Income 2015 2014 2015 2014 Operations Line Item Amortization of defined benefit pension: Actuarial losses, net $ $ $ $ Selling, general & administrative expenses Tax (benefit) ) ) ) ) Net of tax $ $ — $ $ Interest rate swaps $ — $ — $ $ Interest expense Tax (benefit) expense — — — — Net of tax $ — $ — $ $

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2015
Segment Information
Segment Information	M. SEGMENT INFORMATION Information by segment and geographic area was as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 2015 2014 2015 2014 Net Sales(A) Operating Profit (Loss) Net Sales(A) Operating Profit (Loss) Our operations by segment were: Cabinets and Related Products $ $ $ $ ) $ $ $ $ ) Plumbing Products Decorative Architectural Products Other Specialty Products Total $ $ $ $ $ $ $ $ Our operations by geographic area were: North America $ $ $ $ $ $ $ $ International, principally Europe Total $ $ $ $ General corporate expense, net ) ) ) ) Operating profit Other income (expense), net ) ) ) ) Income from continuing operations before income taxes $ $ $ $ (A) Inter-segment sales were not material.

Severance Costs

Severance Costs	9 Months Ended
	Sep. 30, 2015
Severance Costs
Severance Costs	N. SEVERANCE COSTS We recorded charges related to severance of $1 million and $8 million for the three and nine months ended September 30, 2015, respectively, and $13 million and $23 million for the three and nine months ended September 30, 2014, respectively. Such charges are principally reflected in the condensed consolidated statements of operations in selling, general and administrative expenses. For the three months and nine months ended September 30, 2014, we recorded $13 million and $20 million, respectively, of severance costs related to corporate office actions, which are included in general corporate expense, net.

Other Income (Expense), Net

Other Income (Expense), Net	9 Months Ended
	Sep. 30, 2015
Other Income (Expense), Net
Other Income (Expense), Net	O. OTHER INCOME (EXPENSE), NET Other, net, which is included in other income (expense), net, was as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Income from cash and cash investments $ $ $ $ Income from financial investments, net (Note F) — Foreign currency transaction (losses) gains ) ) Other items, net — Total other, net $ ) $ $ ) $

Earnings Per Common Share

Earnings Per Common Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Common Share
Earnings Per Common Share	P. EARNINGS PER COMMON SHARE Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Numerator (basic and diluted): Income from continuing operations $ $ $ $ Less: Allocation to unvested restricted stock awards Income from continuing operations attributable to common shareholders Income (loss) from discontinued operations, net — ) Less: Allocation to unvested restricted stock awards — — — — Income (loss) from discontinued operations attributable to common shareholders — ) Net income available to common shareholders $ $ $ $ Denominator: Basic common shares (based upon weighted average) Add: Stock option dilution Diluted common shares For the three months and nine months ended September 30, 2015 and 2014, we allocated dividends and undistributed earnings to the unvested restricted stock awards. Additionally, 4 million and 6 million common shares for the three months and nine months ended September 30, 2015, respectively, and 8 million common shares for both the three months and nine months ended September 30, 2014 related to stock options were excluded from the computation of diluted earnings per common share due to their antidilutive effect. In the first nine months of 2015, we repurchased and retired 15.5 million shares of our common stock (including 720 thousand shares to offset the dilutive impact of long-term stock awards granted in the first quarter), for approximately $407 million. As part of the repurchases, in August 2015, we agreed to repurchase a total of $200 million of common stock with an immediate delivery of 6.1 million shares under an accelerated stock repurchase transaction. In September 2015, upon completion of the transaction, we received an additional 1.5 million shares of our common stock resulting from changes in the volume weighted average stock price of our common stock over the term of the transaction. At September 30, 2015, we had 29.5 million shares of our common stock remaining under the September 2014 Board of Directors’ repurchase authorization. On the basis of amounts paid (declared), cash dividends per common share were $.090 ($.095) and $.270 ($.275) for the three months and nine months ended September 30, 2015, respectively, and $.090 ($.090) and $.240 ($.255) for the three months and nine months ended September 30, 2014, respectively.

Other Commitments and Contingen

Other Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Other Commitment and Contingencies
Other Commitments and Contingencies	Q. OTHER COMMITMENTS AND CONTINGENCIES 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, anti-trust and other matters, including class actions. We believe we have adequate defenses in these matters and that the likelihood that the outcome of these matters would have a material adverse effect on us is remote. 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.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes
Income Taxes	R. INCOME TAXES Our effective tax rate was 39 percent and 41 percent for the three months and nine months ended September 30, 2015, respectively. The tax expense for the nine months ended September 30, 2015 includes an $18 million valuation allowance against the deferred tax assets of TopBuild recorded as a non-cash charge to income tax expense in the second quarter of 2015. The TopBuild deferred tax assets have been impaired by our decision to spin off TopBuild into a separate company that on a stand-alone basis as of June 30, 2015, the spin off date, will unlikely be able to realize the value of such deferred tax assets as a result of its history of losses. In the third quarter of 2014, we recorded a $517 million tax benefit from the release of the valuation allowance against our U.S. Federal and certain state deferred tax assets due primarily to a return to sustainable profitability in our U.S. operations. In reaching this conclusion, we considered the continued improvement in both the new home construction market and repair and remodel activity in the U.S. and our progress on strategic initiatives to reduce costs and expand our product leadership positions, which contributed to the continued improvement in our U.S. operations over the past few years. Additionally, we anticipate the availability of future taxable income and have achieved a cumulative three-year income position in the U.S. as of December 31, 2014. Excluding the $517 million valuation allowance release, our effective tax rate was 78 percent and 35 percent for the three months and nine months ended September 30, 2014, respectively. As a result of the reversal of the valuation allowance in the third quarter of 2014, the tax expense for the nine months ended September 30, 2014 approximates our U.S. Federal statutory tax rate while the tax expense for the three months ended September 30, 2014 includes an additional tax expense of $47 million to adjust the taxes recorded in the first and second quarter of 2014, which previously benefited from the decrease in the valuation allowance, to the higher third quarter effective tax rate. The tax benefit from certain stock-based compensation is not realized as a deferred tax asset until the tax deduction reduces taxes paid. During the third quarter of 2015, we realized $17 million of the $53 million deferred tax asset on additional net operating losses from stock-based compensation as an increase to paid-in capital due to the continued profitability of our U.S. operations. We anticipate realizing the majority of the remaining $36 million deferred tax asset on additional net operating losses from stock-based compensation by the end of 2015.

Accounting Policies (Policies)

Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies
Reclassification	Reclassification: Certain prior year amounts have been reclassified to conform to the 2015 presentation in the condensed consolidated financial statements. In our condensed consolidated statements of cash flows, the cash flows from discontinued operations are not separately stated.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements : In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new standard for revenue recognition, Accounting Standards Codification 606 (“ASC 606”). The purpose of ASC 606 is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability across industries. ASC 606 is effective for us for annual periods beginning January 1, 2018. We are currently evaluating the impact the adoption of this new standard will have on our results of operations. In April 2014, the FASB issued Accounting Standards Update 2014-08 (“ASU 2014-08”) “Reporting of Discontinued Operations and Disclosure of Disposals of Components of an Entity,” which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. On January 1, 2015, we adopted ASU 2014-08. The adoption of the new standard did not have an impact on our financial position or results of operations. In February 2015, the FASB issued Accounting Standards Update 2015-02 (“ASU 2015-02”) “Consolidation (Topic 810) — Amendments to the Consolidations Analysis,” which modifies certain aspects of both the variable interest and voting models. ASU 2015-02 is effective for us for annual periods beginning January 1, 2016. We are currently evaluating the impact the adoption of this new standard will have on our financial position or results of operations. In April 2015, the FASB issued Accounting Standards Update 2015-03 (“ASU 2015-03”) “Interest — Imputation of Interest (Subtopic 835-30) — Simplifying the Presentation of Debt Issuance Costs,” that requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB amended ASU 2015-03 to clarify that debt issuance costs related to line-of-credit arrangements may be classified as an asset. ASU 2015-03 is effective for us for annual periods beginning January 1, 2016. We do not expect that the adoption of the new standard will have a material impact on our financial position.

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2015
Discontinued Operations
Schedules of major classes of line items constituting pre-tax profit (loss) of discontinued operations, carrying amount of major classes of assets and liabilities, and other selected financial information during the period owned	The major classes of line items constituting pre-tax (loss) profit of discontinued operations, in millions: Three Months Ended Nine Months Ended September 30 September 30 2015 2014 2015 2014 Net sales $ — $ $ $ Cost of sales — Gross profit — Selling, general and administrative expenses — Income from discontinued operations $ — $ $ $ (Loss) gain on disposal of discontinued operations, net (1) ) ) ) (Loss) income before income tax ) Income tax benefit (expense) (2) ) ) ) Income (loss) from discontinued operations, net $ — $ $ ) $ (1) Included in (loss) gain on disposal of discontinued operations, net in 2014 are additional costs and charges related to the 2013 sale of Tvilum. (2) The unusual relationship between income tax expense and income before income tax for the nine months ended September 30, 2015 resulted primarily from certain non-deductible transaction costs related to the spin off of TopBuild. The carrying amount of major classes of assets and liabilities included as part of the TopBuild discontinued operations, in millions: December 31, 2014 Cash $ Receivables Inventories Deferred income taxes Prepaid expenses and other Property and equipment, net Goodwill Other intangible assets, net Other assets Total assets classified as held for sale $ Accounts payable $ Accrued liabilities Other liabilities Deferred income taxes Total liabilities classified as held for sale $ Other selected financial information for TopBuild during the period owned by us, were as follows, in millions: Nine Months Ended Sep. 30, Sep. 30, 2015 2014 Depreciation and amortization $ $ Capital expenditures $ $

Goodwill and Other Intangible28

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Other Intangible Assets
Schedule of changes in carrying amount of goodwill	The changes in the carrying amount of goodwill for the nine months ended September 30, 2015, by segment, were as follows, in millions: Gross Goodwill Accumulated Net Goodwill At Impairment At Sep. 30, 2015 Losses Sep. 30, 2015 Cabinets and Related Products $ $ ) $ Plumbing Products ) Decorative Architectural Products ) Other Specialty Products ) Total $ $ ) $ Gross Goodwill Accumulated Net Goodwill Net Goodwill At Impairment At At Dec. 31, 2014 Losses Dec. 31, 2014 Acquisitions Other(A) Sep. 30, 2015 Cabinets and Related Products $ $ ) $ $ — $ — $ Plumbing Products ) ) Decorative Architectural Products ) — — Other Specialty Products ) — Total $ $ ) $ $ $ ) $ (A) Other principally includes the effect of foreign currency translation.

Fair Value of Financial Inves29

Fair Value of Financial Investments (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value of Financial Investments
Schedule of financial investments included in other assets	Financial investments included in other assets were as follows, in millions: September 30, December 31, 2015 2014 Auction rate securities $ $ Total recurring investments Equity method investments Private equity funds Other investments Total $ $
Schedule of income from financial investments, net, included in other, net, within other income (expense), net,	Income from financial investments, net, included in other, net, within other income (expense), net, was as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Realized gains from private equity funds $ $ — $ $ Equity investment income (loss), net — — ) Total income from financial investments, net $ $ — $ $

Derivative Instruments and He30

Derivative Instruments and Hedging Activities (Tables)	9 Months Ended
	Sep. 30, 2015
Derivative Instruments and Hedging Activities
Schedule of pre-tax (losses) gains included in the Company's condensed consolidated statements of operations	The pre-tax (losses) gains included in our condensed consolidated statements of operations are as follows, in millions: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Foreign currency contracts Exchange contracts $ — $ $ $ Forward contracts ) — Metal contracts ) — ) — Interest rate swaps — — ) ) Total (loss) gain $ ) $ $ ) $
Schedule of notional amounts being hedged and the fair value of derivative instruments	The notional amounts being hedged and the fair value of those derivative instruments are as follows, in millions: At September 30, 2015 Notional Amount Balance Sheet Foreign currency contracts Exchange contracts $ Receivables $ Forward contracts Accrued liabilities ) Metals contracts Accrued liabilities ) Other liabilities ) At December 31, 2014 Notional Amount Balance Sheet Foreign currency contracts Exchange contracts $ Receivables $ Forward contracts Other assets Accrued liabilities ) Metals contracts Accrued liabilities )

Warranty Liability (Tables)

Warranty Liability (Tables)	9 Months Ended
	Sep. 30, 2015
Warranty Liability
Schedule of changes in the Company's warranty liability	Changes in our warranty liability were as follows, in millions: Nine Months Ended Twelve Months Ended September 30, 2015 December 31, 2014 Balance at January 1 $ $ Accruals for warranties issued during the period Accruals related to pre-existing warranties Settlements made (in cash or kind) during the period ) ) Other, net (including currency translation) ) ) Balance at end of period $ $

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
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: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Long-term stock awards $ $ $ $ Stock options Phantom stock awards and stock appreciation rights — Total $ $ $ $ Income tax benefit (37 percent tax rate – before valuation allowance) $ $ $ $
Schedule of the Company's long-term stock award activity	Our long-term stock award activity was as follows, shares in millions: Nine Months Ended September 30, 2015 2014 Unvested stock award shares at January 1 Weighted average grant date fair value $ $ Stock award shares granted Weighted average grant date fair value $ $ Stock award shares vested Weighted average grant date fair value $ $ Stock award shares forfeited — Weighted average grant date fair value $ $ Forfeitures upon spin off (A) — Weighted average grant date fair value $ $ — Modification upon spin off (B) — Unvested stock award shares at September 30 Weighted average grant date fair value $ $ (A) In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. (B) Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee directors such that all individuals received an equivalent fair value both before and after the separation. The modification to the outstanding stock awards was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan.
Schedule of the Company's stock option activity	Our stock option activity was as follows, shares in millions: Nine Months Ended September 30, 2015 2014 Option shares outstanding, January 1 Weighted average exercise price $ $ Option shares granted — — Weighted average exercise price $ $ Option shares exercised Aggregate intrinsic value on date of exercise (A) $ 32 million $ 17 million Weighted average exercise price $ $ Option shares forfeited Weighted average exercise price $ $ Forfeitures upon spin off (B) — — Weighted average exercise price $ $ — Modification upon spin off (C) — Option shares outstanding, September 30 Weighted average exercise price $ $ Weighted average remaining option term (in years) Option shares vested and expected to vest, September 30 Weighted average exercise price $ $ Aggregate intrinsic value (A) $ 111 million $ 102 million Weighted average remaining option term (in years) Option shares exercisable (vested), September 30 Weighted average exercise price $ $ Aggregate intrinsic value (A) $ 96 million $ 80 million Weighted average remaining option term (in years) (A) Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares. (B) In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. (C) Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee directors such that all individuals received an equivalent fair value both before and after the separation. The modification to the outstanding options was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan.
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	Nine Months Ended September 30, 2015 2014 Weighted average grant date fair value $ $ Risk-free interest rate % % Dividend yield % % Volatility factor % % Expected option life 6 years 6 years

Employee Retirement Plans (Tabl

Employee Retirement Plans (Tables)	9 Months Ended
	Sep. 30, 2015
Employee Retirement Plans
Schedule of net periodic pension cost for the Company's defined-benefit pension plans	Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: Three Months Ended September 30, 2015 2014 Qualified Non-Qualified Qualified Non-Qualified Service cost $ — $ — $ $ — Interest cost Expected return on plan assets ) — ) — Amortization of net loss Net periodic pension cost $ $ $ $ Nine Months Ended September 30, 2015 2014 Qualified Non-Qualified Qualified Non-Qualified Service cost $ $ — $ $ — Interest cost Expected return on plan assets ) — ) — Amortization of net loss Net periodic pension cost $ $ $ $

Reclassifications From Accumu34

Reclassifications From Accumulated Other Comprehensive (Loss) Income (Tables)	9 Months Ended
	Sep. 30, 2015
Reclassifications From Accumulated Other Comprehensive (Loss) Income
Schedule of reclassifications from accumulated other comprehensive (loss) income to the condensed consolidated statements of operations	The reclassifications from accumulated other comprehensive (loss) income to the condensed consolidated statements of operations were as follows, in millions: Amount Reclassified Accumulated Other Three Months Nine Months Comprehensive Ended Sep. 30, Ended Sep. 30, Statement of (Loss) Income 2015 2014 2015 2014 Operations Line Item Amortization of defined benefit pension: Actuarial losses, net $ $ $ $ Selling, general & administrative expenses Tax (benefit) ) ) ) ) Net of tax $ $ — $ $ Interest rate swaps $ — $ — $ $ Interest expense Tax (benefit) expense — — — — Net of tax $ — $ — $ $

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Information
Schedule of information by segment and geographic area	Information by segment and geographic area was as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 2015 2014 2015 2014 Net Sales(A) Operating Profit (Loss) Net Sales(A) Operating Profit (Loss) Our operations by segment were: Cabinets and Related Products $ $ $ $ ) $ $ $ $ ) Plumbing Products Decorative Architectural Products Other Specialty Products Total $ $ $ $ $ $ $ $ Our operations by geographic area were: North America $ $ $ $ $ $ $ $ International, principally Europe Total $ $ $ $ General corporate expense, net ) ) ) ) Operating profit Other income (expense), net ) ) ) ) Income from continuing operations before income taxes $ $ $ $ (A) Inter-segment sales were not material.

Other Income (Expense), Net (Ta

Other Income (Expense), Net (Tables)	9 Months Ended
	Sep. 30, 2015
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: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Income from cash and cash investments $ $ $ $ Income from financial investments, net (Note F) — Foreign currency transaction (losses) gains ) ) Other items, net — Total other, net $ ) $ $ ) $

Earnings Per Common Share (Tabl

Earnings Per Common Share (Tables)	9 Months Ended
	Sep. 30, 2015
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: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Numerator (basic and diluted): Income from continuing operations $ $ $ $ Less: Allocation to unvested restricted stock awards Income from continuing operations attributable to common shareholders Income (loss) from discontinued operations, net — ) Less: Allocation to unvested restricted stock awards — — — — Income (loss) from discontinued operations attributable to common shareholders — ) Net income available to common shareholders $ $ $ $ Denominator: Basic common shares (based upon weighted average) Add: Stock option dilution Diluted common shares

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($) $ in Millions	1 Months Ended		9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014	Sep. 30, 2015
Selected financial information of discontinued operations
Issuance of TopBuild Corp. debt			$ 200
TopBuild
Selected financial information of discontinued operations
Issuance of TopBuild Corp. debt	$ 200
TopBuild | Installation and Other Services
Selected financial information of discontinued operations
Percentage of businesses planned for spinoff		100.00%

Discontinued Operations (Deta39

Discontinued Operations (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Pre-tax profit (Loss) of discontinued operations
Net sales		$ 398	$ 762	$ 1,117
Cost of sales		309	603	877
Gross profit		89	159	240
Selling, general and administrative expenses		68	148	201
Income from discontinued operations		21	11	39
(Loss) gain on disposal of discontinued operations, net	$ (1)	1	(1)	(2)
(Loss) income before income tax	(1)	22	10	37
Income tax benefit (expense)	$ 1	(12)	(11)	(16)
Income (loss) from discontinued operations, net		$ 10	$ (1)	$ 21

Discontinued Operations (Deta40

Discontinued Operations (Details 3) - TopBuild $ in Millions	Dec. 31, 2014USD ($)
Carrying amount of major classes of assets and liabilities included as part of discontinued operations
Cash	$ 4
Receivables	220
Inventories	107
Deferred income taxes	38
Prepaid expenses and other	4
Property and equipment, net	93
Goodwill	1,044
Other intangible assets, net	3
Other assets	1
Total assets classified as held for sale	1,514
Accounts payable	229
Accrued liabilities	71
Other liabilities	40
Deferred income taxes	167
Total liabilities classified as held for sale	$ 507

Discontinued Operations (Deta41

Discontinued Operations (Details 4) - TopBuild - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Selected financial information of discontinued operations
Depreciation and amortization	$ 6	$ 19
Capital expenditures	$ 7	$ 9

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2015	Mar. 31, 2015
UK Window Business
Acquisitions
Cash consideration	$ 16
Aquatic Fitness Business
Acquisitions
Cash consideration		$ 25

Goodwill and Other Intangible43

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Goodwill
Gross Goodwill	$ 2,051	$ 2,048
Accumulated Impairment Losses	(1,208)	(1,208)
Net Goodwill	843	840
Cabinets and Related Products
Goodwill
Gross Goodwill	240	240
Accumulated Impairment Losses	(59)	(59)
Net Goodwill	181	181
Plumbing Products
Goodwill
Gross Goodwill	528	531
Accumulated Impairment Losses	(340)	(340)
Net Goodwill	188	191
Decorative Architectural Products
Goodwill
Gross Goodwill	294	294
Accumulated Impairment Losses	(75)	(75)
Net Goodwill	219	219
Other Specialty Products
Goodwill
Gross Goodwill	989	983
Accumulated Impairment Losses	(734)	(734)
Net Goodwill	$ 255	$ 249

Goodwill and Other Intangible44

Goodwill and Other Intangible Assets (Details 2) $ in Millions	9 Months Ended
	Sep. 30, 2015USD ($)
Changes in the carrying amount of goodwill
Beginning balance	$ 840
Acquisitions	14
Other	(11)
Ending balance	843
Cabinets and Related Products
Changes in the carrying amount of goodwill
Beginning balance	181
Ending balance	181
Plumbing Products
Changes in the carrying amount of goodwill
Beginning balance	191
Acquisitions	8
Other	(11)
Ending balance	188
Decorative Architectural Products
Changes in the carrying amount of goodwill
Beginning balance	219
Ending balance	219
Other Specialty Products
Changes in the carrying amount of goodwill
Beginning balance	249
Acquisitions	6
Ending balance	$ 255

Goodwill and Other Intangible45

Goodwill and Other Intangible Assets (Details 3) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Goodwill and Other Intangible Assets
Other indefinite-lived intangible assets	$ 137	$ 130
Increase in other indefinite-lived intangible assets	$ 7

Goodwill and Other Intangible46

Goodwill and Other Intangible Assets (Details 4) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Goodwill and Other Intangible Assets
Carrying value of definite-lived intangible assets	$ 26	$ 12
Accumulated amortization	49	$ 48
Increase in definite-lived intangible assets	$ 17

Depreciation and Amortization (

Depreciation and Amortization (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Depreciation and Amortization
Depreciation and amortization expense	$ 100	$ 125
Accelerated depreciation expenses		$ 1

Depreciation and Amortization48

Depreciation and Amortization (Details 2) $ in Millions	3 Months Ended
	Sep. 30, 2014USD ($)facility	Sep. 30, 2015USD ($)	Dec. 31, 2014USD ($)
Facilities held-for-sale
Property and equipment, net		$ 1,025	$ 1,046
Cabinets and Related Products | Two facilities held for sale
Facilities held-for-sale
Number of facilities to be sold | facility	2
Property and equipment, net	$ 10
Cabinets and Related Products | Two facilities held for sale | Cost of sales
Facilities held-for-sale
Asset impairment charges	$ 28

Fair Value of Financial Inves49

Fair Value of Financial Investments (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Fair value of financial investments and liabilities
Total financial investments	$ 50	$ 50
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
Recurring | Level 3
Fair value of financial investments and liabilities
Recurring investments, Available-for-sale securities	22	22
Recurring | Auction rate securities | Level 3
Fair value of financial investments and liabilities
Recurring investments, Available-for-sale securities	22	22
Non-recurring investments | Equity method investments
Fair value of financial investments and liabilities
Equity method investments	13	11
Non-recurring investments | Private equity funds
Fair value of financial investments and liabilities
Non-recurring investments	12	14
Non-recurring investments | Other investments
Fair value of financial investments and liabilities
Non-recurring investments	$ 3	$ 3

Fair Value of Financial Inves50

Fair Value of Financial Investments (Details 2) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Income from financial investments, net and impairment charges
Equity investments income (loss), net		$ 2	$ (2)
Total income from financial investments, net	$ 1	7	2
Estimated market value of long-term and short-term debt	3,700	3,700		$ 3,700
Aggregate carrying value of long-term and short-term debt	3,400	3,400		$ 3,400
Private equity funds
Income from financial investments, net and impairment charges
Realized gains from private equity funds	$ 1	$ 5	$ 4

Derivative Instruments and He51

Derivative Instruments and Hedging Activities (Details) - Derivatives designated as hedging instruments - Cash flow hedges - Interest Rate Swaps - 3 month LIBOR interest rate swap, cash flow hedge terminated March 2012 $ in Millions	1 Months Ended
	Mar. 31, 2012USD ($)
Interest Rate Swap Agreements
Debt issued	$ 400
Interest rate swap loss amortized as an increase to interest expense over the remaining term of the debt	23
Other, net
Interest Rate Swap Agreements
Ineffective portion of the cash flow hedges	$ 2

Derivative Instruments and He52

Derivative Instruments and Hedging Activities (Details 3) - Not designated as a hedge - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Derivative instruments and hedging activities
Total (loss) gain	$ (8)	$ 6	$ (15)	$ 1
Foreign currency exchange contracts | Other, net
Derivative instruments and hedging activities
Total (loss) gain		5	3	2
Foreign currency forward contracts | Other, net
Derivative instruments and hedging activities
Total (loss) gain	1	$ 1	(3)
Metal contracts | Cost of sales
Derivative instruments and hedging activities
Total (loss) gain	$ (9)		(14)
Interest Rate Swaps
Derivative instruments and hedging activities
Total (loss) gain			$ (1)	$ (1)

Derivative Instruments and He53

Derivative Instruments and Hedging Activities (Details 2) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Other liabilities
Derivative instruments and hedging activities
Liabilities	$ (2)
Foreign currency exchange contracts
Derivative instruments and hedging activities
Notional Amount	28	$ 55
Foreign currency exchange contracts | Receivables | Recurring | Level 2
Derivative instruments and hedging activities
Assets	1	6
Foreign currency forward contracts
Derivative instruments and hedging activities
Notional Amount	35	79
Foreign currency forward contracts | Accrued liabilities. | Recurring | Level 2
Derivative instruments and hedging activities
Liabilities	(3)	(1)
Foreign currency forward contracts | Other assets | Recurring | Level 2
Derivative instruments and hedging activities
Assets		2
Metal contracts
Derivative instruments and hedging activities
Notional Amount	67	70
Metal contracts | Accrued liabilities. | Recurring | Level 2
Derivative instruments and hedging activities
Liabilities	$ (9)	$ (2)

Warranty Liability (Details)

Warranty Liability (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Warranty Liability
Balance at the beginning of the period	$ 135	$ 124
Accruals for warranties issued during the year	39	51
Accruals related to pre-existing warranties	8	11
Settlements made (in cash or kind) during the year	(36)	(46)
Other, net (including currency translation)	(3)	(5)
Balance at the end of the period	$ 143	$ 135

Debt (Details)

Debt (Details)	Jun. 15, 2015USD ($)	May. 29, 2015USD ($)	Sep. 30, 2015USD ($)	Mar. 24, 2015USD ($)	Mar. 28, 2013USD ($)
Debt
Notes repaid and retired			$ 500,000,000
4.45% Notes and Debentures Due April 1, 2025
Debt
Long-term debt includes notes and debentures				$ 500,000,000
Interest rate (as a percent)				4.45%
4.8% Notes and Debentures Due 15 June 2015
Debt
Notes repaid and retired	$ 500,000,000
Interest rate (as a percent)	4.80%
Credit Agreement dated March 28, 2013
Debt
Borrowing capacity, maximum					$ 1,250,000,000
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Debt
Borrowing capacity, maximum		$ 750,000,000
Increase in maximum borrowing capacity		$ 375,000,000
Amount borrowed			0
Maximum net leverage ratio		4
Minimum interest coverage ratio		2.5
Credit agreement dated May 29, 2015 and August 28, 2015, as amended | Prime rate
Debt
Basis spread		the prime rate
Credit agreement dated May 29, 2015 and August 28, 2015, as amended | Federal funds effective rate
Debt
Basis spread		the Federal Funds effective rate
Interest rate, basis spread (as a percent)		0.50%
Credit agreement dated May 29, 2015 and August 28, 2015, as amended | Libor rate
Debt
Basis spread		LIBOR
Interest rate, basis spread (as a percent)		1.00%
Credit agreement dated May 29, 2015 and August 28, 2015, as amended | Revolver | European euros
Debt
Borrowing capacity, maximum			500,000,000
Credit agreement dated May 29, 2015 and August 28, 2015, as amended | Swingline loans
Debt
Borrowing capacity, maximum			75,000,000
Credit agreement dated May 29, 2015 and August 28, 2015, as amended | Letters of credit
Debt
Borrowing capacity, maximum			100,000,000
Outstanding and unused Letters of Credit			$ 42,000,000

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock-based compensation
Pre-tax compensation expense	$ 7	$ 10	$ 30	$ 34
Income tax benefit	$ 3	$ 4	$ 11	$ 13
Tax rate (as a percent)	37.00%	37.00%	37.00%	37.00%
Long-term stock awards
Stock-based compensation
Pre-tax compensation expense	$ 6	$ 6	$ 19	$ 27
Stock Options
Stock-based compensation
Pre-tax compensation expense	$ 1	1	5	3
Phantom stock awards and stock appreciation rights
Stock-based compensation
Pre-tax compensation expense		$ 3	$ 6	$ 4

Stock-Based Compensation (Det57

Stock-Based Compensation (Details 2) - Long-term stock awards - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Unvested stock award shares
Balance at the beginning of the period (in shares)	6,000,000	8,000,000
Granted (in shares)	719,546	1,000,000
Vested (in shares)	2,000,000	2,000,000
Forfeited (in shares)		1,000,000
Forfeitures upon spin off	1,000,000
Modification upon spin off	1,000,000
Balance at the end of the period (in shares)	5,000,000	6,000,000
Weighted average grant date fair value
Balance at the beginning of the period (in dollars per share)	$ 18	$ 17
Granted (in dollars per share)	26	22
Vested (in dollars per share)	17	17
Forfeited (in dollars per share)	18	16
Forfeitures upon spin off (in dollars per share)	20
Balance at the end of the period (in dollars per share)	$ 17	$ 18
Additional disclosures
Total unrecognized compensation expense	$ 47	$ 68
Remaining weighted average vesting period	3 years	3 years
Total market value (at the vesting date) of stock award shares	$ 54	$ 50

Stock-Based Compensation (Det58

Stock-Based Compensation (Details 3) - Stock Options - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Stock Options
Vesting period	5 years
Expiration period	10 years
Shares
Outstanding at the beginning of the period (in shares)	18,000,000	24,000,000
Granted (in shares)	452,380
Exercised (in shares)	3,000,000	2,000,000
Forfeited (in shares)	3,150,790	3,000,000
Modification upon spin off	2,000,000
Outstanding at the end of the period (in shares)	14,000,000	19,000,000
Option shares vested and expected to vest at the end of the period	14,000,000	19,000,000
Option shares exercisable at the end of the period	12,000,000	16,000,000
Weighted average exercise price
Outstanding at the beginning of the period (in dollars per share)	$ 21	$ 22
Granted (in dollars per share)	26	22
Exercised (in dollars per share)	17	16
Forfeited (in dollars per share)	29	28
Forfeitures upon spin off (in dollars per share)	19
Outstanding at the end of the period (in dollars per share)	17	21
Option shares vested and expected to vest at the end of the period (in dollars per share)	17	21
Option shares exercisable at the end of the period (in dollars per share)	$ 18	$ 22
Aggregate intrinsic value
Exercised	$ 32	$ 17
Option shares vested and expected to vest at the end of the period	111	102
Option shares exercisable at the end of the period	$ 96	$ 80
Weighted average remaining option term
Outstanding at the end of the period	4 years	4 years
Option shares vested and expected to vest at the end of the period	4 years	4 years
Option shares exercisable at the end of the period	3 years	3 years
Additional disclosures
Total unrecognized compensation expense	$ 6	$ 7
Weighted average remaining vesting period	2 years	2 years

Stock-Based Compensation (Det59

Stock-Based Compensation (Details 4) - Stock Options - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Stock Options
Weighted average grant date fair value (in dollars per share)	$ 9.67	$ 9.53
Risk-free interest rate (as a percent)	1.75%	1.91%
Dividend yield (as a percent)	1.32%	1.34%
Volatility factor (as a percent)	42.00%	49.00%
Expected option life	6 years	6 years

Employee Retirement Plans (Deta

Employee Retirement Plans (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)plan	Sep. 30, 2014USD ($)
Net periodic pension cost for the company's defined-benefit pension plans
Number of regional multi-employer pension plans in which the entity participates | plan			1
Qualified
Net periodic pension cost for the company's defined-benefit pension plans
Service cost		$ 1	$ 2	$ 3
Interest cost	$ 13	12	36	38
Expected return on plan assets	(12)	(11)	(35)	(35)
Amortization of net loss	5	2	14	8
Net periodic pension cost	6	4	17	14
Non-Qualified
Net periodic pension cost for the company's defined-benefit pension plans
Interest cost	1	2	5	6
Amortization of net loss	1	1	2	1
Net periodic pension cost	$ 2	$ 3	$ 7	$ 7

Reclassifications From Accumu61

Reclassifications From Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Reclassifications from accumulated other comprehensive (loss) income
Selling, general and administrative expenses	$ 331	$ 341	$ 1,019	$ 1,024
Interest expense	54	57	171	169
Tax (benefit)	77	(415)	219	(377)
Net of tax	111	543	280	756
Actuarial losses, net | Amount Reclassified
Reclassifications from accumulated other comprehensive (loss) income
Selling, general and administrative expenses	6	3	16	9
Tax (benefit)	(2)	$ (3)	(5)	(3)
Net of tax	$ 4		11	6
Interest rate swaps. | Amount Reclassified
Reclassifications from accumulated other comprehensive (loss) income
Interest expense			1	1
Net of tax			$ 1	$ 1

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Information
Net Sales	$ 1,839	$ 1,834	$ 5,427	$ 5,340
Operating Profit (Loss)	258	181	702	555
Other income (expense), net	(60)	(50)	(173)	(159)
Income from continuing operations before income taxes	198	131	529	396
North America
Segment Information
Net Sales	1,462	1,420	4,298	4,100
International, principally Europe
Segment Information
Net Sales	377	414	1,129	1,240
Cabinets and Related Products
Segment Information
Net Sales	253	266	771	756
Plumbing Products
Segment Information
Net Sales	853	855	2,495	2,504
Decorative Architectural Products
Segment Information
Net Sales	527	523	1,600	1,560
Other Specialty Products
Segment Information
Net Sales	206	190	561	520
Operating Segments
Segment Information
Operating Profit (Loss)	283	217	786	663
Operating Segments | Cabinets and Related Products
Segment Information
Operating Profit (Loss)	21	(35)	32	(55)
Operating Segments | Plumbing Products
Segment Information
Operating Profit (Loss)	137	141	386	399
Operating Segments | Decorative Architectural Products
Segment Information
Operating Profit (Loss)	102	91	318	280
Operating Segments | Other Specialty Products
Segment Information
Operating Profit (Loss)	23	20	50	39
Corporate
Segment Information
General corporate expense, net	(25)	(36)	(84)	(108)
Geographic Areas
Segment Information
Operating Profit (Loss)	283	217	786	663
Geographic Areas | North America
Segment Information
Operating Profit (Loss)	234	162	645	494
Geographic Areas | International, principally Europe
Segment Information
Operating Profit (Loss)	$ 49	$ 55	$ 141	$ 169

Severance Costs (Details)

Severance Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Severance Costs
Severance costs	$ 1	$ 13	$ 8	$ 23
Severance costs relating to corporate office actions		$ 13		$ 20

Other Income (Expense), Net (De

Other Income (Expense), Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Other Income (Expense), Net
Income from cash and cash investments	$ 1	$ 1	$ 2	$ 2
Income from financial investments, net (Note F)	1		7	2
Foreign currency transaction (losses) gains	(8)	5	(13)	5
Other items, net		1	2	1
Total other, net	$ (6)	$ 7	$ (2)	$ 10

Earnings Per Common Share (Deta

Earnings Per Common Share (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator (basic and diluted):
Income from continuing operations	$ 111	$ 533	$ 281	$ 735
Less: Allocation to unvested restricted stock awards	2	11	4	15
Income from continuing operations attributable to common shareholders	109	522	277	720
Income (loss) from discontinued operations, net		10	(1)	21
Income (loss) from discontinued operations attributable to common shareholders		10	(1)	21
Net income available to common shareholders	$ 109	$ 532	$ 276	$ 741
Denominator:
Basic common shares (based upon weighted average) (in shares)	335	350	340	350
Add: Stock option dilution (in shares)	3	3	4	3
Diluted common shares (in shares)	338	353	344	353

Earnings Per Common Share (De66

Earnings Per Common Share (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	1 Months Ended		3 Months Ended			9 Months Ended
	Sep. 30, 2015	Aug. 31, 2015	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Antidilutive securities excluded from computation of earnings per share
Repurchase and retirement of common stock (in shares)						15,500
Total consideration for repurchase of common stock including unpaid cash						$ 407
Stock repurchased during period		$ 200
Stock repurchased during period (in shares)	1,500	6,100
Remaining number of shares authorized to be repurchased	29,500		29,500			29,500
Dividends
Cash dividends per common share paid (in dollars per share)			$ 0.090		$ 0.090	$ 0.270	$ 0.240
Cash dividends per common share declared (in dollars per share)			$ 0.095		$ 0.090	$ 0.275	$ 0.255
Stock Options
Antidilutive securities excluded from computation of earnings per share
Antidilutive effect on computation of diluted earnings per common share (in shares)			4,000		8,000	6,000	8,000
Long-term stock awards
Antidilutive securities excluded from computation of earnings per share
Repurchase and retirement of common stock to offset the dilutive impact of stock awards (in shares)				720

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2015
Effective tax rate (as a percent)	39.00%	78.00%	41.00%	35.00%
Tax benefit from release of valuation allowance		$ 517
Period of cumulative income position					3 years
Tax expense which previously benefited from the decrease in the valuation allowance		$ 47
Deferred tax asset recognized, share based compensation	$ 17		$ 17
Deferred tax asset not recognized, share based compensation	53		53
Forecast
Deferred tax asset recognized, share based compensation						$ 36
TopBuild
Valuation allowance on deferred tax assets	$ 18		$ 18