Exhibit 99
FOR IMMEDIATE RELEASE |
Investor / Media Contact
Maria Duey
Vice President – Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
MASCO CORPORATION REPORTS THIRD
QUARTER 2011 RESULTS
2011 Third Quarter Commentary
• | Sales increased three percent to $2.0 billion compared to the third quarter of 2010. |
• | Results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, compared to the third quarter of 2010 were as follows: |
• | Gross profit margins were 25.1 percent compared to 26.9 percent. |
• | Operating profit margins were 6.1 percent compared to 7.2 percent. |
• | Income was $.08 per common share compared to $.11 per common share. |
• | Income (loss), as reported, was $.10 per common share compared to $(.02) per common share for the third quarter of 2010. |
• | Working capital as a percent of sales improved to 14.8 percent at September 30, 2011, compared to 16.2 percent at September 30, 2010. |
• | We retired approximately $60 million in zero coupon notes. |
• | We ended the third quarter of 2011 with over $1.6 billion of cash. |
Taylor, Mich., (October 24, 2011) – Masco Corporation (NYSE: MAS) today reported that net sales for the third quarter ended September 30, 2011 increased three percent to $2.0 billion compared to the third quarter of 2010. North American sales were flat and International sales increased 12 percent. In local currencies, International sales increased four percent compared with the third quarter of 2010.
Income was $.08 per common share and $.11 per common share for the third quarters of 2011 and 2010, respectively, excluding the items in Exhibit A and with a normalized tax rate of 36 percent. As reported, income (loss) was $.10 per common share and $(.02) per common share for the third quarters ended September 30, 2011 and 2010, respectively.
Income for the three months ended September 30, 2011 included $19 million of pre-tax gains ($.03 per common share, after tax) related to distributions from private equity funds. Income for the three months ended September 30, 2010 included $3 million of pre-tax losses ($.01 per common share, after tax) related to the sale of financial investments.
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Income also included the impact of mark-to-market changes on certain metal commodity hedges aggregating $10 million of pre-tax losses ($.02 per common share, after tax) and $4 million of pre-tax gains ($.01 per common share, after tax), for the three month periods ended September 30, 2011 and 2010, respectively.
“Our sales increased three percent compared to third quarter 2010, reflecting strong sales of plumbing-related products driven by share gains of our Hansgrohe and Delta brands, share gains in our Installation segment and foreign currency translation. The third quarter of 2011 was negatively impacted by continued depressed conditions in new home construction and by the deferral of “big ticket” repair and remodel activity,” said Masco’s President and CEO Tim Wadhams. “We have continued to take aggressive steps to address these challenging market dynamics and further reduce our cost structure. In October, we closed multiple facilities and reduced headcount in those businesses most affected by these economic conditions. In addition, we identified four businesses within the Installation and other Services segment for divestiture. These businesses were focused on noncore diversified products which include framing, commercial drywall installation, and millwork.”
We continue to focus on the rationalization of our businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the third quarters of 2011 and 2010, we incurred costs and charges of $13 million pre-tax ($.02 per common share, after tax) and $39 million pre-tax ($.07 per common share, after tax), respectively, related to these initiatives.
Outlook 2011
“The foreclosure process, credit availability, declining home values, and consumer confidence continue to dampen the U.S. economy and hinder any housing recovery. We continue to believe that housing start levels in 2011 will be flat with 2010. Longer-term, however, we are confident about the fundamentals for the new home construction and home improvement markets and we are optimistic about the future,” said Tim Wadhams. “We continue to focus on the things we can control, including managing our cost structure and business portfolio, and launching exciting new programs in paint, plumbing, cabinets and builder hardware. In addition, we are funding global initiatives in our paint and plumbing businesses. We expect that improvements in our markets and in consumer spending, together with the changes we are driving across Masco and our financial strength, will create significant value for our shareholders in the future.”
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.
The 2011 third quarter supplemental material, including a presentation in PDF format, will be distributed after the market closes on October 24, 2011 and will be available on the Company’s Web site atwww.masco.com.
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A conference call regarding items contained in this release is scheduled for Tuesday, October 25, 2011 at 8:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (719) 457-1529 (confirmation #7673584). The conference call will be webcast simultaneously on the Company’s Web site atwww.masco.com and supplemental material, including the financial data referred to on the call and a reconciliation of non-GAAP information provided on the call, will also be available on the Web site.
A replay of the call will be available on Masco’s Web site or by phone by dialing (719) 457-0820 (replay access code #7673584) approximately two hours after the end of the call and will continue through November 1, 2011.
Masco Corporation’s press releases and other information are available through the Company’s toll free number, 1-888-MAS-NEWS, or under the Investor Relations section of Masco’s Web site atwww.masco.com.
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Statements contained in this press release that reflect our views about our future performance constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believe,” “anticipate,” “appear,” “may,” “will,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements. Our future performance may be affected by our reliance on new home construction and home improvement, our reliance on key customers, the cost and availability of raw materials, shifts in consumer preferences and purchasing practices, and our ability to achieve cost savings through the Masco Business System and other initiatives. These and other factors are discussed in detail in Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Our forward-looking statements in this press release speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.
The Company believes that the non-GAAP performance measures and ratios that are contained herein, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company’s filings with the Securities and Exchange Commission and is available on Masco’s Web site atwww.masco.com.
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MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED
For the Three Months and Nine Months Ended September 30, 2011 and 2010
(In Millions, Except Per Common Share Data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales | $ | 2,006 | $ | 1,957 | $ | 5,800 | $ | 5,857 | ||||||||
Cost of Sales | 1,511 | 1,463 | 4,348 | 4,325 | ||||||||||||
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Gross profit | 495 | 494 | 1,452 | 1,532 | ||||||||||||
Selling, general and administrative expenses | 393 | 392 | 1,238 | 1,233 | ||||||||||||
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Operating profit | 102 | 102 | 214 | 299 | ||||||||||||
Other income (expense), net | (41 | ) | (64 | ) | (116 | ) | (223 | ) | ||||||||
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Income before income taxes | 61 | 38 | 98 | 76 | ||||||||||||
Income tax expense | 12 | 31 | 63 | 53 | ||||||||||||
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Net income (loss) | 49 | 7 | 35 | 23 | ||||||||||||
Less: Net income attributable to non-controlling interest | 13 | 12 | 37 | 32 | ||||||||||||
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Net income (loss) attributable to Masco Corporation | $ | 36 | $ | (5 | ) | $ | (2 | ) | $ | (9 | ) | |||||
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Income (loss) per common share attributable to Masco Corporation (diluted): | ||||||||||||||||
Net income (loss) attributable to Masco Corporation | $ | 0.10 | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.03 | ) | |||||
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Average diluted common shares outstanding | 348 | 349 | 348 | 349 | ||||||||||||
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Amounts attributable to Masco Corporation: | ||||||||||||||||
Net income (loss) attributable to Masco Corporation | $ | 36 | $ | (5 | ) | $ | (2 | ) | $ | (9 | ) | |||||
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Masco Corporation
Key Financial Data As Reported—Unaudited
Q3—2011 and 2010
(In Millions, Except Earnings Per Share)
Sales & Earnings | 9/30/2011 | 9/30/2010 | Change | |||||||||
Net Sales | $ | 2,006 | $ | 1,957 | 3 | % | ||||||
Operating Profit | $ | 102 | $ | 102 | N/A | |||||||
Operating Profit % of Net Sales | 5.1 | % | 5.2 | % | (10 | )bps | ||||||
Other Income (Expense), Net | $ | (41 | ) | $ | (64 | ) | $ | 23 | ||||
Income Tax Expense | $ | 12 | $ | 31 | N/A | |||||||
Income (Loss) Attributable to Masco Corporation | $ | 36 | $ | (5 | ) | N/A | ||||||
Diluted EPS | $ | 0.10 | $ | (0.02 | ) | N/A | ||||||
Operating Expenses | 9/30/2011 | 9/30/2010 | Change | |||||||||
Cost of Sales | $ | 1,511 | $ | 1,463 | 3 | % | ||||||
Gross Margin | 24.7 | % | 25.2 | % | (50 | )bps | ||||||
SG&A Expenses (Including GCE) | $ | 393 | $ | 392 | 0 | % | ||||||
SG&A as a % of net sales | 19.6 | % | 20.0 | % | 40 | bps | ||||||
General Corporate Expense (GCE) | $ | 27 | $ | 27 | 0 | % | ||||||
General Corp Expense as a % of net sales | 1.3 | % | 1.4 | % | 10 | bps | ||||||
Business Segments | 9/30/2011 | 9/30/2010 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 307 | $ | 357 | -14 | % | ||||||
Operating Loss | $ | (34 | ) | $ | (61 | ) | N/A | |||||
Operating Loss % of Net Sales | -11.1 | % | -17.1 | % | 600 | bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 768 | $ | 686 | 12 | % | ||||||
Operating Profit | $ | 91 | $ | 97 | N/A | |||||||
Operating Profit % of Net Sales | 11.8 | % | 14.1 | % | (230 | )bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 315 | $ | 292 | 8 | % | ||||||
Operating Loss | $ | (27 | ) | $ | (22 | ) | N/A | |||||
Operating Loss % of Net Sales | -8.6 | % | -7.5 | % | (110 | )bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 455 | $ | 463 | -2 | % | ||||||
Operating Profit | $ | 88 | $ | 104 | N/A | |||||||
Operating Profit % of Net Sales | 19.3 | % | 22.5 | % | (320 | )bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 161 | $ | 159 | 1 | % | ||||||
Operating Profit | $ | 12 | $ | 11 | N/A | |||||||
Operating Profit % of Net Sales | 7.5 | % | 6.9 | % | 60 | bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 2,006 | $ | 1,957 | 3 | % | ||||||
Operating Profit | $ | 130 | $ | 129 | N/A | |||||||
Operating Profit % of Net Sales | 6.5 | % | 6.6 | % | (10 | )bps |
Masco Corporation
Key Financial Data As Reported—Unaudited
Q3—2011 and 2010
(In Millions, Except Earnings Per Share)
Business Regions | 9/30/2011 | 9/30/2010 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 1,524 | $ | 1,528 | 0 | % | ||||||
Operating Profit | $ | 80 | $ | 79 | N/A | |||||||
Operating Profit % of Net Sales | 5.2 | % | 5.2 | % | — | bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 482 | $ | 429 | 12 | % | ||||||
Operating Profit | $ | 50 | $ | 50 | N/A | |||||||
Operating Profit % of Net Sales | 10.4 | % | 11.7 | % | (130 | )bps |
Masco Corporation
Key Financial Data As Reported—Unaudited
Year-to-date September 30, 2011 and 2010
(In Millions, Except Earnings Per Share)
Sales & Earnings | 9/30/2011 | 9/30/2010 | Change | |||||||||
Net Sales | $ | 5,800 | $ | 5,857 | -1 | % | ||||||
Operating Profit | $ | 214 | $ | 299 | N/A | |||||||
Operating Profit % of Net Sales | 3.7 | % | 5.1 | % | (140 | )bps | ||||||
Other Income (Expense), Net | $ | (116 | ) | $ | (223 | ) | $ | 107 | ||||
Income Tax Expense | $ | 63 | $ | 53 | N/A | |||||||
(Loss) Attributable to Masco Corporation | $ | (2 | ) | $ | (9 | ) | N/A | |||||
Diluted EPS | $ | (0.01 | ) | $ | (0.03 | ) | N/A |
Operating Expenses | 9/30/2011 | 9/30/2010 | Change | |||||||||
Cost of Sales | $ | 4,348 | $ | 4,325 | 1 | % | ||||||
Gross Margin | 25.0 | % | 26.2 | % | (120 | )bps | ||||||
SG&A Expenses (Including GCE) | $ | 1,238 | $ | 1,233 | 0 | % | ||||||
SG&A as a % of net sales | 21.3 | % | 21.1 | % | (20 | )bps | ||||||
General Corporate Expense (GCE) | $ | 95 | $ | 84 | 13 | % | ||||||
General Corp Expense as a % of net sales | 1.6 | % | 1.4 | % | (20 | )bps |
Business Segments | 9/30/2011 | 9/30/2010 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 944 | $ | 1,160 | -19 | % | ||||||
Operating Loss | $ | (111 | ) | $ | (113 | ) | N/A | |||||
Operating Loss % of Net Sales | -11.8 | % | -9.7 | % | (210 | )bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 2,239 | $ | 2,031 | 10 | % | ||||||
Operating Profit | $ | 270 | $ | 267 | N/A | |||||||
Operating Profit % of Net Sales | 12.1 | % | 13.1 | % | (100 | )bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 863 | $ | 874 | -1 | % | ||||||
Operating Loss | $ | (93 | ) | $ | (87 | ) | N/A | |||||
Operating Loss % of Net Sales | -10.8 | % | -10.0 | % | (80 | )bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 1,322 | $ | 1,357 | -3 | % | ||||||
Operating Profit | $ | 247 | $ | 300 | N/A | |||||||
Operating Profit % of Net Sales | 18.7 | % | 22.1 | % | (340 | )bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 432 | $ | 435 | -1 | % | ||||||
Operating (Loss) Profit | $ | 2 | $ | 16 | N/A | |||||||
Operating Profit % of Net Sales | 0.5 | % | 3.7 | % | (320 | )bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 5,800 | $ | 5,857 | -1 | % | ||||||
Operating Profit | $ | 315 | $ | 383 | N/A | |||||||
Operating Profit % of Net Sales | 5.4 | % | 6.5 | % | (110 | )bps |
Masco Corporation
Key Financial Data As Reported—Unaudited
Year-to-date September 30, 2011 and 2010
(In Millions, Except Earnings Per Share)
Business Regions | 9/30/2011 | 9/30/2010 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 4,420 | $ | 4,617 | -4 | % | ||||||
Operating Profit | $ | 178 | $ | 257 | N/A | |||||||
Operating Profit % of Net Sales | 4.0 | % | 5.6 | % | (160 | )bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 1,380 | $ | 1,240 | 11 | % | ||||||
Operating Profit | $ | 137 | $ | 126 | N/A | |||||||
Operating Profit % of Net Sales | 9.9 | % | 10.2 | % | (30 | )bps | ||||||
Working Capital | 9/30/2011 | 9/30/2010 | ||||||||||
Receivable Days | 48 | 49 | (1 | ) | ||||||||
Inventory Days | 56 | 53 | 3 | |||||||||
Payable Days | 62 | 51 | 11 | |||||||||
Working Capital (Receivables+Inventory-Payables) | $ | 1,117 | $ | 1,258 | -11 | % | ||||||
Working Capital as a % of Sales (As Reported TTM1) | 14.8 | % | 16.2 | % | (140 | )bps | ||||||
Other | 9/30/2011 | 9/30/2010 | ||||||||||
Dividend Payments | $80 | $ | 81 | |||||||||
Cash Paid for Share Repurchases2 | $30 | $ | 45 | |||||||||
Common Shares Repurchased2 | 2 | 3 | ||||||||||
CAPEX | $106 | $ | 88 | |||||||||
Depreciation and Amortization | $188 | $ | 209 | |||||||||
Average diluted common shares outstanding | 348 | 349 | ||||||||||
Balance Sheet Information | ||||||||||||
Long-Term Debt | $ | 3,224 | $ | 4,036 | ||||||||
Notes Payable | $ | 806 | $ | 66 | ||||||||
Total Debt | $ | 4,030 | $ | 4,102 | ||||||||
Shareholders’ Equity | $ | 1,487 | $ | 2,700 | ||||||||
Debt to Capital | 73 | % | 60 | % | ||||||||
Cash | $ | 1,610 | $ | 1,537 |
1 - Trailing Twelve Months
2 - Common shares were repurchased to offset the effect of stock award grants in the first quarters of 2011 and 2010.
MASCO CORPORATION
Reconciliations—Exhibit A—UNAUDITED
For the Three Months Ended September 30, 2011 and 2010
(In Millions, Except Per Common Share Data)
Gross Profit and Operating Profit Reconciliations
Three Months Ended September 30, | ||||||||
2011 | 2010 | |||||||
Sales | $ | 2,006 | $ | 1,957 | ||||
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Gross profit, as reported | $ | 495 | $ | 494 | ||||
Rationalization charges | 8 | 32 | ||||||
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Gross profit, as adjusted | $ | 503 | $ | 526 | ||||
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Gross margin, as reported | 24.7 | % | 25.2 | % | ||||
Gross margin, as adjusted | 25.1 | % | 26.9 | % | ||||
Operating profit, as reported | $ | 102 | $ | 102 | ||||
Rationalization charges | 13 | 39 | ||||||
Impairment of intangible assets | 7 | — | ||||||
Litigation charge | 1 | — | ||||||
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Operating profit, as adjusted | $ | 123 | $ | 141 | ||||
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Operating margin, as reported | 5.1 | % | 5.2 | % | ||||
Operating margin, as adjusted | 6.1 | % | 7.2 | % | ||||
Earnings Per Common Share Reconciliation | ||||||||
Three Months Ended September 30, | ||||||||
2011 | 2010 | |||||||
Income before income taxes—as reported | $ | 61 | $ | 38 | ||||
Rationalization charges | 13 | 39 | ||||||
Impairment of intangible assets | 7 | — | ||||||
Litigation charge | 1 | — | ||||||
(Gains) losses from financial investments | (19 | ) | 3 | |||||
Impairment of financial investments | — | — | ||||||
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Income before income taxes—as adjusted | $ | 63 | $ | 80 | ||||
Tax at 36% rate | (23 | ) | (29 | ) | ||||
Less: Net income attributable to non-controlling interest | (13 | ) | (12 | ) | ||||
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Net income—as adjusted | $ | 27 | $ | 39 | ||||
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Earnings per common share—as adjusted | $ | 0.08 | $ | 0.11 | ||||
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Shares outstanding | 348 | 349 |
The Company believes that certain non-GAAP performance measures and ratios used in managing the business may provide additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States.
Masco Corporation—3rd Quarter 2011
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1 | Condensed Consolidated Statements of Operations—2011 & 2010 by Quarter—Unaudited | |
2 | Notes to Condensed Consolidated Statements of Operations—2011 & 2010 by Quarter—Unaudited | |
3 | 2011 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and | |
Other Initiatives—Unaudited | ||
4 | 2011 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and | |
Other Initiatives—Unaudited | ||
5 | 2011 Costs and Charges for Business Rationalizations and Other Initiatives—Unaudited | |
6 | 2010 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and | |
Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited | ||
7 | 2010 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and | |
Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited | ||
8 | 2010 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges | |
for Goodwill and Other Intangible Assets—Unaudited | ||
9 | Other Income (Expense), Net—2011 & 2010 by Quarter—Unaudited | |
10 | Condensed Consolidated Balance Sheets—Unaudited | |
GAAP Reconciliations: | ||
11 | Sales Growth Excluding the Effect of Acquisitions and Currency Translation—Unaudited | |
12 | Operating Profit and Margins—Unaudited |
Index
MASCO CORPORATION
Condensed Consolidated Statements of Operations
2011 & 2010—by Quarter—Unaudited
(dollars in millions, except per share data)
2011 | 2010 | |||||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | |||||||||||||||||||||||||||||
Net Sales | $ | 2,006 | $ | 2,022 | $ | 1,772 | $ | 7,592 | $ | 1,735 | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||||||||||||||
Cost of Sales | 1,511 | 1,490 | 1,347 | 5,752 | 1,427 | 1,463 | 1,502 | 1,360 | ||||||||||||||||||||||||||||||
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Gross Profit | 495 | 532 | 425 | 1,840 | 308 | 494 | 546 | 492 | ||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) | 24.7 | % | 26.3 | % | 24.0 | % | 24.2 | % | 17.8 | % | 25.2 | % | 26.7 | % | 26.6 | % | ||||||||||||||||||||||
SG&A Expense (before lines 1, 2, 3) | 358 | 400 | 372 | 1,508 | 359 | 365 | 400 | 384 | ||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) | 17.8 | % | 19.8 | % | 21.0 | % | 19.9 | % | 20.7 | % | 18.7 | % | 19.5 | % | 20.7 | % | ||||||||||||||||||||||
Operating Profit (before lines 1, 2, 3) | 137 | 132 | 53 | 332 | (51 | ) | 129 | 146 | 108 | |||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) | 6.8 | % | 6.5 | % | 3.0 | % | 4.4 | % | -2.9 | % | 6.6 | % | 7.1 | % | 5.8 | % | ||||||||||||||||||||||
1 | General Corporate Expense (GCE), Net | 27 | 36 | 32 | 110 | 26 | 27 | 27 | 30 | |||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (including lines 1, 2, 3) | 19.6 | % | 21.8 | % | 22.8 | % | 30.8 | % | 63.7 | % | 20.0 | % | 20.8 | % | 22.4 | % | ||||||||||||||||||||||
2 | Charge for Litigation Settlement | 1 | 5 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
3 | Impairment Charges for Goodwill and Other Intangible Assets | 7 | — | — | 721 | 721 | — | — | — | |||||||||||||||||||||||||||||
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Operating Profit (Loss) per F/S | $ | 102 | $ | 91 | $ | 21 | $ | (499 | ) | $ | (798 | ) | $ | 102 | $ | 119 | $ | 78 | ||||||||||||||||||||
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Income (Loss) Per Common Share Attributable to Masco Corporation (Diluted): | ||||||||||||||||||||||||||||||||||||||
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Net Income (Loss) | $ | 0.10 | $ | 0.02 | $ | (0.13 | ) | $ | (3.00 | ) | $ | (2.96 | ) | $ | (0.02 | ) | $ | 0.01 | $ | (0.02 | ) | |||||||||||||||||
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Please see page 2 for Notes.
Page 1
MASCO CORPORATION
Notes To Condensed Consolidated Statements of Operations
2011 & 2010—by Quarter—Unaudited
Notes:
- | Data exclude discontinued operations. |
- | Operating results for the first, second and third quarters of 2011 include costs and charges related to business rationalizations and other initiatives of $32 million pre-tax ($.06 per common share, after tax), $15 million pre-tax ($.03 per common share, after tax) and $13 million pre-tax ($.02 per common share, after tax), respectively. |
- | Operating results for the second and third quarters of 2011 include mark-to-market losses on certain metal commodity hedges of $1 million pre-tax and $10 million pre-tax ($.02 per common share, after tax), respectively. |
- | Operating results for the third quarter of 2011 include an impairment charge for intangible assets of $7 million pre-tax ($.01 per common share, after tax). |
- | Operating results for the second and third quarters of 2011 include litigation settlement expenses of $5 million pre-tax ($.01 per common share, after tax) and $1 million pre-tax, respectively. |
- | Net income (loss) for the first, second and third quarters of 2011 include income from financial investments of $17 million pre-tax ($.03 per common share, after tax), $33 million, pre-tax ($.06 per common share, after tax) and $19 million pre-tax ($.03 per common share, after tax), respectively. |
- | Operating results for the fourth quarter of 2010 include non-cash impairment charges for goodwill and other intangible assets of $721 million pre-tax ($1.70 per common share, after tax). |
- | Operating results for the first, second, third and fourth quarters of 2010 include costs and charges related to business rationalizations and other initiatives of $14 million pre-tax ($.03 per common share, after tax), $51 million pre-tax ($.09 per common share, after tax), $39 million pre-tax ($.07 per common share, after tax), and $104 million pre-tax ($.19 per common share, after tax), respectively. |
- | Operating results for the first, second, third and fourth quarters of 2010 include mark-to-market gains(losses) on certain metal commodity hedges of $1 million pre-tax, ($2) million pre-tax, $4 million pre-tax ($.01 per common share, after tax), and $4 million pre-tax ($.01 per common share, after tax), respectively. |
- | Net income (loss) for the second and fourth quarters of 2010 include non-cash impairment charges for financial investments of $33 million pre-tax ($.06 per common share, after tax) and $1 million pre-tax respectively. |
- | Net income (loss) for the second, third and fourth quarters of 2010 include income (loss) from financial investments of $1 million pre-tax, ($3) million pre-tax ($.01 per common, after tax) and $11 million pre-tax ($.02 per common share, after tax), respectively. |
Page 2
MASCO CORPORATION
Quarterly Segment Data—2011
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Other Intangible Assets—Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||
Net Sales: | ||||||||||||||||
- Cabinets and Related Products | $ | 307 | $ | 330 | $ | 307 | ||||||||||
- Plumbing Products | 768 | 761 | 710 | |||||||||||||
- Installation and Other Services | 315 | 294 | 254 | |||||||||||||
- Decorative Architectural Products | 455 | 492 | 375 | |||||||||||||
- Other Specialty Products | 161 | 145 | 126 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 2,006 | $ | 2,022 | $ | 1,772 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
- North America | $ | 1,524 | $ | 1,563 | $ | 1,333 | ||||||||||
- International, principally Europe | 482 | 459 | 439 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total, as above | $ | 2,006 | $ | 2,022 | $ | 1,772 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating (Loss) Profit: | ||||||||||||||||
- Cabinets and Related Products | $ | (27 | ) | $ | (21 | ) | $ | (29 | ) | |||||||
- Plumbing Products | 92 | 100 | 90 | |||||||||||||
- Installation and Other Services | (18 | ) | (24 | ) | (38 | ) | ||||||||||
- Decorative Architectural Products | 88 | 90 | 70 | |||||||||||||
- Other Specialty Products | 14 | — | (10 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 149 | $ | 145 | $ | 83 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
- North America | $ | 98 | $ | 100 | $ | 41 | ||||||||||
- International, principally Europe | 51 | 45 | 42 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total, as above | $ | 149 | $ | 145 | $ | 83 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
General Corporate Expense (GCE), Net | 26 | 34 | 30 | |||||||||||||
Charge for Litigation Settlement | 1 | 5 | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating Profit (after GCE and Adjustments) | 122 | 106 | 53 | |||||||||||||
Other Income (Expense), Net | (41 | ) | (33 | ) | (42 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before Income Taxes | $ | 81 | $ | 73 | $ | 11 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Margins: | ||||||||||||||||
- Cabinets and Related Products | -8.8 | % | -6.4 | % | -9.4 | % | ||||||||||
- Plumbing Products | 12.0 | % | 13.1 | % | 12.7 | % | ||||||||||
- Installation and Other Services | -5.7 | % | -8.2 | % | -15.0 | % | ||||||||||
- Decorative Architectural Products | 19.3 | % | 18.3 | % | 18.7 | % | ||||||||||
- Other Specialty Products | 8.7 | % | 0.0 | % | -7.9 | % | ||||||||||
- Total | 7.4 | % | 7.2 | % | 4.7 | % | ||||||||||
- North America | 6.4 | % | 6.4 | % | 3.1 | % | ||||||||||
- International, principally Europe | 10.6 | % | 9.8 | % | 9.6 | % | ||||||||||
- Total, as above | 7.4 | % | 7.2 | % | 4.7 | % |
Notes:
- Data exclude discontinued operations.
- Operating (loss) profit and margins by segment and geographic area are before general corporate expense.
- See 2011 Costs and Charges for Business Rationalizations and Other Initiatives—page 5.
Page 3
MASCO CORPORATION
Quarterly Segment Data—2011
Including Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Other Intangible Assets—Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||
Net Sales: | ||||||||||||||||
- Cabinets and Related Products | $ | 307 | $ | 330 | $ | 307 | ||||||||||
- Plumbing Products | 768 | 761 | 710 | |||||||||||||
- Installation and Other Services | 315 | 294 | 254 | |||||||||||||
- Decorative Architectural Products | 455 | 492 | 375 | |||||||||||||
- Other Specialty Products | 161 | 145 | 126 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 2,006 | $ | 2,022 | $ | 1,772 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
- North America | $ | 1,524 | $ | 1,563 | $ | 1,333 | ||||||||||
- International, principally Europe | 482 | 459 | 439 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total, as above | $ | 2,006 | $ | 2,022 | $ | 1,772 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating (Loss) Profit: | ||||||||||||||||
- Cabinets and Related Products | $ | (34 | ) | $ | (27 | ) | $ | (50 | ) | |||||||
- Plumbing Products | 91 | 95 | 84 | |||||||||||||
- Installation and Other Services | (27 | ) | (26 | ) | (40 | ) | ||||||||||
- Decorative Architectural Products | 88 | 90 | 69 | |||||||||||||
- Other Specialty Products | 12 | — | (10 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 130 | $ | 132 | $ | 53 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
- North America | $ | 80 | $ | 87 | $ | 11 | ||||||||||
- International, principally Europe | 50 | 45 | 42 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total, as above | $ | 130 | $ | 132 | $ | 53 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
General Corporate Expense (GCE), Net | 27 | 36 | 32 | |||||||||||||
Charge for Litigation Settlement | 1 | 5 | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating Profit (after GCE and Adjustments) | 102 | 91 | 21 | |||||||||||||
Other Income (Expense), Net | (41 | ) | (33 | ) | (42 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Income (Loss) before Income Taxes | $ | 61 | $ | 58 | $ | (21 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Margins: | ||||||||||||||||
- Cabinets and Related Products | -11.1 | % | -8.2 | % | -16.3 | % | ||||||||||
- Plumbing Products | 11.8 | % | 12.5 | % | 11.8 | % | ||||||||||
- Installation and Other Services | -8.6 | % | -8.8 | % | -15.7 | % | ||||||||||
- Decorative Architectural Products | 19.3 | % | 18.3 | % | 18.4 | % | ||||||||||
- Other Specialty Products | 7.5 | % | 0.0 | % | -7.9 | % | ||||||||||
- Total | 6.5 | % | 6.5 | % | 3.0 | % | ||||||||||
- North America | 5.2 | % | 5.6 | % | 0.8 | % | ||||||||||
- International, principally Europe | 10.4 | % | 9.8 | % | 9.6 | % | ||||||||||
- Total, as above | 6.5 | % | 6.5 | % | 3.0 | % |
Notes:
- Data exclude discontinued operations.
- Operating (loss) profit and margins by segment and geographic area are before general corporate expense.
- See 2011 Costs and Charges for Business Rationalizations and Other Initiatives—page 5.
Page 4
MASCO CORPORATION
Quarterly Segment Data—2011
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Other Intangible Assets—Unaudited
(in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||
Business Rationalizations & Other Initiatives | ||||||||||||||||
- Cabinets and Related Products | $ | 7 | $ | 6 | $ | 21 | ||||||||||
- Plumbing Products | 1 | 5 | 6 | |||||||||||||
- Installation and Other Services | 2 | 2 | 2 | |||||||||||||
- Decorative Architectural Products | — | — | 1 | |||||||||||||
- Other Specialty Products | 2 | — | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 12 | $ | 13 | $ | 30 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
- North America | $ | 11 | $ | 13 | $ | 30 | ||||||||||
- International, principally Europe | 1 | — | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total, as above | $ | 12 | $ | 13 | $ | 30 | ||||||||||
General Corporate Expense (GCE), Net | 1 | 2 | 2 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 13 | $ | 15 | $ | 32 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Other Intangible Assets Impairment | ||||||||||||||||
- Cabinets and Related Products | $ | — | $ | — | $ | — | ||||||||||
- Plumbing Products | — | — | — | |||||||||||||
- Installation and Other Services | 7 | — | — | |||||||||||||
- Decorative Architectural Products | — | — | — | |||||||||||||
- Other Specialty Products | — | — | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total | $ | 7 | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
- North America | $ | 7 | $ | — | $ | — | ||||||||||
- International, principally Europe | — | — | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
- Total, as above | $ | 7 | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
Notes:
- | Data exclude discontinued operations. |
- | Business rationalizations and other initiatives include costs and charges for business consolidations, plant closures, headcount reductions, system implementations and other initiatives. |
Page 5
MASCO CORPORATION
Quarterly Segment Data—2010
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 1,464 | $ | 304 | $ | 357 | $ | 400 | $ | 403 | ||||||||||
- Plumbing Products | 2,692 | 661 | 686 | 682 | 663 | |||||||||||||||
- Installation and Other Services | 1,147 | 273 | 292 | 309 | 273 | |||||||||||||||
- Decorative Architectural Products | 1,693 | 336 | 463 | 505 | 389 | |||||||||||||||
- Other Specialty Products | 596 | 161 | 159 | 152 | 124 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 7,592 | $ | 1,735 | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 5,929 | $ | 1,312 | $ | 1,528 | $ | 1,659 | $ | 1,430 | ||||||||||
- International, principally Europe | 1,663 | 423 | 429 | 389 | 422 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 7,592 | $ | 1,735 | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (71 | ) | $ | (46 | ) | $ | (27 | ) | $ | 6 | $ | (4 | ) | ||||||
- Plumbing Products | 347 | 70 | 100 | 92 | 85 | |||||||||||||||
- Installation and Other Services | (106 | ) | (25 | ) | (20 | ) | (21 | ) | (40 | ) | ||||||||||
- Decorative Architectural Products | 350 | 50 | 104 | 109 | 87 | |||||||||||||||
- Other Specialty Products | 19 | 3 | 11 | 11 | (6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 539 | $ | 52 | $ | 168 | $ | 197 | $ | 122 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 373 | $ | 21 | $ | 116 | $ | 160 | $ | 76 | ||||||||||
- International, principally Europe | 166 | 31 | 52 | 37 | 46 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 539 | $ | 52 | $ | 168 | $ | 197 | $ | 122 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
General Corporate Expense (GCE), Net | 109 | 25 | 27 | 27 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating Profit (after GCE and Adjustments) | 430 | 27 | 141 | 170 | 92 | |||||||||||||||
Other Income (Expense), Net | (278 | ) | (55 | ) | (64 | ) | (103 | ) | (56 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
(Loss) Income before Income Taxes | $ | 152 | $ | (28 | ) | $ | 77 | $ | 67 | $ | 36 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -4.8 | % | -15.1 | % | -7.6 | % | 1.5 | % | -1.0 | % | ||||||||||
- Plumbing Products | 12.9 | % | 10.6 | % | 14.6 | % | 13.5 | % | 12.8 | % | ||||||||||
- Installation and Other Services | -9.2 | % | -9.2 | % | -6.8 | % | -6.8 | % | -14.7 | % | ||||||||||
- Decorative Architectural Products | 20.7 | % | 14.9 | % | 22.5 | % | 21.6 | % | 22.4 | % | ||||||||||
- Other Specialty Products | 3.2 | % | 1.9 | % | 6.9 | % | 7.2 | % | -4.8 | % | ||||||||||
- Total | 7.1 | % | 3.0 | % | 8.6 | % | 9.6 | % | 6.6 | % | ||||||||||
- North America | 6.3 | % | 1.6 | % | 7.6 | % | 9.6 | % | 5.3 | % | ||||||||||
- International, principally Europe | 10.0 | % | 7.3 | % | 12.1 | % | 9.5 | % | 10.9 | % | ||||||||||
- Total, as above | 7.1 | % | 3.0 | % | 8.6 | % | 9.6 | % | 6.6 | % |
Notes:
- Data exclude discontinued operations.
- Operating (loss) profit and margins by segment and geographic area are before general corporate expense.
- See 2010 Costs and Charges for Business Rationalizations and Other Initiatives—page 8.
Page 6
MASCO CORPORATION
Quarterly Segment Data—2010
Including Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 1,464 | $ | 304 | $ | 357 | $ | 400 | $ | 403 | ||||||||||
- Plumbing Products | 2,692 | 661 | 686 | 682 | 663 | |||||||||||||||
- Installation and Other Services | 1,147 | 273 | 292 | 309 | 273 | |||||||||||||||
- Decorative Architectural Products | 1,693 | 336 | 463 | 505 | 389 | |||||||||||||||
- Other Specialty Products | 596 | 161 | 159 | 152 | 124 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 7,592 | $ | 1,735 | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 5,929 | $ | 1,312 | $ | 1,528 | $ | 1,659 | $ | 1,430 | ||||||||||
- International, principally Europe | 1,663 | 423 | 429 | 389 | 422 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 7,592 | $ | 1,735 | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (250 | ) | $ | (137 | ) | $ | (61 | ) | $ | (37 | ) | $ | (15 | ) | |||||
- Plumbing Products | 331 | 64 | 97 | 86 | 84 | |||||||||||||||
- Installation and Other Services | (834 | ) | (747 | ) | (22 | ) | (23 | ) | (42 | ) | ||||||||||
- Decorative Architectural Products | 345 | 45 | 104 | 109 | 87 | |||||||||||||||
- Other Specialty Products | 19 | 3 | 11 | 11 | (6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | (389 | ) | $ | (772 | ) | $ | 129 | $ | 146 | $ | 108 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | (543 | ) | $ | (800 | ) | $ | 79 | $ | 114 | $ | 64 | ||||||||
- International, principally Europe | 154 | 28 | 50 | 32 | 44 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | (389 | ) | $ | (772 | ) | $ | 129 | $ | 146 | $ | 108 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
General Corporate Expense (GCE), Net | 110 | 26 | 27 | 27 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating Profit (after GCE and Adjustments) | (499 | ) | (798 | ) | 102 | 119 | 78 | |||||||||||||
Other Income (Expense), Net | (278 | ) | (55 | ) | (64 | ) | (103 | ) | (56 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
(Loss) Income before Income Taxes | $ | (777 | ) | $ | (853 | ) | $ | 38 | $ | 16 | $ | 22 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -17.1 | % | -45.1 | % | -17.1 | % | -9.3 | % | -3.7 | % | ||||||||||
- Plumbing Products | 12.3 | % | 9.7 | % | 14.1 | % | 12.6 | % | 12.7 | % | ||||||||||
- Installation and Other Services | -72.7 | % | -273.6 | % | -7.5 | % | -7.4 | % | -15.4 | % | ||||||||||
- Decorative Architectural Products | 20.4 | % | 13.4 | % | 22.5 | % | 21.6 | % | 22.4 | % | ||||||||||
- Other Specialty Products | 3.2 | % | 1.9 | % | 6.9 | % | 7.2 | % | -4.8 | % | ||||||||||
- Total | -5.1 | % | -44.5 | % | 6.6 | % | 7.1 | % | 5.8 | % | ||||||||||
- North America | -9.2 | % | -61.0 | % | 5.2 | % | 6.9 | % | 4.5 | % | ||||||||||
- International, principally Europe | 9.3 | % | 6.6 | % | 11.7 | % | 8.2 | % | 10.4 | % | ||||||||||
- Total, as above | -5.1 | % | -44.5 | % | 6.6 | % | 7.1 | % | 5.8 | % |
Notes:
- Data exclude discontinued operations.
- Operating (loss) profit and margins by segment and geographic area are before general corporate expense.
- See 2010 Costs and Charges for Business Rationalizations and Other Initiatives—page 8.
Page 7
MASCO CORPORATION
Quarterly Segment Data—2010
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited
(in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Business Rationalizations & Other Initiatives | ||||||||||||||||||||
- Cabinets and Related Products | $ | 179 | $ | 91 | $ | 34 | $ | 43 | $ | 11 | ||||||||||
- Plumbing Products | 15 | 5 | 3 | 6 | 1 | |||||||||||||||
- Installation and Other Services | 8 | 2 | 2 | 2 | 2 | |||||||||||||||
- Decorative Architectural Products | 5 | 5 | — | — | — | |||||||||||||||
- Other Specialty Products | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 207 | $ | 103 | $ | 39 | $ | 51 | $ | 14 | ||||||||||
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|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 195 | $ | 100 | $ | 37 | $ | 46 | $ | 12 | ||||||||||
- International, principally Europe | 12 | 3 | 2 | 5 | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 207 | $ | 103 | $ | 39 | $ | 51 | $ | 14 | ||||||||||
General Corporate Expense (GCE), Net | 1 | 1 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 208 | $ | 104 | $ | 39 | $ | 51 | $ | 14 | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
Goodwill and Other Intangible Assets Impairment | ||||||||||||||||||||
- Cabinets and Related Products | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
- Plumbing Products | 1 | 1 | — | — | — | |||||||||||||||
- Installation and Other Services | 720 | 720 | — | — | — | |||||||||||||||
- Decorative Architectural Products | — | — | — | — | — | |||||||||||||||
- Other Specialty Products | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 721 | $ | 721 | $ | — | $ | — | $ | — | ||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 721 | $ | 721 | $ | — | $ | — | $ | — | ||||||||||
- International, principally Europe | — | — | — | — | — | |||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 721 | $ | 721 | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
Notes:
- | Data exclude discontinued operations. |
- | Business rationalizations and other initiatives include costs and charges for business consolidations, plant closures, headcount reductions, system implementations and other initiatives. |
Page 8
MASCO CORPORATION
Other Income (Expense), Net
2011 & 2010—by Quarter—Unaudited
(in millions)
2011 | 2010 | |||||||||||||||||||||||||||||||||||
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | |||||||||||||||||||||||||||
Interest Expense | $ | (63 | ) | $ | (64 | ) | $ | (63 | ) | $ | (251 | ) | $ | (63 | ) | $ | (63 | ) | $ | (67 | ) | $ | (58 | ) | ||||||||||||
Income from Cash and Cash Investments | 2 | 1 | 2 | 6 | 2 | 2 | 1 | 1 | ||||||||||||||||||||||||||||
Other Interest Income | 1 | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||
Realized Gains (Losses) from Financial Investments, Net | 19 | 33 | 17 | 9 | 11 | (3 | ) | 1 | — | |||||||||||||||||||||||||||
Impairment Charges for Financial Investments | — | — | — | (34 | ) | (1 | ) | — | (33 | ) | — | |||||||||||||||||||||||||
Other, Net | — | (3 | ) | 2 | (9 | ) | (4 | ) | — | (5 | ) | — | ||||||||||||||||||||||||
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| |||||||||||||||||||
Total Other Income (Expense), Net | $ | (41 | ) | $ | (33 | ) | $ | (42 | ) | $ | (278 | ) | $ | (55 | ) | $ | (64 | ) | $ | (103 | ) | $ | (56 | ) | ||||||||||||
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|
Notes:
- | Data exclude discontinued operations. |
- | Other, Net, in 2011 includes currency gains (losses) of $2 million, $(3) million, and $1 million for the first, second, and third quarters, respectively. |
- | Other, Net, in 2010 includes currency (losses) gains of ($1) million, ($5) million, $4 million and $—for the first, second, third and fourth quarters, respectively. |
Page 9
MASCO CORPORATION
Condensed Consolidated Balance Sheets—Unaudited
(in millions)
September 30, 2011 | December 31, 2010 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Investments | $ | 1,610 | $ | 1,715 | ||||
Receivables | 1,133 | 888 | ||||||
Inventories | 850 | 732 | ||||||
Prepaid Expenses and Other | 118 | 129 | ||||||
|
|
|
| |||||
Total Current Assets | 3,711 | 3,464 | ||||||
Property and Equipment, Net | 1,656 | 1,737 | ||||||
Goodwill | 2,387 | 2,383 | ||||||
Other Intangible Assets, Net | 256 | 269 | ||||||
Other Assets | 202 | 287 | ||||||
|
|
|
| |||||
Total Assets | $ | 8,212 | $ | 8,140 | ||||
|
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| |||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Notes Payable | $ | 806 | $ | 66 | ||||
Accounts Payable | 866 | 602 | ||||||
Accrued Liabilities | 813 | 819 | ||||||
|
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|
| |||||
Total Current Liabilities | 2,485 | 1,487 | ||||||
Long-Term Debt | 3,224 | 4,032 | ||||||
Deferred Income Taxes and Other | 1,016 | 1,039 | ||||||
|
|
|
| |||||
Total Liabilities | 6,725 | 6,558 | ||||||
Shareholders’ Equity | 1,487 | 1,582 | ||||||
|
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| |||||
Total Liabilities and Shareholders’ Equity | $ | 8,212 | $ | 8,140 | ||||
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|
Page 10
MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation—Unaudited
(dollars in millions)
Three Months Ended September 30, | ||||||||||||
2011 | 2010 | % D | ||||||||||
Net Sales, As Reported | $ | 2,006 | $ | 1,957 | 3 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (40 | ) | — | |||||||||
|
|
|
| |||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,966 | $ | 1,957 | 0 | % | ||||||
|
|
|
| |||||||||
North America Net Sales, As Reported | $ | 1,524 | $ | 1,528 | 0 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (3 | ) | — | |||||||||
|
|
|
| |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,521 | $ | 1,528 | 0 | % | ||||||
|
|
|
| |||||||||
International Net Sales, As Reported | $ | 482 | $ | 429 | 12 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (37 | ) | — | |||||||||
|
|
|
| |||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 445 | $ | 429 | 4 | % | ||||||
|
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|
| |||||||||
Nine Months Ended September 30, | ||||||||||||
2011 | 2010 | % D | ||||||||||
As Reported | $ | 5,800 | $ | 5,857 | -1 | % | ||||||
- Acquisitions | — | �� | ||||||||||
- Currency Translation | (94 | ) | — | |||||||||
|
|
|
| |||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 5,706 | $ | 5,857 | -3 | % | ||||||
|
|
|
| |||||||||
North America Net Sales, As Reported | $ | 4,420 | $ | 4,617 | -4 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (10 | ) | — | |||||||||
|
|
|
| |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 4,410 | $ | 4,617 | -4 | % | ||||||
|
|
|
| |||||||||
International Net Sales, As Reported | $ | 1,380 | $ | 1,240 | 11 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (84 | ) | — | |||||||||
|
|
|
| |||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,296 | $ | 1,240 | 5 | % | ||||||
|
|
|
|
Notes:
- | Data exclude discontinued operations. |
- | The Company presents information comparing results from one period to another excluding the results of businesses acquired in order to assess the performance of the underlying businesses and to assess to what extent acquisitions are impacting growth. |
- | The Company also presents information comparing results of International operations from one period to another using constant exchange rates. Current period results for foreign entities are converted into U.S. dollars using the prior period’s exchange rates, rather than exchange rates for the current period. The Company presents this information to assess how the underlying businesses performed in local currencies before taking into account currency fluctuations. |
- | The currency translation effect on North American net sales includes currency translation related to Canadian business units. |
Page 11
MASCO CORPORATION
GAAP Reconciliation of Operating Profit and Margins—Unaudited
(dollars in millions)
Three Months Ended September 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported | $ | 102 | 5.1 | % | $ | 102 | 5.2 | % | ||||||||
Business Rationalizations and Other Initiatives | 13 | 39 | ||||||||||||||
Impairment Charges for Intangible Assets | 7 | — | ||||||||||||||
Charge for Litigation Settlement | 1 | — | ||||||||||||||
|
|
|
| |||||||||||||
Operating Profit, As Reconciled | $ | 123 | 6.1 | % | $ | 141 | 7.2 | % | ||||||||
|
|
|
|
Nine Months Ended September 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating (Loss) Profit, As Reported | $ | 214 | 3.7 | % | $ | 299 | 5.1 | % | ||||||||
Business Rationalizations and Other Initiatives | 60 | 104 | ||||||||||||||
Impairment Charges for Intangible Assets | 7 | — | ||||||||||||||
Charge for Litigation Settlement, after tax | 6 | — | ||||||||||||||
|
|
|
| |||||||||||||
Operating Profit, As Reconciled | $ | 287 | 4.9 | % | $ | 403 | 6.9 | % | ||||||||
|
|
|
|
Notes:
- | Data exclude discontinued operations. |
- | The Company believes that certain non-GAAP performance measures and ratios used in managing the business may provide additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. |
Page 12