EXHIBIT 99.2
MASCO CORPORATION 2003 FIRST QUARTER
Page
1 CONDENSED STATEMENT OF INCOME - 2003 & 2002 QUARTERS
2 SALES BY SEGMENT AND GEOGRAPHIC AREA - 1st QUARTER 2003 & 2002
3 2003 QUARTERLY SEGMENT DATA
4 2002 QUARTERLY SEGMENT DATA
5 OTHER INCOME (EXPENSE)
6 CONDENSED STATEMENT OF INCOME 1st QUARTER 2003 & 2002
7 CONDENSED CONSOLIDATED BALANCE SHEET
GAAP RECONCILIATIONS:
8 - Sales Growth excluding acquisitions, divestitures & currency
9 - Operating Profit, Net Income and E.P.S. for the year ended December
31, 2002
MASCO CORPORATION
CONDENSED STATEMENT OF INCOME
2003 and 2002 QUARTERLY
(IN THOUSANDS EXCEPT PER SHARE DATA)
2003 2002 ACTUAL
---------------------- -------------------------
1ST
QTR. YEAR
---------------------- ------------------------
Net Sales:
- North America $ 1,993,000 $ 7,956,700
- International 505,300 1,462,700
---------------------- ------------------------
- Combined 2,498,300 9,419,400
----------------------
Cost of Sales 1,744,540 6,450,590
---------------------- ------------------------
Gross Profit 753,760 2,968,810
(G.P. Margin) 30.2% 31.5%
---------------------- ------------------------
S,G & A Expense: (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 403,380 1,408,540
S,G&A Pct. to Sales 16.1% 15.0%
---------------------- ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 350,380 1,560,270
(O.P. Margin) 14.0% 16.6%
- North America 283,560 1,361,270
(Margin) 14.2% 17.1%
- International 66,820 199,000
(Margin) 13.2% 13.6%
---------------------- ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 350,380 1,560,270
(Margin) 14.0% 16.6%
---------------------- ------------------------
General Corp. Expense 28,000 98,000
---------------------- ------------------------
S,G & A Pct. to Sales (Incl. Gen'l Corp. Exp.) 18.1% 16.0%
---------------------- ------------------------
(Income)/Charge Regarding Litigation Settlement, Net (13,520) 146,800
---------------------- ------------------------
Accelerated Benefit Payments 21,000 -
---------------------- ------------------------
Reversal of a Charge for the Planned
Disposition of a Business - (15,630)
---------------------- ------------------------
Operating Profit per F/S $ 314,900 $ 1,331,100
======================== ========================
Earnings Per Common Share (Diluted) $ 0.32 $ 1.33
Goodwill impairment charge - (0.18)
Earnings Per Common Share (Diluted) - Reported $ 0.32 $ 1.15
---------------------- ------------------------
2002 ACTUAL
---------------------------------------------------
4TH 3RD
QTR. QTR.
------------ ------------
Net Sales:
- North America $ 2,074,700 $ 2,114,000
- International 412,700 404,000
------------------------- ------------------------
- Combined 2,487,400 2,518,000
Cost of Sales 1,729,850 1,717,040
------------------------- ------------------------
Gross Profit 757,550 800,960
(G.P. Margin) 30.5% 31.8%
------------------------- ------------------------
S,G & A Expense: (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 377,480 354,460
S,G&A Pct. to Sales 15.2% 14.1%
------------------------- ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 380,070 446,500
(O.P. Margin) 15.3% 17.7%
- North America 321,570 390,300
(Margin) 15.5% 18.5%
- International 58,500 56,200
(Margin) 14.2% 13.9%
------------------------- ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 380,070 446,500
(Margin) 15.3% 17.7%
------------------------- ------------------------
General Corp. Expense 25,000 25,000
------------------------- ------------------------
S,G & A Pct. to Sales (Incl. Gen'l Corp. Exp.) 16.2% 15.1%
------------------------- ------------------------
(Income)/Charge Regarding Litigation Settlement, Net (19,200) 166,000
------------------------- ------------------------
Accelerated Benefit Payments - -
------------------------- ------------------------
Reversal of a Charge for the Planned
Disposition of a Business (15,630) -
------------------------- ------------------------
Operating Profit per F/S $ 389,900 $ 255,500
========================= ========================
Earnings Per Common Share (Diluted) $ 0.37 $ 0.24
Goodwill impairment charge - -
Earnings Per Common Share (Diluted) - Reported $ 0.37 $ 0.24
------------------------- ------------------------
2002 ACTUAL
----------------------------------------------------
2ND 1ST
QTR. QTR.
------------ ------------
Net Sales:
- North America $ 1,973,000 $ 1,795,000
- International 341,000 305,000
------------------------- -----------------------
- Combined 2,314,000 2,100,000
Cost of Sales 1,549,650 1,454,050
------------------------- -----------------------
Gross Profit 764,350 645,950
(G.P. Margin) 33.0% 30.8%
------------------------- -----------------------
S,G & A Expense: (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 345,250 331,350
S,G&A Pct. to Sales 14.9% 15.8%
------------------------- -----------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 419,100 314,600
(O.P. Margin) 18.1% 15.0%
- North America 372,700 276,700
(Margin) 18.9% 15.4%
- International 46,400 37,900
(Margin) 13.6% 12.4%
------------------------- -----------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
& Benefit Payments) 419,100 314,600
(Margin) 18.1% 15.0%
------------------------- -----------------------
General Corp. Expense 24,000 24,000
------------------------- -----------------------
S,G & A Pct. to Sales (Incl. Gen'l Corp. Exp.) 16.0% 16.9%
------------------------- -----------------------
(Income)/Charge Regarding Litigation Settlement, Net - -
------------------------- -----------------------
Accelerated Benefit Payments - -
------------------------- -----------------------
Reversal of a Charge for the Planned
Disposition of a Business - -
------------------------- -----------------------
Operating Profit per F/S $ 395,100 $ 290,600
========================= =======================
Earnings Per Common Share (Diluted) $ 0.43 $ 0.31
Goodwill impairment charge - (0.19)
Earnings Per Common Share (Diluted) - Reported $ 0.43 $ 0.12
------------------------- ------------------------
Notes:
- - Due to the unexpected passing of the Company's President and Chief Operating
Officer, certain benefits were accelerated and expensed in the first quarter
of 2003.
- - Data for 2002 exclude a first quarter, non-cash goodwill accounting change
charge effective January 1, 2002 of $.19 per common share. In addition, per
common share amounts for the four quarters do not total to the per common
share amount for the year due to the timing of capital stock transactions and
the effect of contingently issuable shares.
- - Earnings per common share in the third quarter of 2002 include a $.20 charge
for a litigation settlement.
- - Earnings in the fourth quarter of 2002 include approximately $35 million of
income related to insurance proceeds and the reversal of a charge related to
the planned disposition of a business and approximately $36 million of charges
related to non-operating asset impairments and realized losses on marketable
securities.
- - Excluding the effect of unusual items (principally the Behr litigation
settlement charge, net and a non-cash accounting change charge related to
goodwill impairment), net income for the year 2002 was $780 million or $1.52
per common share (see page 9 for the GAAP reconciliation).
MASCO CORPORATION
SALES BY SEGMENT AND GEOGRAPHIC AREA
2003 and 2002 FIRST QUARTERS
(IN MILLIONS)
First Quarter 1st Qtr '03
------------------------------------------
vs.
2003 2002 1st Qtr '02
---------------- ---------------- ------------------
Cabinets & Related Products $ 699 $ 656 + 7%
Plumbing Products 613 464 + 32%
Installation & Other Services 542 390 + 39%
Decorative Architectural Products 360 359 0%
Other Specialty Products 284 231 + 23%
------------- -------------
Total $ 2,498 $ 2,100 + 19%
============= =============
North America $ 1,993 $ 1,795 + 11%
International 505 305 + 66%
------------- -------------
Total, as above $ 2,498 $ 2,100 + 19%
============= =============
Excluding acquisitions and divestitures, net sales increased 5 percent and
international sales in local currencies were flat compared with the first
quarter of 2002 (see page 8 for the GAAP reconciliation).
MASCO CORPORATION
SEGMENT DATA - QUARTERLY 2003
(IN MILLIONS)
YEAR 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
---- -------- -------- -------- --------
NET SALES:
- Cabinets and Related Products $ $ $ $ $ 699
- Plumbing Products 613
- Installation and Other Services 542
- Decorative Architectural Products 360
- Other Specialty Products 284
------------ ------------- ------------ ------------- -------------
- TOTAL 2,498
============ ============= ============ ============= =============
- North America 1,993
- International, principally Europe 505
------------ ------------- ------------ ------------- -------------
- TOTAL, AS ABOVE 2,498
============ ============= ============ ============= =============
OPERATING PROFIT:
- Cabinets and Related Products 84
- Plumbing Products 84
- Installation and Other Services 77
- Decorative Architectural Products 62
- Other Specialty Products 43
------------ ------------- ------------ ------------- -------------
- TOTAL 350
============ ============= ============ ============= =============
- North America 283
- International, principally Europe 67
------------ ------------- ------------ ------------- -------------
- TOTAL, AS ABOVE 350
============ ============= ============ ============= =============
GENERAL CORP. EXPENSE 28
------------ ------------- ------------ ------------- -------------
(INCOME) RELATED TO LITIGATION SETTLEMENT, NET (14)
------------ ------------- ------------ ------------- -------------
ACCELERATED BENEFIT PAYMENTS 21
------------ ------------- ------------ ------------- -------------
OPERATING PROFIT, AFTER
GENERAL CORP. EXPENSE AND ADJUSTMENTS 315
OTHER INCOME (EXPENSE), NET (55)
------------ ------------- ------------ ------------- -------------
INCOME BEFORE TAX AND MINORITY INTEREST $ $ $ $ $ 260
============ ============= ============ ============= =============
MARGINS:
- Cabinets and Related Products 12.0%
- Plumbing Products 13.7%
- Installation and Other Services 14.2%
- Decorative Architectural Products 17.2%
- Other Specialty Products 15.1%
- TOTAL 14.0%
- North America 14.2%
- International, principally Europe 13.3%
- TOTAL, AS ABOVE 14.0%
Notes:
- - Operating profit margins above are before general corporate expense, income
related to a litigation settlement (which relates to the Decorative
Architectural Products segment) and accelerated benefit payments.
- - Due to the unexpected passing of the Company's President and Chief Operating
Officer, certain benefits were accelerated and expensed in the first quarter
of 2003.
MASCO CORPORATION
SEGMENT DATA - QUARTERLY 2002
(IN MILLIONS)
YEAR 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
---- -------- -------- -------- --------
NET SALES:
- Cabinets and Related Products $ 2,798 $ 722 $ 738 $ 682 $ 656
- Plumbing Products 2,031 523 535 509 464
- Installation and Other Services 1,845 568 489 398 390
- Decorative Architectural Products 1,599 361 439 440 359
- Other Specialty Products 1,146 313 317 285 231
------------ ------------ ------------ ------------ ------------
- TOTAL 9,419 2,487 2,518 2,314 2,100
============ ============ ============ ============ ============
- North America 7,956 2,074 2,114 1,973 1,795
- International, principally Europe 1,463 413 404 341 305
------------ ------------ ------------ ------------ ------------
- TOTAL, AS ABOVE 9,419 2,487 2,518 2,314 2,100
============ ============ ============ ============ ============
OPERATING PROFIT:
- Cabinets and Related Products 379 98 114 100 67
- Plumbing Products 334 92 83 87 72
- Installation and Other Services 304 87 82 71 64
- Decorative Architectural Products 338 63 97 105 73
- Other Specialty Products 221 56 70 56 39
------------ ------------ ------------ ------------ ------------
- TOTAL 1,576 396 446 419 315
============ ============ ============ ============ ============
- North America 1,377 337 390 373 277
- International, principally Europe 199 59 56 46 38
------------ ------------ ------------ ------------ ------------
- TOTAL, AS ABOVE 1,576 396 446 419 315
============ ============ ============ ============ ============
GENERAL CORP. EXPENSE 98 25 25 24 24
------------ ------------ ------------ ------------ ------------
CHARGE FOR LITIGATION SETTLEMENT, NET 147 (19) 166 - -
------------ ------------ ------------ ------------ ------------
OPERATING PROFIT, AFTER
GENERAL CORP. EXPENSE AND CHARGE 1,331 390 255 395 291
OTHER INCOME (EXPENSE), NET (300) (91) (76) (70) (63)
------------ ------------ ------------ ------------ ------------
INCOME BEFORE TAX AND ACCTG. CHANGE $ 1,031 $ 299 $ 179 $ 325 $ 228
============ ============ ============ ============ ============
MARGINS:
- Cabinets and Related Products 13.5% 13.6% 15.4% 14.7% 10.2%
- Plumbing Products 16.4% 17.6% 15.5% 17.1% 15.5%
- Installation and Other Services 16.5% 15.3% 16.8% 17.8% 16.4%
- Decorative Architectural Products 21.1% 17.5% 22.1% 23.9% 20.3%
- Other Specialty Products 19.3% 17.9% 22.1% 19.6% 16.9%
- TOTAL 16.7% 15.9% 17.7% 18.1% 15.0%
- North America 17.3% 16.2% 18.4% 18.9% 15.4%
- International, principally Europe 13.6% 14.3% 13.9% 13.5% 12.5%
- TOTAL, AS ABOVE 16.7% 15.9% 17.7% 18.1% 15.0%
Notes:
- - Operating profit margins above are before both general corporate expense and
a charge for litigation settlement, net, which relates to the Decorative
Architectural Products segment.
- - Included in operating profit of the Plumbing Products segment for the fourth
quarter and year is $15.6 million of income related to the reversal of a
charge for the planned disposition of a business.
MASCO CORPORATION
OTHER INCOME (EXPENSE)
2003 AND 2002 QUARTERS
(IN MILLIONS)
2003 ACTUAL
---------------------------------------------------------------------------------------------------
4TH 3RD 2ND 1ST
YEAR QTR. QTR. QTR. QTR.
---- ---- ---- ---- ----
Interest Expense $ $ $ $ $ (67.6)
Impairment Charge for
Long-Term Investments - - -
Income from Cash and
Cash Investments 2.5
Other Interest Income 1.9
Equity Earnings, Net 0.5
Other, Net (A) 7.7
----------- ----------- ----------- ----------- -----------
Total Other Income (Expense) $ $ - $ - $ - $ (55.0)
=========== =========== =========== =========== ===========
2002 ACTUAL
---------------------------------------------------------------------------------------------------
4TH 3RD 2ND 1ST
YEAR QTR. QTR. QTR. QTR.
---- ---- ---- ---- ----
Interest Expense $ (236.9) $ (66.6) $ (61.0) $ (54.2) $ (55.1)
Impairment Charge for
Long-Term Investments (24.1) (24.1) - - -
Income from Cash and
Cash Investments 7.9 3.9 2.1 1.1 0.8
Other Interest Income 6.1 2.7 1.9 0.6 0.9
Equity Earnings, Net 14.2 1.2 5.7 5.4 1.9
Other, Net (A) (67.3) (7.5) (25.0) (23.3) (11.5)
----------- ------------ ----------- ----------- ----------
Total Other Income (Expense) $ (300.1) $ (90.4) $ (76.3) $ (70.4) $ (63.0)
=========== ============ =========== =========== ==========
Note:
(A) Other, net for the quarter ended March 31, 2003 includes realized gains on
the sale of marketable securities of approximately $8 million.
MASCO CORPORATION
CONDENSED STATEMENT OF INCOME FOR THREE MONTHS ENDED
3/31/03 AND 3/31/02
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
Three Months Ended
March 31
----------------------------------------
Line No. % Change 2003 2002
- -------- ------------ ---------------- ----------------
1 Net Sales 19% $ 2,498,300 $ 2,100,000
2 Cost of Sales 20% 1,744,540 1,454,050
---------------- ----------------
3 Gross Profit 17% 753,760 645,950
---------------- ----------------
Operating Profit:
4 - Before Gen'l Corp. Exp., Litigation Income
& Benefit Payments (3-8) 11% 350,380 314,600
5 - After Gen'l Corp. Exp., Litigation Income
and Benefit Payments (3-9-10) 8% 314,900 290,600
---------------- ---------------
S,G&A Exp.:
6 - Gen'l Corp. Exp. 17% 28,000 24,000
7 - Accelerated Benefit Payments (A) 21,000 -
8 - All Other 22% 403,380 331,350
---------------- ----------------
9 - Total S,G&A 27% 452,380 355,350
---------------- ----------------
10 (Income) Related to Litigation Settlement (B) (13,520) -
11 Other Income (Expense), Net -13% (55,050) (63,000)
---------------- -----------------
12 Income Before Income Taxes, Minority Interest
and Cumulative Effect of Accounting Change, net (5-11) 14% 259,850 227,600
13 Income Taxes 17% 90,400 77,400
(Tax Rate) 34.8% 34.0%
---------------- -----------------
14 Income Before Minority Interest and
Cumulative Effect of Accounting Change, net 13% 169,450 150,200
15 Minority interest (C) (3,650) -
16 Cumulative Effect of Accounting Change, net - (92,400)
---------------- ----------------
17 Net Income 187% $ 165,800 $ 57,800
================ ================
Earning Per Common Share (Diluted) 167% $ 0.32 $ 0.12
================ ================
Average (Diluted) Common Shares 7% 519,600 483,900
As a Percent of Sales
Three Months Ended
March 31
---------------------------------------------
Line No. 2003 2002
- -------- ------------------ ----------------
1 Net Sales 100.0% 100.0%
2 Cost of Sales 69.8% 69.2%
---------- ----------
3 Gross Profit 30.2% 30.8%
---------- ----------
Operating Profit:
4 - Before Gen'l Corp. Exp., Litigation Income
& Benefit Payments (3-8) 14.0% 15.0%
5 - After Gen'l Corp. Exp., Litigation Income
and Benefit Payments (3-9-10) 12.6% 13.8%
---------- ----------
S,G&A Exp.:
6 - Gen'l Corp. Exp. 1.1% 1.1%
7 - Accelerated Benefit Payments (A) 0.8% -
8 - All Other 16.2% 15.8%
---------- ----------
9 - Total S,G&A 18.1% 16.9%
---------- ----------
10 (Income) Related to Litigation Settlement (B) -0.5% -
11 Other Income (Expense), Net -2.2% -3.0%
---------- ----------
12 Income Before Income Taxes, Minority Interest
and Cumulative Effect of Accounting Change, net (5-11) 10.4% 10.8%
13 Income Taxes 3.6% 3.6%
(Tax Rate) ---------- ----------
6.8% 7.2%
14 Income Before Minority Interest and
Cumulative Effect of Accounting Change, net
15 Minority interest (C) -0.2% 0.0%
16 Cumulative Effect of Accounting Change, net 0.0% -4.4%
---------- ----------
17 Net Income 6.6% 2.8%
========== ==========
Earning Per Common Share (Diluted)
Average (Diluted) Common Shares
Notes:
(A) Due to the unexpected passing of the Company's President
and Chief Operating Officer, certain benefits were accelerated
and expensed in the first quarter of 2003.
(B) The first quarter of 2003 includes $13.5 million of income
related to insurance proceeds for a litigation settlement
regarding the Company's subsidiary, Behr Process Corporation.
(C) The Company owns 64% of Hansgrohe AG; this line is the
reduction of income to reflect the minority interest.
MASCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
March 31, December 31, March 31,
ASSETS 2003 2002 2002
----------------- ----------------- ----------------
Current Assets:
Cash and Cash Investments $ 748,450 $ 1,066,570 $ 238,160
Receivables 1,683,740 1,546,360 1,377,180
Inventories 1,123,200 1,055,620 897,250
Prepaid Expenses and Other 272,550 281,220 171,000
----------------- ----------------- ----------------
Total Current Assets 3,827,940 3,949,770 2,683,590
Equity Investments 70,110 67,810 83,800
Property and Equipment, Net 2,364,930 2,315,060 2,009,720
Goodwill, Net 4,346,310 4,297,150 3,271,220
Other Intangible Assets, Net 351,710 353,870 308,600
Other Noncurrent Assets 1,009,320 1,066,770 985,960
----------------- ----------------- ----------------
$ 11,970,320 $ 12,050,430 $ 9,342,890
================= ================= ================
LIABILITIES
Current Liabilities:
Notes Payable $ 301,050 $ 321,180 $ 130,690
Accounts Payable 657,150 541,590 402,540
Accrued Liabilities 988,600 1,069,680 782,720
----------------- ----------------- ----------------
Total Current Liabilities 1,946,800 1,932,450 1,315,950
Long-Term Debt 4,321,770 4,316,470 3,576,350
Deferred Taxes and Other 502,630 507,670 217,760
SHAREHOLDERS' EQUITY 5,199,120 5,293,840 4,232,830
----------------- ----------------- ----------------
$ 11,970,320 $ 12,050,430 $ 9,342,890
================= ================= ================
MASCO CORPORATION
GAAP SALES RECONCILIATION
EXCLUDING EFFECT OF ACQUISITIONS, DIVESTITURES & CURRENCY TRANSLATION
3/31/2003
(IN THOUSANDS)
Three Months Ended
March 31,
2003 2002
---------------- ----------------
Consolidated Net Sales, as reported $ 2,498,300 $ 2,100,000
- Acquisitions (311,300) -
- Divestitures - (11,200)
---------------- ----------------
Consolidated Net Sales,
excluding acquisitions & divestitures $ 2,187,000 $ 2,088,800
================ ================
North American Net Sales, as reported $ 1,993,000 $ 1,795,200
- Acquisitions (172,000) -
- Divestitures - (11,200)
---------------- ----------------
North American Net Sales,
excluding acquisitions & divestitures $ 1,821,000 $ 1,784,000
================ ================
International Net Sales, as reported $ 505,300 $ 305,000
- Acquisitions (139,300) -
- Divestitures - -
---------------- ----------------
International Net Sales,
excluding acquisitions & divestitures 366,000 305,000
- Currency Translation (60,000) -
---------------- ----------------
International Net Sales,
excluding acquisitions, divestitures & currency $ 306,000 $ 305,000
================ ================
The Company presents information comparing results from one period to another
excluding the results of businesses acquired or disposed of in order to assess
the performance of the underlying businesses and to assess to what extent
acquisitions are driving growth.
The Company also presents information comparing results of International
operations from one period to another using constant exchange rates. To present
this information, current period results for foreign entities are converted into
U.S. dollars using the prior period's exchange rates, rather than exchange rates
for the current period. The Company presents this information in order to assess
how the underlying businesses performed before taking into account currency
fluctuations.
MASCO CORPORATION
GAAP RECONCILIATION OF OPERATING PROFIT, NET INCOME AND EPS
TWELVE MONTHS ENDED DECEMBER 31, 2002
(IN THOUSANDS, EXCEPT PER SHARE DATA)
EPS OPERATING PROFIT NET INCOME
As reported $ 1.15 $ 1,331,100 $ 589,700
Litigation Charge, Net 0.18 146,800 92,300
Charge for Goodwill Impairment 0.18 92,400
Gain on Disposition of Businesses (0.02) (15,600) (9,800)
Impairment Charge for Non-operating Assets 0.03 15,100
-------- -------------- ------------
As Reconciled $ 1.52 $ 1,462,300 $ 779,700
======== ============== ============