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
2011 RESULTS
2011 Full-Year Commentary
• | At $7.5 billion, net sales were relatively flat compared to 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 full-year of 2010 were as follows: |
• | Gross profit margins were 25.1 percent compared to 26.7 percent |
• | Operating profit margins were 4.4 percent compared to 5.9 percent |
• | Income from continuing operations was $.02 per common share compared to $.23 per common share |
• | Loss from continuing operations,as reported was $(1.34) per common share compared to $(2.94) per common share in 2010. |
• | We recorded an impairment charge for goodwill and other intangible assets which reduced our reported earnings by $(.96) per common share for the full-year and fourth quarter of 2011. |
• | Working capital as a percent of sales improved to 12.2 percent at December 31, 2011, compared to 13.4 percent at December 31, 2010. |
• | Free cash flow (cash from operations, less capital expenditures, before dividends) was approximately $71 million. |
• | We ended 2011 with approximately $1.7 billion of cash. |
Taylor, Mich., (February 13, 2012) — Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the year ended December 31, 2011 at $7.5 billion were relatively flat, compared to 2010. North American sales decreased three percent and International sales increased eight percent compared to 2010. In local currencies, International sales increased three percent compared with 2010.
Income from continuing operations was $.02 per common share and $.23 per common share for 2011 and 2010, respectively, excluding the items in Exhibit A and with a normalized tax rate of 36 percent. Including these items, loss from continuing operations, as reported was $(1.34) per common share and $(2.94) per common share for the years ended December 31, 2011 and 2010, respectively.
“Our performance in 2011 was challenged by commodity cost volatility, a competitive retail environment, a flat housing environment in North America and difficult economic conditions in Europe” said Masco’s President and CEO, Tim Wadhams. “Despite these headwinds, we continued to: strengthen our leading brand positions, including the introduction of new products and programs; improve our cost structure and productivity; invest in future growth opportunities and improve our working capital management.”
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2011 marked the completion of our major rationalization activities, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During 2011 and 2010, we incurred costs and charges of $121 million pre-tax ($.22 per common share, after tax) and $208 million pre-tax ($.38 per common share, after tax), respectively, related to these initiatives. “We believe these actions have better positioned our businesses for the current environment and have improved our leverage to a housing recovery,” said Mr. Wadhams.
In the fourth quarter of 2011, we recorded non-cash, pre-tax impairment charges for goodwill and other intangible assets of $494 million ($.96 per common share, after tax). The impairment charge for goodwill and other intangible assets is primarily related to our North American window business in our Other Specialty Products segment.
In the fourth quarter of 2010, we recorded non-cash, pre-tax impairment charges for goodwill and other intangible assets of $698 million ($1.68 per common share, after tax).
We recently successfully amended our revolving credit facility to reflect the impact of our impairment charges in 2011 for goodwill and other intangible assets and the valuation allowance for our deferred tax assets on our net worth. We currently have borrowing capacity of approximately $630 million available under the revolving credit facility.
Fourth Quarter 2011
2011 Fourth Quarter Commentary
• | Sales increased one percent to over $1.7 billion |
• | Results for key financial measures,as adjusted for certain items (see Exhibit B) and with a normalized tax rate of 36 percent, compared to the fourth quarter of 2010 were as follows: |
• | Gross profit margins were 21.9 percent compared to 23.5 percent |
• | Operating profit margins were 1.6 percent compared to 1.9 percent |
• | Loss from continuing operations was $(.09) per common share compared to $(.08) per common share |
• | Loss from continuing operations,as reported was $(1.42) per common share compared to $(2.92) per common share in the fourth quarter of 2010 |
Fourth quarter 2011 net sales from continuing operations increased one percent, to over $1.7 billion compared with $1.7 billion for the fourth quarter of 2010. North American sales increased two percent and International sales decreased one percent. In local currencies, International sales were flat compared with the fourth quarter of 2010.
Loss from continuing operations was $(.09) per common share and $(.08) per common share, for the fourth quarters of 2011 and 2010, respectively, excluding the items in Exhibit B and with a normalized tax rate of 36 percent. Including these items, loss from continuing operations, as reported, was $(1.42) per common share in the fourth quarter of 2011 compared to $(2.92) per common share in the fourth quarter of 2010.
During the fourth quarters of 2011 and 2010, we incurred business rationalization costs and charges of $61 million pre-tax ($.11 per common share, after tax) and $104 million pre-tax ($.19 per common share, after tax), respectively.
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Outlook 2012
“While 2011 was a difficult year, we head into 2012 with cautious optimism. The major restructuring activities impacting our Installation segment and our North American cabinet operations are behind us and those businesses experienced improving operational trends in the fourth quarter. While our efforts to reduce costs and increase revenues did not improve performance as quickly as we anticipated in 2011, we firmly believe that these actions will drive significant improvement in 2012, even if we see no improvement in the housing markets. In cabinetry, we have taken significant actions to drive improvement both in North America and Europe, but do remain concerned about general economic conditions in the UK and Europe” said Mr. Wadhams.
“We are focused on achieving our 2012 strategic initiatives, which include leveraging our brands, reducing our costs, improving our Installation and Cabinet segments and strengthening our balance sheet. We believe these initiatives, coupled with the actions we have taken over the past several years, should position us for improved results in 2012 even in a flat housing market, and continue to believe that we will outperform as the housing market recovers.”
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 fourth quarter supplemental material, including a presentation in PDF format, will be distributed after the market closes on February 13, 2012 and will be available on the Company’s Web site atwww.masco.com.
A conference call regarding items contained in this release is scheduled for Tuesday, February 14, 2012 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) 325-2397 (confirmation #1748843). 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 #1748843) approximately two hours after the end of the call and will continue through February 21, 2012.
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Masco Corporation’s press releases and other information are available through the Company’s toll free number, 1-888-MAS-NEWS, or under the Investor Relations section of Masco’s Web site atwww.masco.com.
Statements contained 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,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” 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 restructuring 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 siteat www.masco.com.
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MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales | $ | 1,738 | $ | 1,716 | $ | 7,467 | $ | 7,486 | ||||||||
Cost of sales | 1,406 | 1,407 | 5,683 | 5,653 | ||||||||||||
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Gross profit | 332 | 309 | 1,784 | 1,833 | ||||||||||||
Selling, general and administrative expenses | 369 | 380 | 1,585 | 1,598 | ||||||||||||
Impairment charges for goodwill and other intangible assets | 494 | 698 | 494 | 698 | ||||||||||||
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Operating loss | (531 | ) | (769 | ) | (295 | ) | (463 | ) | ||||||||
Other income (expense), net | (62 | ) | (55 | ) | (177 | ) | (278 | ) | ||||||||
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Loss before income taxes | (593 | ) | (824 | ) | (472 | ) | (741 | ) | ||||||||
Income tax (benefit) expense | (104 | ) | 187 | (49 | ) | 240 | ||||||||||
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Loss from continuing operations | (489 | ) | (1,011 | ) | (423 | ) | (981 | ) | ||||||||
Loss from discontinued operations, net | (79 | ) | (14 | ) | (110 | ) | (21 | ) | ||||||||
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Net loss | (568 | ) | (1,025 | ) | (533 | ) | (1,002 | ) | ||||||||
Less: Net income attributable to non-controlling interest | 5 | 9 | 42 | 41 | ||||||||||||
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Net loss attributable to Masco Corporation | $ | (573 | ) | $ | (1,034 | ) | $ | (575 | ) | $ | (1,043 | ) | ||||
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Loss per common share attributable to Masco Corporation (diluted): | ||||||||||||||||
Loss from continuing operations | $ | (1.42 | ) | $ | (2.92 | ) | $ | (1.34 | ) | $ | (2.94 | ) | ||||
Loss from discontinued operations, net | (0.23 | ) | (0.04 | ) | (0.32 | ) | (0.06 | ) | ||||||||
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Net loss attributable to Masco Corporation | $ | (1.65 | ) | $ | (2.96 | ) | $ | (1.66 | ) | $ | (3.00 | ) | ||||
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Average diluted common shares outstanding | 348 | 349 | 348 | 349 | ||||||||||||
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Amounts attributable to Masco Corporation: | ||||||||||||||||
Loss from continuing operations | $ | (494 | ) | $ | (1,020 | ) | $ | (465 | ) | $ | (1,022 | ) | ||||
Loss from discontinued operations, net | (79 | ) | (14 | ) | (110 | ) | (21 | ) | ||||||||
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Net loss | $ | (573 | ) | $ | (1,034 | ) | $ | (575 | ) | $ | (1,043 | ) | ||||
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MASCO CORPORATION
Reconciliations - Exhibit A - UNAUDITED
For the Twelve Months Ended December 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
Gross Profit and Operating Profit Reconciliations
Twelve Months Ended | ||||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Sales | $ | 7,467 | $ | 7,486 | ||||
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Gross profit, as reported | $ | 1,784 | $ | 1,833 | ||||
Rationalization charges | 91 | 166 | ||||||
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Gross profit, as adjusted | $ | 1,875 | $ | 1,999 | ||||
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Gross margin, as reported | 23.9 | % | 24.5 | % | ||||
Gross margin, as adjusted | 25.1 | % | 26.7 | % | ||||
Operating loss, as reported | $ | (295 | ) | $ | (463 | ) | ||
Rationalization charges | 121 | 208 | ||||||
Impairment of goodwill and other intangible assets | 494 | 698 | ||||||
Litigation charge | 9 | — | ||||||
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Operating profit, as adjusted | $ | 329 | $ | 443 | ||||
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Operating margin, as reported | -4.0 | % | -6.2 | % | ||||
Operating margin, as adjusted | 4.4 | % | 5.9 | % | ||||
Earnings Per Common Share Reconciliation | ||||||||
Twelve Months Ended | ||||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Loss before income taxes - as reported | $ | (472 | ) | $ | (741 | ) | ||
Rationalization charges | 121 | 208 | ||||||
Impairment of goodwill and other intangible assets | 494 | 698 | ||||||
Litigation charge | 9 | — | ||||||
(Gains) losses from financial investments | (73 | ) | (9 | ) | ||||
Impairment of financial investments | — | 34 | ||||||
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Income before income taxes - as adjusted | $ | 79 | $ | 190 | ||||
Tax at 36% rate | (28 | ) | (68 | ) | ||||
Less: Net income attributable to non-controlling interest | (42 | ) | (41 | ) | ||||
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Net income - as adjusted | $ | 9 | $ | 81 | ||||
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Earnings per common share - as adjusted | $ | 0.02 | $ | 0.23 | ||||
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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
Reconciliations - Exhibit B - UNAUDITED
For the Three Months Ended December 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
Gross Profit and Operating Profit Reconciliations
Three Months Ended | ||||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Sales | $ | 1,738 | $ | 1,716 | ||||
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Gross profit, as reported | $ | 332 | $ | 309 | ||||
Rationalization charges | 48 | 95 | ||||||
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Gross profit, as adjusted | $ | 380 | $ | 404 | ||||
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Gross margin, as reported | 19.1 | % | 18.0 | % | ||||
Gross margin, as adjusted | 21.9 | % | 23.5 | % | ||||
Operating loss, as reported | $ | (531 | ) | $ | (769 | ) | ||
Rationalization charges | 61 | 104 | ||||||
Impairment of goodwill and other intangible assets | 494 | 698 | ||||||
Litigation charge | 3 | — | ||||||
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Operating profit, as adjusted | $ | 27 | $ | 33 | ||||
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Operating margin, as reported | -30.6 | % | -44.8 | % | ||||
Operating margin, as adjusted | 1.6 | % | 1.9 | % | ||||
Earnings Per Common Share Reconciliation | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Loss before income taxes - as reported | $ | (593 | ) | $ | (824 | ) | ||
Rationalization charges | 61 | 104 | ||||||
Impairment of goodwill and other intangible assets | 494 | 698 | ||||||
Litigation charge | 3 | — | ||||||
(Gains) losses from financial investments | (4 | ) | (11 | ) | ||||
Impairment of financial investments | — | 1 | ||||||
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Loss before income taxes - as adjusted | $ | (39 | ) | $ | (32 | ) | ||
Tax at 36% rate | 14 | 12 | ||||||
Less: Net income attributable to non-controlling interest | (5 | ) | (9 | ) | ||||
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Net loss - as adjusted | $ | (30 | ) | $ | (29 | ) | ||
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Loss per common share - as adjusted | $ | (0.09 | ) | $ | (0.08 | ) | ||
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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
Key Financial Data As Reported - Unaudited
Q4 - 2011 and 2010
(In Millions, Except Earnings Per Share)
Sales & Earnings | 12/31/2011 | 12/31/2010 | Change | |||||||||
Net Sales | $ | 1,738 | $ | 1,716 | 1 | % | ||||||
Operating (Loss) | $ | (531 | ) | $ | (769 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -30.6 | % | -44.8 | % | 1,420 | bps | ||||||
Other Income (Expense), Net | $ | (62 | ) | $ | (55 | ) | $ | (7 | ) | |||
Income Tax (Benefit) Expense | $ | (104 | ) | $ | 187 | N/A | ||||||
(Loss) Attributable to Masco Corporation | $ | (494 | ) | $ | (1,020 | ) | N/A | |||||
Diluted EPS | $ | (1.42 | ) | $ | (2.92 | ) | N/A | |||||
Operating Expenses | 12/31/2011 | 12/31/2010 | Change | |||||||||
Cost of Sales | $ | 1,406 | $ | 1,407 | 0 | % | ||||||
Gross Margin | 19.1 | % | 18.0 | % | 110 | bps | ||||||
SG&A Expenses (Including GCE) | $ | 369 | $ | 380 | -3 | % | ||||||
SG&A as a % of net sales | 21.2 | % | 22.1 | % | 90 | bps | ||||||
General Corporate Expense (GCE) | $ | 23 | $ | 26 | -12 | % | ||||||
General Corp Expense as a % of net sales | 1.3 | % | 1.5 | % | 20 | bps | ||||||
Business Segments | 12/31/2011 | 12/31/2010 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 287 | $ | 304 | -6 | % | ||||||
Operating (Loss) | $ | (95 | ) | $ | (137 | ) | N/A | |||||
Operating Loss % of Net Sales | -33.1 | % | -45.1 | % | 1,200 | bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 674 | $ | 661 | 2 | % | ||||||
Operating Profit | $ | 52 | $ | 64 | N/A | |||||||
Operating Profit % of Net Sales | 7.7 | % | 9.7 | % | (200 | )bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 285 | $ | 254 | 12 | % | ||||||
Operating (Loss) | $ | (8 | ) | $ | (718 | ) | N/A | |||||
Operating Loss % of Net Sales | -2.8 | % | -282.7 | % | N/A | bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 348 | $ | 336 | 4 | % | ||||||
Operating (Loss) Profit | $ | (51 | ) | $ | 45 | N/A | ||||||
Operating (Loss) Profit % of Net Sales | -14.7 | % | 13.4 | % | N/A | bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 144 | $ | 161 | -11 | % | ||||||
Operating (Loss) Profit | $ | (403 | ) | $ | 3 | N/A | ||||||
Operating Profit % of Net Sales | -279.9 | % | 1.9 | % | N/A | bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 1,738 | $ | 1,716 | 1 | % | ||||||
Operating (Loss) | $ | (505 | ) | $ | (743 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -29.1 | % | -43.3 | % | 1,420 | bps | ||||||
Business Regions | 12/31/2011 | 12/31/2010 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 1,320 | $ | 1,293 | 2 | % | ||||||
Operating (Loss) | $ | (459 | ) | $ | (771 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -34.8 | % | -59.6 | % | 2,480 | bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 418 | $ | 423 | -1 | % | ||||||
Operating (Loss) Profit | $ | (46 | ) | $ | 28 | N/A | ||||||
Operating (Loss) Profit % of Net Sales | -11.0 | % | 6.6 | % | (1,760 | )bps |
Masco Corporation
Key Financial Data As Reported - Unaudited
Year-to-date December 31, 2011 and 2010
(In Millions, Except Earnings Per Share)
Sales & Earnings | 12/31/2011 | 12/31/2010 | Change | |||||||||
Net Sales | $ | 7,467 | $ | 7,486 | 0 | % | ||||||
Operating (Loss) | $ | (295 | ) | $ | (463 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -4.0 | % | -6.2 | % | 220 | bps | ||||||
Other Income (Expense), Net | $ | (177 | ) | $ | (278 | ) | $ | 101 | ||||
Income Tax (Benefit) Expense | $ | (49 | ) | $ | 240 | N/A | ||||||
(Loss) Attributable to Masco Corporation | $ | (465 | ) | $ | (1,022 | ) | N/A | |||||
Diluted EPS | $ | (1.34 | ) | $ | (2.94 | ) | N/A | |||||
Operating Expenses | 12/31/2011 | 12/31/2010 | Change | |||||||||
Cost of Sales | $ | 5,683 | $ | 5,653 | 1 | % | ||||||
Gross Margin | 23.9 | % | 24.5 | % | (60 | )bps | ||||||
SG&A Expenses (Including GCE) | $ | 1,585 | $ | 1,598 | -1 | % | ||||||
SG&A as a % of net sales | 21.2 | % | 21.3 | % | 10 | bps | ||||||
General Corporate Expense (GCE) | $ | 118 | $ | 110 | 7 | % | ||||||
General Corp Expense as a % of net sales | 1.6 | % | 1.5 | % | (10 | )bps | ||||||
Business Segments | 12/31/2011 | 12/31/2010 | Change | |||||||||
Cabinets and Related Products: | ||||||||||||
Net Sales | $ | 1,231 | $ | 1,464 | -16 | % | ||||||
Operating (Loss) | $ | (206 | ) | $ | (250 | ) | N/A | |||||
Operating Loss % of Net Sales | -16.7 | % | -17.1 | % | 40 | bps | ||||||
Plumbing Products: | ||||||||||||
Net Sales | $ | 2,913 | $ | 2,692 | 8 | % | ||||||
Operating Profit | $ | 322 | $ | 331 | N/A | |||||||
Operating Profit % of Net Sales | 11.1 | % | 12.3 | % | (120 | )bps | ||||||
Installation and Other Services: | ||||||||||||
Net Sales | $ | 1,077 | $ | 1,041 | 3 | % | ||||||
Operating (Loss) | $ | (79 | ) | $ | (798 | ) | N/A | |||||
Operating Loss % of Net Sales | -7.3 | % | -76.7 | % | N/A | bps | ||||||
Decorative Architectural Products: | ||||||||||||
Net Sales | $ | 1,670 | $ | 1,693 | -1 | % | ||||||
Operating Profit | $ | 196 | $ | 345 | N/A | |||||||
Operating Profit % of Net Sales | 11.7 | % | 20.4 | % | N/A | bps | ||||||
Other Specialty Products: | ||||||||||||
Net Sales | $ | 576 | $ | 596 | -3 | % | ||||||
Operating (Loss) Profit | $ | (401 | ) | $ | 19 | N/A | ||||||
Operating (Loss) Profit % of Net Sales | -69.6 | % | 3.2 | % | N/A | bps | ||||||
Total Segment Reported: | ||||||||||||
Net Sales | $ | 7,467 | $ | 7,486 | 0 | % | ||||||
Operating (Loss) | $ | (168 | ) | $ | (353 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -2.2 | % | -4.7 | % | 250 | bps |
Masco Corporation
Key Financial Data As Reported - Unaudited
Year-to-date December 31, 2011 and 2010
(In Millions, Except Earnings Per Share)
Business Regions | 12/31/2011 | 12/31/2010 | Change | |||||||||
North America | ||||||||||||
Net Sales | $ | 5,669 | $ | 5,823 | -3 | % | ||||||
Operating (Loss) | $ | (259 | ) | $ | (507 | ) | N/A | |||||
Operating (Loss) % of Net Sales | -4.6 | % | -8.7 | % | 410 | bps | ||||||
International, principally Europe | ||||||||||||
Net Sales | $ | 1,798 | $ | 1,663 | 8 | % | ||||||
Operating Profit | $ | 91 | $ | 154 | N/A | |||||||
Operating Profit % of Net Sales | 5.1 | % | 9.3 | % | (420 | )bps | ||||||
Working Capital | 12/31/2011 | 12/31/2010 | ||||||||||
Receivable Days | 47 | 47 | — | |||||||||
Inventory Days | 52 | 49 | 3 | |||||||||
Payable Days | 63 | 51 | 12 | |||||||||
Working Capital (Receivables+Inventory-Payables) | $ | 913 | $ | 1,018 | -10 | % | ||||||
Working Capital as a % of Sales (As Reported TTM1) | 12.2 | % | 13.4 | % | (120 | )bps | ||||||
Other | 12/31/2011 | 12/31/2010 | ||||||||||
Dividend Payments | $ | 107 | $ | 108 | ||||||||
Cash Paid for Share Repurchases2 | $ | 30 | $ | 45 | ||||||||
Common Shares Repurchased2 | 2 | 3 | ||||||||||
CAPEX | $ | 151 | $ | 137 | ||||||||
Depreciation and Amortization | $ | 263 | $ | 279 | ||||||||
Average diluted common shares outstanding | 348 | 349 | ||||||||||
Balance Sheet Information | ||||||||||||
Long-Term Debt | $ | 3,222 | $ | 4,032 | ||||||||
Notes Payable | $ | 803 | $ | 66 | ||||||||
Total Debt | $ | 4,025 | $ | 4,098 | ||||||||
Shareholders’ Equity | $ | 742 | $ | 1,582 | ||||||||
Debt to Capital | 84 | % | 72 | % | ||||||||
Cash | $ | 1,656 | $ | 1,715 |
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 - 4th Quarter 2011
Page | ||
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 and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited | |
4 | 2011 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited | |
5 | 2011 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - 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 | $ | 7,467 | $ | 1,738 | $ | 1,978 | $ | 1,998 | $ | 1,753 | $ | 7,486 | $ | 1,716 | $ | 1,933 | $ | 2,018 | $ | 1,819 | ||||||||||||||||||||||
Cost of Sales | 5,683 | 1,406 | 1,483 | 1,466 | 1,328 | 5,653 | 1,407 | 1,441 | 1,475 | 1,330 | ||||||||||||||||||||||||||||||||
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Gross Profit | 1,784 | 332 | 495 | 532 | 425 | 1,833 | 309 | 492 | 543 | 489 | ||||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) | 23.9 | % | 19.1 | % | 25.0 | % | 26.6 | % | 24.2 | % | 24.5 | % | 18.0 | % | 25.5 | % | 26.9 | % | 26.9 | % | ||||||||||||||||||||||
SG&A Expense (before lines 1, 2, 3) | 1,458 | 343 | 353 | 395 | 367 | 1,488 | 354 | 360 | 394 | 380 | ||||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) | 19.5 | % | 19.7 | % | 17.8 | % | 19.8 | % | 20.9 | % | 19.9 | % | 20.6 | % | 18.6 | % | 19.5 | % | 20.9 | % | ||||||||||||||||||||||
Operating Profit (before lines 1, 2, 3) | 326 | (11 | ) | 142 | 137 | 58 | 345 | (45 | ) | 132 | 149 | 109 | ||||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) | 4.4 | % | -0.6 | % | 7.2 | % | 6.9 | % | 3.3 | % | 4.6 | % | -2.6 | % | 6.8 | % | 7.4 | % | 6.0 | % | ||||||||||||||||||||||
1 | General Corporate Expense (GCE), Net | 118 | 23 | 27 | 36 | 32 | 110 | 26 | 27 | 27 | 30 | |||||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (including lines 1, 2, 3) | 27.7 | % | 49.5 | % | 19.3 | % | 21.8 | % | 22.8 | % | 30.7 | % | 62.8 | % | 20.0 | % | 20.9 | % | 22.5 | % | ||||||||||||||||||||||
2 | Charge for Litigation Settlement | 9 | 3 | 1 | 5 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
3 | Impairment Charges for Goodwill and Other Intangible Assets | 494 | 494 | — | — | — | 698 | 698 | — | — | — | |||||||||||||||||||||||||||||||
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Operating (Loss) Profit per F/S | $ | (295 | ) | $ | (531 | ) | $ | 114 | $ | 96 | $ | 26 | $ | (463 | ) | $ | (769 | ) | $ | 105 | $ | 122 | $ | 79 | ||||||||||||||||||
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(Loss) Income Per Common Share Attributable to | ||||||||||||||||||||||||||||||||||||||||||
Masco Corporation (Diluted): | ||||||||||||||||||||||||||||||||||||||||||
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Net (Loss) Income | $ | (1.66 | ) | $ | (1.65 | ) | $ | 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 fourth quarter of 2011 include non-cash impairment charges for goodwill and other intangible assets of $494 million pre-tax ($.96 per common share, after tax). |
• | Operating results for the first, second, third and fourth 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), $13 million pre-tax ($.02 per common share, after tax) and $61 million pre-tax ($.11 per common share, after tax), respectively. |
• | Operating results for the second, third and fourth quarters of 2011 include mark-to-market gains (losses) on metal commodity hedges of ($1) million pre-tax, ($10) million pre-tax ($.02 per common share, after tax) and $4 million pre-tax ($.01 per common share, after tax), respectively. |
• | Operating results for the second, third and fourth quarters of 2011 include litigation settlement expenses of $5 million pre-tax ($0.1 per common share, after tax), $1 million pre-tax and $3 million pre-tax ($.01 per common share, after tax), respectively. |
• | Net income (loss) for the first, second, third and fourth 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), $19 million pre-tax ($.03 per common share, after tax) and $4 million pre-tax ($.01 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 $698 million pre-tax ($1.68 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 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). |
• | 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 share, 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 Goodwill and Other Intangible Assets - Unaudited
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: | ||||||||||||||||||||
- Cabinets and Related Products | $ | 1,231 | $ | 287 | $ | 307 | $ | 330 | $ | 307 | ||||||||||
- Plumbing Products | 2,913 | 674 | 768 | 761 | 710 | |||||||||||||||
- Installation and Other Services | 1,077 | 285 | 287 | 270 | 235 | |||||||||||||||
- Decorative Architectural Products | 1,670 | 348 | 455 | 492 | 375 | |||||||||||||||
- Other Specialty Products | 576 | 144 | 161 | 145 | 126 | |||||||||||||||
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- Total | $ | 7,467 | $ | 1,738 | $ | 1,978 | $ | 1,998 | $ | 1,753 | ||||||||||
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- North America | $ | 5,669 | $ | 1,320 | $ | 1,496 | $ | 1,539 | $ | 1,314 | ||||||||||
- International, principally Europe | 1,798 | 418 | 482 | 459 | 439 | |||||||||||||||
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- Total, as above | $ | 7,467 | $ | 1,738 | $ | 1,978 | $ | 1,998 | $ | 1,753 | ||||||||||
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Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (115 | ) | $ | (38 | ) | $ | (27 | ) | $ | (21 | ) | $ | (29 | ) | |||||
- Plumbing Products | 338 | 56 | 92 | 100 | 90 | |||||||||||||||
- Installation and Other Services | (71 | ) | (6 | ) | (13 | ) | (19 | ) | (33 | ) | ||||||||||
- Decorative Architectural Products | 283 | 35 | 88 | 90 | 70 | |||||||||||||||
- Other Specialty Products | 4 | — | 14 | — | (10 | ) | ||||||||||||||
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- Total | $ | 439 | $ | 47 | $ | 154 | $ | 150 | $ | 88 | ||||||||||
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- North America | $ | 289 | $ | 35 | $ | 103 | $ | 105 | $ | 46 | ||||||||||
- International, principally Europe | 150 | 12 | 51 | 45 | 42 | |||||||||||||||
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- Total, as above | $ | 439 | $ | 47 | $ | 154 | $ | 150 | $ | 88 | ||||||||||
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General Corporate Expense (GCE), Net | 110 | 20 | 26 | 34 | 30 | |||||||||||||||
Charge for Litigation Settlement | 9 | 3 | 1 | 5 | — | |||||||||||||||
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Operating (Loss) Profit (after GCE and Adjustments) | 320 | 24 | 127 | 111 | 58 | |||||||||||||||
Other Income (Expense), Net | (177 | ) | (62 | ) | (41 | ) | (32 | ) | (42 | ) | ||||||||||
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(Loss) Income before Income Taxes | $ | 143 | $ | (38 | ) | $ | 86 | $ | 79 | $ | 16 | |||||||||
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Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -9.3 | % | -13.2 | % | -8.8 | % | -6.4 | % | -9.4 | % | ||||||||||
- Plumbing Products | 11.6 | % | 8.3 | % | 12.0 | % | 13.1 | % | 12.7 | % | ||||||||||
- Installation and Other Services | -6.6 | % | -2.1 | % | -4.5 | % | -7.0 | % | -14.0 | % | ||||||||||
- Decorative Architectural Products | 16.9 | % | 10.1 | % | 19.3 | % | 18.3 | % | 18.7 | % | ||||||||||
- Other Specialty Products | 0.7 | % | 0.0 | % | 8.7 | % | 0.0 | % | -7.9 | % | ||||||||||
- Total | 5.9 | % | 2.7 | % | 7.8 | % | 7.5 | % | 5.0 | % | ||||||||||
- North America | 5.1 | % | 2.7 | % | 6.9 | % | 6.8 | % | 3.5 | % | ||||||||||
- International, principally Europe | 8.3 | % | 2.9 | % | 10.6 | % | 9.8 | % | 9.6 | % | ||||||||||
- Total, as above | 5.9 | % | 2.7 | % | 7.8 | % | 7.5 | % | 5.0 | % |
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 3
MASCO CORPORATION
Quarterly Segment Data - 2011
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 | $ | 1,231 | $ | 287 | $ | 307 | $ | 330 | $ | 307 | ||||||||||
- Plumbing Products | 2,913 | 674 | 768 | 761 | 710 | |||||||||||||||
- Installation and Other Services | 1,077 | 285 | 287 | 270 | 235 | |||||||||||||||
- Decorative Architectural Products | 1,670 | 348 | 455 | 492 | 375 | |||||||||||||||
- Other Specialty Products | 576 | 144 | 161 | 145 | 126 | |||||||||||||||
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- Total | $ | 7,467 | $ | 1,738 | $ | 1,978 | $ | 1,998 | $ | 1,753 | ||||||||||
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- North America | $ | 5,669 | $ | 1,320 | $ | 1,496 | $ | 1,539 | $ | 1,314 | ||||||||||
- International, principally Europe | 1,798 | 418 | 482 | 459 | 439 | |||||||||||||||
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- Total, as above | $ | 7,467 | $ | 1,738 | $ | 1,978 | $ | 1,998 | $ | 1,753 | ||||||||||
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Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (206 | ) | $ | (95 | ) | $ | (34 | ) | $ | (27 | ) | $ | (50 | ) | |||||
- Plumbing Products | 322 | 52 | 91 | 95 | 84 | |||||||||||||||
- Installation and Other Services | (79 | ) | (8 | ) | (15 | ) | (21 | ) | (35 | ) | ||||||||||
- Decorative Architectural Products | 196 | (51 | ) | 88 | 90 | 69 | ||||||||||||||
- Other Specialty Products | (401 | ) | (403 | ) | 12 | — | (10 | ) | ||||||||||||
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- Total | $ | (168 | ) | $ | (505 | ) | $ | 142 | $ | 137 | $ | 58 | ||||||||
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- North America | $ | (259 | ) | $ | (459 | ) | $ | 92 | $ | 92 | $ | 16 | ||||||||
- International, principally Europe | 91 | (46 | ) | 50 | 45 | 42 | ||||||||||||||
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- Total, as above | $ | (168 | ) | $ | (505 | ) | $ | 142 | $ | 137 | $ | 58 | ||||||||
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General Corporate Expense (GCE), Net | 118 | 23 | 27 | 36 | 32 | |||||||||||||||
Charge for Litigation Settlement | 9 | 3 | 1 | 5 | — | |||||||||||||||
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Operating (Loss) Profit (after GCE and Adjustments) | (295 | ) | (531 | ) | 114 | 96 | 26 | |||||||||||||
Other Income (Expense), Net | (177 | ) | (62 | ) | (41 | ) | (32 | ) | (42 | ) | ||||||||||
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(Loss) Income before Income Taxes | $ | (472 | ) | $ | (593 | ) | $ | 73 | $ | 64 | $ | (16 | ) | |||||||
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Margins: | ||||||||||||||||||||
- Cabinets and Related Products | -16.7 | % | -33.1 | % | -11.1 | % | -8.2 | % | -16.3 | % | ||||||||||
- Plumbing Products | 11.1 | % | 7.7 | % | 11.8 | % | 12.5 | % | 11.8 | % | ||||||||||
- Installation and Other Services | -7.3 | % | -2.8 | % | -5.2 | % | -7.8 | % | -14.9 | % | ||||||||||
- Decorative Architectural Products | 11.7 | % | -14.7 | % | 19.3 | % | 18.3 | % | 18.4 | % | ||||||||||
- Other Specialty Products | -69.6 | % | -279.9 | % | 7.5 | % | 0.0 | % | -7.9 | % | ||||||||||
- Total | -2.2 | % | -29.1 | % | 7.2 | % | 6.9 | % | 3.3 | % | ||||||||||
- North America | -4.6 | % | -34.8 | % | 6.1 | % | 6.0 | % | 1.2 | % | ||||||||||
- International, principally Europe | 5.1 | % | -11.0 | % | 10.4 | % | 9.8 | % | 9.6 | % | ||||||||||
- Total, as above | -2.2 | % | -29.1 | % | 7.2 | % | 6.9 | % | 3.3 | % |
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 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 | $ | 47 | $ | 13 | $ | 7 | $ | 6 | $ | 21 | ||||||||||
- Plumbing Products | 15 | 3 | 1 | 5 | 6 | |||||||||||||||
- Installation and Other Services | 8 | 2 | 2 | 2 | 2 | |||||||||||||||
- Decorative Architectural Products | 12 | 11 | — | — | 1 | |||||||||||||||
- Other Specialty Products | 31 | 29 | 2 | — | — | |||||||||||||||
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- Total | $ | 113 | $ | 58 | $ | 12 | $ | 13 | $ | 30 | ||||||||||
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- North America | $ | 98 | $ | 44 | $ | 11 | $ | 13 | $ | 30 | ||||||||||
- International, principally Europe | 15 | 14 | 1 | — | — | |||||||||||||||
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- Total, as above | $ | 113 | $ | 58 | $ | 12 | $ | 13 | $ | 30 | ||||||||||
General Corporate Expense (GCE), Net | 8 | 3 | 1 | 2 | 2 | |||||||||||||||
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- Total | $ | 121 | $ | 61 | $ | 13 | $ | 15 | $ | 32 | ||||||||||
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Goodwill and Other Intangible Assets Impairment | ||||||||||||||||||||
- Cabinets and Related Products | $ | 44 | $ | 44 | $ | — | $ | — | $ | — | ||||||||||
- Plumbing Products | 1 | 1 | — | — | — | |||||||||||||||
- Installation and Other Services | — | — | — | — | — | |||||||||||||||
- Decorative Architectural Products | 75 | 75 | — | — | — | |||||||||||||||
- Other Specialty Products | 374 | 374 | — | — | — | |||||||||||||||
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- Total | $ | 494 | $ | 494 | $ | — | $ | — | $ | — | ||||||||||
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- North America | $ | 450 | $ | 450 | $ | — | $ | — | $ | — | ||||||||||
- International, principally Europe | 44 | 44 | — | — | — | |||||||||||||||
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- Total, as above | $ | 494 | $ | 494 | $ | — | $ | — | $ | — | ||||||||||
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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 | 1,041 | 254 | 268 | 279 | 240 | |||||||||||||||
- Decorative Architectural Products | 1,693 | 336 | 463 | 505 | 389 | |||||||||||||||
- Other Specialty Products | 596 | 161 | 159 | 152 | 124 | |||||||||||||||
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- Total | $ | 7,486 | $ | 1,716 | $ | 1,933 | $ | 2,018 | $ | 1,819 | ||||||||||
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- North America | $ | 5,823 | $ | 1,293 | $ | 1,504 | $ | 1,629 | $ | 1,397 | ||||||||||
- International, principally Europe | 1,663 | 423 | 429 | 389 | 422 | |||||||||||||||
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|
|
|
| |||||||||||
- Total, as above | $ | 7,486 | $ | 1,716 | $ | 1,933 | $ | 2,018 | $ | 1,819 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (71 | ) | $ | (46 | ) | $ | (27 | ) | $ | 6 | $ | (4 | ) | ||||||
- Plumbing Products | 347 | 70 | 100 | 92 | 85 | |||||||||||||||
- Installation and Other Services | (93 | ) | (19 | ) | (17 | ) | (18 | ) | (39 | ) | ||||||||||
- Decorative Architectural Products | 350 | 50 | 104 | 109 | 87 | |||||||||||||||
- Other Specialty Products | 19 | 3 | 11 | 11 | (6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 552 | $ | 58 | $ | 171 | $ | 200 | $ | 123 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 386 | $ | 27 | $ | 119 | $ | 163 | $ | 77 | ||||||||||
- International, principally Europe | 166 | 31 | 52 | 37 | 46 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 552 | $ | 58 | $ | 171 | $ | 200 | $ | 123 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
General Corporate Expense (GCE), Net | 109 | 25 | 27 | 27 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating Profit (after GCE and Adjustments) | 443 | 33 | 144 | 173 | 93 | |||||||||||||||
Other Income (Expense), Net | (278 | ) | (55 | ) | (64 | ) | (103 | ) | (56 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
(Loss) Income before Income Taxes | $ | 165 | $ | (22 | ) | $ | 80 | $ | 70 | $ | 37 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
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 | -8.9 | % | -7.5 | % | -6.3 | % | -6.5 | % | -16.3 | % | ||||||||||
- 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 | 7.4 | % | 3.4 | % | 8.8 | % | 9.9 | % | 6.8 | % | ||||||||||
- North America | 6.6 | % | 2.1 | % | 7.9 | % | 10.0 | % | 5.5 | % | ||||||||||
- International, principally Europe | 10.0 | % | 7.3 | % | 12.1 | % | 9.5 | % | 10.9 | % | ||||||||||
- Total, as above | 7.4 | % | 3.4 | % | 8.8 | % | 9.9 | % | 6.8 | % |
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 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 | 1,041 | 254 | 268 | 279 | 240 | |||||||||||||||
- Decorative Architectural Products | 1,693 | 336 | 463 | 505 | 389 | |||||||||||||||
- Other Specialty Products | 596 | 161 | 159 | 152 | 124 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 7,486 | $ | 1,716 | $ | 1,933 | $ | 2,018 | $ | 1,819 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 5,823 | $ | 1,293 | $ | 1,504 | $ | 1,629 | $ | 1,397 | ||||||||||
- International, principally Europe | 1,663 | 423 | 429 | 389 | 422 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 7,486 | $ | 1,716 | $ | 1,933 | $ | 2,018 | $ | 1,819 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating (Loss) Profit: | ||||||||||||||||||||
- Cabinets and Related Products | $ | (250 | ) | $ | (137 | ) | $ | (61 | ) | $ | (37 | ) | $ | (15 | ) | |||||
- Plumbing Products | 331 | 64 | 97 | 86 | 84 | |||||||||||||||
- Installation and Other Services | (798 | ) | (718 | ) | (19 | ) | (20 | ) | (41 | ) | ||||||||||
- Decorative Architectural Products | 345 | 45 | 104 | 109 | 87 | |||||||||||||||
- Other Specialty Products | 19 | 3 | 11 | 11 | (6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | (353 | ) | $ | (743 | ) | $ | 132 | $ | 149 | $ | 109 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | (507 | ) | $ | (771 | ) | $ | 82 | $ | 117 | $ | 65 | ||||||||
- International, principally Europe | 154 | 28 | 50 | 32 | 44 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | (353 | ) | $ | (743 | ) | $ | 132 | $ | 149 | $ | 109 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
General Corporate Expense (GCE), Net | 110 | 26 | 27 | 27 | 30 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Operating (Loss) Profit (after GCE and Adjustments) | (463 | ) | (769 | ) | 105 | 122 | 79 | |||||||||||||
Other Income (Expense), Net | (278 | ) | (55 | ) | (64 | ) | (103 | ) | (56 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
(Loss) Income before Income Taxes | $ | (741 | ) | $ | (824 | ) | $ | 41 | $ | 19 | $ | 23 | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
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 | -76.7 | % | -282.7 | % | -7.1 | % | -7.2 | % | -17.1 | % | ||||||||||
- 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 | -4.7 | % | -43.3 | % | 6.8 | % | 7.4 | % | 6.0 | % | ||||||||||
- North America | -8.7 | % | -59.6 | % | 5.5 | % | 7.2 | % | 4.7 | % | ||||||||||
- International, principally Europe | 9.3 | % | 6.6 | % | 11.7 | % | 8.2 | % | 10.4 | % | ||||||||||
- Total, as above | -4.7 | % | -43.3 | % | 6.8 | % | 7.4 | % | 6.0 | % |
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 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- 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 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Goodwill and Other Intangible Assets Impairment | ||||||||||||||||||||
- Cabinets and Related Products | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
- Plumbing Products | 1 | 1 | — | — | — | |||||||||||||||
- Installation and Other Services | 697 | 697 | — | — | — | |||||||||||||||
- Decorative Architectural Products | — | — | — | — | — | |||||||||||||||
- Other Specialty Products | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total | $ | 698 | $ | 698 | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- North America | $ | 698 | $ | 698 | $ | — | $ | — | $ | — | ||||||||||
- International, principally Europe | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
- Total, as above | $ | 698 | $ | 698 | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
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 | $ | (254 | ) | $ | (64 | ) | $ | (63 | ) | $ | (64 | ) | $ | (63 | ) | $ | (251 | ) | $ | (63 | ) | $ | (63 | ) | $ | (67 | ) | $ | (58 | ) | ||||||||||
Income from Cash and Cash Investments | 8 | 3 | 2 | 1 | 2 | 6 | 2 | 2 | 1 | 1 | ||||||||||||||||||||||||||||||
Other Interest Income | 1 | — | 1 | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||
Realized Gains (Losses) from Financial Investments, Net | 73 | 4 | 19 | 33 | 17 | 9 | 11 | (3 | ) | 1 | — | |||||||||||||||||||||||||||||
Impairment Charges for Financial Investments | — | — | — | — | — | (34 | ) | (1 | ) | — | (33 | ) | — | |||||||||||||||||||||||||||
Other, Net | (5 | ) | (5 | ) | — | (2 | ) | 2 | (9 | ) | (4 | ) | — | (5 | ) | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Other Income (Expense), Net | $ | (177 | ) | $ | (62 | ) | $ | (41 | ) | $ | (32 | ) | $ | (42 | ) | $ | (278 | ) | $ | (55 | ) | $ | (64 | ) | $ | (103 | ) | $ | (56 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
• | Data exclude discontinued operations. |
• | Other, Net, in 2011 includes currency gains (losses) of $2 million, $(3) million, $1 million, and $(5) million for the first, second, third, and fourth 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)
December 31, | December 31, | |||||||
2011 | 2010 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Investments | $ | 1,656 | $ | 1,715 | ||||
Receivables | 914 | 888 | ||||||
Inventories | 769 | 732 | ||||||
Prepaid Expenses and Other | 70 | 129 | ||||||
Assets held for sale | 20 | — | ||||||
|
|
|
| |||||
Total Current Assets | 3,429 | 3,464 | ||||||
Property and Equipment, Net | 1,567 | 1,737 | ||||||
Goodwill | 1,891 | 2,383 | ||||||
Other Intangible Assets, Net | 196 | 269 | ||||||
Other Assets | 209 | 287 | ||||||
Assets Held for Sale | 5 | — | ||||||
|
|
|
| |||||
Total Assets | $ | 7,297 | $ | 8,140 | ||||
|
|
|
| |||||
Liabilities | ||||||||
Current Liabilities: | ||||||||
Notes Payable | $ | 803 | $ | 66 | ||||
Accounts Payable | 770 | 602 | ||||||
Accrued Liabilities | 782 | 819 | ||||||
Liabilities Held for Sale | 8 | — | ||||||
|
|
|
| |||||
Total Current Liabilities | 2,363 | 1,487 | ||||||
Long-Term Debt | 3,222 | 4,032 | ||||||
Deferred Income Taxes and Other | 970 | 1,039 | ||||||
|
|
|
| |||||
Total Liabilities | 6,555 | 6,558 | ||||||
Shareholders’ Equity | 742 | 1,582 | ||||||
|
|
|
| |||||
Total Liabilities and Shareholders’ Equity | $ | 7,297 | $ | 8,140 | ||||
|
|
|
|
Page 10
MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation - Unaudited
(dollars in millions)
Three Months Ended December 31, | ||||||||||||
2011 | 2010 | % r | ||||||||||
Net Sales, As Reported | $ | 1,738 | $ | 1,716 | 1 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 4 | — | ||||||||||
|
|
|
| |||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,742 | $ | 1,716 | 2 | % | ||||||
|
|
|
| |||||||||
North America Net Sales, As Reported | $ | 1,320 | $ | 1,293 | 2 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 1 | — | ||||||||||
|
|
|
| |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,321 | $ | 1,293 | 2 | % | ||||||
|
|
|
| |||||||||
International Net Sales, As Reported | $ | 418 | $ | 423 | -1 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | 3 | — | ||||||||||
|
|
|
| |||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 421 | $ | 423 | 0 | % | ||||||
|
|
|
| |||||||||
Twelve Months Ended December 31, | ||||||||||||
2011 | 2010 | % r | ||||||||||
As Reported | $ | 7,467 | $ | 7,486 | 0 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (88 | ) | — | |||||||||
|
|
|
| |||||||||
Net Sales, Excluding Acquisitions and Currency Translation | $ | 7,379 | $ | 7,486 | -1 | % | ||||||
|
|
|
| |||||||||
North America Net Sales, As Reported | $ | 5,669 | $ | 5,823 | -3 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (9 | ) | — | |||||||||
|
|
|
| |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation | $ | 5,660 | $ | 5,823 | -3 | % | ||||||
|
|
|
| |||||||||
International Net Sales, As Reported | $ | 1,798 | $ | 1,663 | 8 | % | ||||||
- Acquisitions | — | — | ||||||||||
- Currency Translation | (79 | ) | — | |||||||||
|
|
|
| |||||||||
International Net Sales, Excluding Acquisitions and Currency Translation | $ | 1,719 | $ | 1,663 | 3 | % | ||||||
|
|
|
|
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 December 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Loss, As Reported | $ | (531 | ) | -30.6 | % | $ | (769 | ) | -44.8 | % | ||||||
Business Rationalizations and Other Initiatives | 61 | 104 | ||||||||||||||
Impairment Charges for Goodwill and Other Intangible Assets | 494 | 698 | ||||||||||||||
Charges for Litigation Settlements | 3 | — | ||||||||||||||
|
|
|
| |||||||||||||
Operating Profit, As Reconciled | $ | 27 | 1.6 | % | $ | 33 | 1.9 | % | ||||||||
|
|
|
| |||||||||||||
Twelve Months Ended December 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Loss, As Reported | $ | (295 | ) | -4.0 | % | $ | (463 | ) | -6.2 | % | ||||||
Business Rationalizations and Other Initiatives | 121 | 208 | ||||||||||||||
Impairment Charges for Goodwill and Other Intangible Assets | 494 | 698 | ||||||||||||||
Charges for Litigation Settlements | 9 | — | ||||||||||||||
|
|
|
| |||||||||||||
Operating Profit, As Reconciled | $ | 329 | 4.4 | % | $ | 443 | 5.9 | % | ||||||||
|
|
|
|
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