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8-K - FORM 8-K - MASCO CORP /DE/ | k50311e8vk.htm |
FOR IMMEDIATE RELEASE
Investor / Media Contact
Maria Duey
Vice President Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
Maria Duey
Vice President Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com
MASCO CORPORATION REPORTS FIRST QUARTER 2011 RESULTS
2011 First Quarter Commentary
| Sales declined four percent to $1.8 billion. | ||
| 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 first quarter of 2010 were as follows: |
| Gross profit margins were 25.3 percent compared to 26.7 percent. | ||
| Operating profit margins were 3.0 percent compared to 5.0 percent. | ||
| (Loss) income was $(.05) per common share compared to $.03 per common share. |
| Loss, as reported, was $(.13) per common share compared to $(.02) per common share for the first quarter of 2010. |
| Working capital as a percent of sales improved to 15.5 percent at March 31, 2011, compared to 16.3 percent at March 31, 2010. |
| We ended the first quarter of 2011 with over $1.5 billion of cash. |
Taylor, Mich., (April 25, 2011) Masco Corporation(NYSE: MAS) today reported that net sales for the first quarter ended March 31, 2011 decreased four percent, to $1.8
billion, compared to the first quarter of 2010. North American sales decreased seven percent and
International sales increased four percent. In local currencies, International sales increased five
percent compared with the first quarter of 2010.
(Loss) income was $(.05) per common share and $.03 per common share for
the first quarters of 2011 and 2010, respectively, excluding the items in Exhibit A and with a
normalized tax rate of 36 percent. Including these items, loss,
as
reported was $(.13) per common share and $(.02) per common share for the first quarters ended March
31, 2011 and 2010, respectively.
As anticipated, the trends impacting our business, including depressed new home construction, the
deferral of big ticket repair and remodel activity and commodity cost pressures have continued
into 2011. In the first quarter of 2011, our sales were down four percent. Excluding cabinet
products that we are exiting, as previously announced, our sales would have been down just one
percent compared to a relatively strong first quarter of 2010, which benefited from the homebuyer
tax credit that expired in mid-2010. In addition,
1
on that same basis, sales in February and March of 2011 were basically flat with 2010. Plumbing
Products sales were strong in first quarter of 2011 compared to last year and we believe that our
North American cabinet business and our installation business, while still depressed, were able to
gain share sequentially, compared to fourth quarter of 2010. We continue to manage our cost
structure aggressively across our business and we anticipate that actions we have taken, or expect
to take, to drive productivity, cost reductions, supply chain efficiencies and price increases will
offset the impact of commodity and energy cost increases and other cost inflations for full-year
2011, said Mascos CEO Tim Wadhams.
Loss for the three months ended March 31, 2011 included gains of $17
million pre-tax related to the sale of financial investments.
We continue to focus on the rationalization of our businesses, including business consolidations,
plant closures, headcount reductions, system implementations and other initiatives. During the
first quarters of 2011 and 2010, we incurred costs and charges of $32 million pre-tax ($.06 per
common share, after tax) and $14 million pre-tax ($.03 per common share, after tax), respectively,
related to these initiatives.
Outlook 2011
While we still believe that the second half of 2011 will be stronger than the first half, our
enthusiasm has been tempered somewhat. Job growth has been modest at best, energy costs have
increased, reflecting the turmoil in the Middle East and most economists have reduced their
forecasts for 2011, including for housing starts. Given the uncertainty of the timing and strength
of the recovery in our markets, we will continue to focus on the things we can control to improve
our execution and strengthen our brands. The Masco Business System continues to drive positive
change across the Company. Our cabinet integration is on plan and we expect will drive fixed cost
reductions and share gains; we have strengthened our brands and our focus on innovation is driving
exciting new opportunities across all of our product groups, and we have added outstanding talent
to our leadership teams to enhance the development and execution of our business strategies, said
Tim Wadhams.
Longer-term, we are confident about the fundamentals for the new home construction and home
improvement markets and we are optimistic about the future. 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.
Headquartered in Taylor, Michigan, Masco Corporation is one of the worlds 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 first quarter supplemental material, including a presentation in PDF format, will be
distributed after the market closes on April 25, 2011 and will be available on the Companys Web
site at www.masco.com.
2
A conference call regarding items contained in this release is scheduled for Tuesday, April 26,
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 (913) 312-9335 (confirmation #1737120). The conference call
will be webcast simultaneously on the Companys Web site at www.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 Mascos Web site or by phone by dialing (719) 457-0820
(replay access code #1737120) approximately two hours after the end of the call and will continue
through May 3, 2011.
Masco Corporations press releases and other information are available through the Companys toll
free number, 1-888-MAS-NEWS, or under the Investor Relations section of Mascos Web site at
www.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, 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 Companys
reported results under accounting principles generally accepted in the United States. Additional
information about the Company is contained in the Companys filings with the Securities and
Exchange Commission and is available on Mascos Web site at www.masco.com.
3
MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED
For the Three Months Ended March 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED
For the Three Months Ended March 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Net sales |
$ | 1,772 | $ | 1,852 | ||||
Cost of Sales |
1,347 | 1,360 | ||||||
Gross profit |
425 | 492 | ||||||
Selling, general and administrative expenses |
404 | 414 | ||||||
Operating profit |
21 | 78 | ||||||
Other income (expense), net |
(42 | ) | (56 | ) | ||||
(Loss) income before
income taxes |
(21 | ) | 22 | |||||
Income tax expense |
13 | 18 | ||||||
Net (loss) income |
(34 | ) | 4 | |||||
Less: Net income attributable to non-controlling interest |
(12 | ) | (11 | ) | ||||
Net loss attributable to Masco Corporation |
$ | (46 | ) | $ | (7 | ) | ||
Loss per common share attributable to Masco
Corporation (diluted): |
||||||||
Net loss attributable to Masco Corporation |
$ | (0.13 | ) | $ | (0.02 | ) | ||
Average diluted common shares outstanding |
349 | 350 | ||||||
Amounts attributable to Masco Corporation: |
||||||||
Net loss attributable to Masco Corporation |
$ | (46 | ) | $ | (7 | ) | ||
4
Masco Corporation
Key Financial Data As Reported Unaudited
Q1 2011 and 2010
(In Millions, Except Earnings Per Share)
Key Financial Data As Reported Unaudited
Q1 2011 and 2010
(In Millions, Except Earnings Per Share)
Sales & Earnings | 3/31/2011 | 3/31/2010 | Change | |||||||||
Net Sales |
$ | 1,772 | $ | 1,852 | -4 | % | ||||||
Operating Profit |
$ | 21 | $ | 78 | N/A | |||||||
Operating Profit % of Net Sales |
1.2 | % | 4.2 | % | (300 | ) bps | ||||||
Other Income (Expense), Net |
$ | (42 | ) | $ | (56 | ) | $ | 14 | ||||
Income Tax Expense |
$ | 13 | $ | 18 | N/A | |||||||
Net Loss Attributable to Masco Corporation |
$ | (46 | ) | $ | (7 | ) | N/A | |||||
Diluted EPS |
$ | (0.13 | ) | $ | (0.02 | ) | N/A |
Operating Expenses | 3/31/2011 | 3/31/2010 | Change | |||||||||
Cost of Sales |
$ | 1,347 | $ | 1,360 | -1 | % | ||||||
Gross Margin |
24.0 | % | 26.6 | % | (260 | ) bps | ||||||
SG&A Expenses (Including GCE) |
$ | 404 | $ | 414 | -2 | % | ||||||
SG&A as a % of net sales |
22.8 | % | 22.4 | % | (40 | ) bps | ||||||
General Corporate Expense (GCE) |
$ | 32 | $ | 30 | 7 | % | ||||||
General Corp Expense as a % of net sales |
1.8 | % | 1.6 | % | 20 | bps |
Business Segments | 3/31/2011 | 3/31/2010 | Change | |||||||||
Cabinets and Related Products: |
||||||||||||
Net Sales |
$ | 307 | $ | 403 | -24 | % | ||||||
Operating Loss |
$ | (50 | ) | $ | (15 | ) | N/A | |||||
Operating Loss % of Net Sales |
-16.3 | % | -3.7 | % | (1,260 | ) bps | ||||||
Plumbing Products: |
||||||||||||
Net Sales |
$ | 710 | $ | 663 | 7 | % | ||||||
Operating Profit |
$ | 84 | $ | 84 | N/A | |||||||
Operating Profit % of Net Sales |
11.8 | % | 12.7 | % | (90 | ) bps | ||||||
Installation and Other Services: |
||||||||||||
Net Sales |
$ | 254 | $ | 273 | -7 | % | ||||||
Operating Loss |
$ | (40 | ) | $ | (42 | ) | N/A | |||||
Operating Loss % of Net Sales |
-15.7 | % | -15.4 | % | (30 | ) bps | ||||||
Decorative Architectural Products: |
||||||||||||
Net Sales |
$ | 375 | $ | 389 | -4 | % | ||||||
Operating Profit |
$ | 69 | $ | 87 | N/A | |||||||
Operating Profit % of Net Sales |
18.4 | % | 22.4 | % | (400 | ) bps | ||||||
Other Specialty Products: |
||||||||||||
Net Sales |
$ | 126 | $ | 124 | 2 | % | ||||||
Operating Loss |
$ | (10 | ) | $ | (6 | ) | N/A | |||||
Operating Loss % of Net Sales |
-7.9 | % | -4.8 | % | (310 | ) bps | ||||||
Total Segment Reported: |
||||||||||||
Net Sales |
$ | 1,772 | $ | 1,852 | -4 | % | ||||||
Operating Profit |
$ | 53 | $ | 108 | N/A | |||||||
Operating Profit % of Net Sales |
3.0 | % | 5.8 | % | (280 | ) bps |
5
Masco Corporation
Key Financial Data As Reported Unaudited
Q1 2011 and 2010
(In Millions, Except Earnings Per Share)
Key Financial Data As Reported Unaudited
Q1 2011 and 2010
(In Millions, Except Earnings Per Share)
Business Regions | 3/31/2011 | 3/31/2010 | Change | |||||||||
North America |
||||||||||||
Net Sales |
$ | 1,333 | $ | 1,430 | -7 | % | ||||||
Operating Profit |
$ | 11 | $ | 64 | N/A | |||||||
Operating Profit % of Net Sales |
0.8 | % | 4.5 | % | (370 | ) bps | ||||||
International, principally Europe |
||||||||||||
Net Sales |
$ | 439 | $ | 422 | 4 | % | ||||||
Operating Profit |
$ | 42 | $ | 44 | N/A | |||||||
Operating Profit % of Net Sales |
9.6 | % | 10.4 | % | (80 | ) bps |
Working Capital | 3/31/2011 | 3/31/2010 | Change | |||||||||
Receivable Days |
50 | 51 | (1 | ) | ||||||||
Inventory Days |
55 | 53 | 2 | |||||||||
Payable Days |
57 | 49 | 8 | |||||||||
Working Capital (Receivables+Inventory-Payables) |
$ | 1,165 | $ | 1,279 | -9 | % | ||||||
Working Capital as a % of Sales (As Reported TTM1) |
15.5 | % | 16.3 | % | (80 | ) bps |
Other | 3/31/2011 | 3/31/2010 | ||||||
Dividend Payments |
$ | 27 | $ | 27 | ||||
Cash Paid for Share Repurchases2 |
$ | 30 | $ | 45 | ||||
Common Shares Repurchased2 |
2 | 3 | ||||||
CAPEX |
$ | 29 | $ | 26 | ||||
Depreciation and Amortization |
$ | 75 | $ | 60 | ||||
Average diluted common shares outstanding |
349 | 350 |
Balance Sheet Information | ||||||||
Long-Term Debt |
$ | 4,030 | $ | 4,100 | ||||
Notes Payable |
$ | 66 | $ | 66 | ||||
Total Debt |
$ | 4,096 | $ | 4,166 | ||||
Shareholders Equity |
$ | 1,550 | $ | 2,703 | ||||
Debt to Capital |
73 | % | 61 | % | ||||
Cash |
1,505 | 1,378 |
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. |
6
MASCO CORPORATION
Reconciliations Exhibit A
For the Three Months Ended March 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
Reconciliations Exhibit A
For the Three Months Ended March 31, 2011 and 2010
(In Millions, Except Per Common Share Data)
Gross Profit and Operating (Loss) Profit Reconciliations
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Sales |
$ | 1,772 | $ | 1,852 | ||||
Gross profit, as reported |
$ | 425 | $ | 492 | ||||
Rationalization charges |
24 | 3 | ||||||
Gross profit, as adjusted |
$ | 449 | $ | 495 | ||||
Gross margin, as reported |
24.0 | % | 26.6 | % | ||||
Gross margin, as adjusted |
25.3 | % | 26.7 | % | ||||
Operating profit, as reported |
$ | 21 | $ | 78 | ||||
Rationalization charges |
32 | 14 | ||||||
Operating profit, as adjusted |
$ | 51 | $ | 92 | ||||
Operating margin, as reported |
1.2 | % | 4.2 | % | ||||
Operating margin, as adjusted |
3.0 | % | 5.0 | % |
Earnings Per Common Share Reconciliation
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
(Loss) income before
income taxes as reported |
$ | (21 | ) | $ | 22 | |||
Rationalization charges |
32 | 14 | ||||||
Gains from financial investments |
(17 | ) | | |||||
(Loss) Income before
income taxes as adjusted |
(6 | ) | $ | 36 | ||||
Tax at 36% rate |
2 | (13 | ) | |||||
Less: Net income attributable to non-controlling interest |
(12 | ) | (11 | ) | ||||
Net (loss) income as adjusted |
$ | (16 | ) | $ | 12 | |||
(Loss) earnings per common share as adjusted |
$ | (0.05 | ) | $ | 0.03 | |||
Shares outstanding |
349 | 350 |
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 Companys reported results under accounting principles generally accepted
in the United States.
7
Masco Corporation 1st 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 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 |
8
MASCO CORPORATION
Condensed Consolidated Statements of Operations
2011 & 2010 by Quarter Unaudited
(dollars in millions, except per share data)
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 |
$ | 1,772 | $ | 7,592 | $ | 1,735 | $ | 1,957 | $ | 2,048 | $ | 1,852 | ||||||||||||||||||||||||||||
Cost of Sales |
1,347 | 5,752 | 1,427 | 1,463 | 1,502 | 1,360 | ||||||||||||||||||||||||||||||||||
Gross Profit |
425 | 1,840 | 308 | 494 | 546 | 492 | ||||||||||||||||||||||||||||||||||
(Gross Margin as a % of Sales) |
24.0 | % | 24.2 | % | 17.8 | % | 25.2 | % | 26.7 | % | 26.6 | % | ||||||||||||||||||||||||||||
SG&A Expense (before lines 1, 2) |
372 | 1,508 | 359 | 365 | 400 | 384 | ||||||||||||||||||||||||||||||||||
(S,G&A Expense as a % of Sales) |
21.0 | % | 19.9 | % | 20.7 | % | 18.7 | % | 19.5 | % | 20.7 | % | ||||||||||||||||||||||||||||
Operating Profit (before lines 1, 2) |
53 | 332 | (51 | ) | 129 | 146 | 108 | |||||||||||||||||||||||||||||||||
(Operating Margin as a % of Sales) |
3.0 | % | 4.4 | % | -2.9 | % | 6.6 | % | 7.1 | % | 5.8 | % | ||||||||||||||||||||||||||||
1 General Corporate Expense (GCE), Net |
32 | 110 | 26 | 27 | 27 | 30 | ||||||||||||||||||||||||||||||||||
S,G&A Expense as a % of Sales (including lines 1,2) |
22.8 | % | 30.8 | % | 63.7 | % | 20.0 | % | 20.8 | % | 22.4 | % | ||||||||||||||||||||||||||||
2 Impairment Charges for Goodwill and Other Intangible Assets |
| 721 | 721 | | | | ||||||||||||||||||||||||||||||||||
Operating Profit (Loss) per F/S |
$ | 21 | $ | (499 | ) | $ | (798 | ) | $ | 102 | $ | 119 | $ | 78 | ||||||||||||||||||||||||||
(Loss) Income Per Common Share Attributable to Masco Corporation (Diluted): |
||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income |
$ | (0.13 | ) | $ | (3.00 | ) | $ | (2.96 | ) | $ | (0.02 | ) | $ | 0.01 | $ | (0.02 | ) | |||||||||||||||||||||||
Please see page 2 for Notes.
Page 1
MASCO CORPORATION
Notes To Condensed Consolidated Statements of Operations
2011 & 2010 by Quarter Unaudited
Notes To Condensed Consolidated Statements of Operations
2011 & 2010 by Quarter Unaudited
Notes:
- | Data exclude discontinued operations. | |
- | Operating results for the first quarter of 2011 include costs and charges related to business rationalizations and other initiatives of $32 million pre-tax ($.06 per common share, after tax). | |
- | Operating results 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. | |
- | 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. |
Page 2
MASCO CORPORATION
Quarterly Segment Data 2011
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
(dollars in millions)
Quarterly Segment Data 2011
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: |
||||||||||||||||||||
- Cabinets and Related Products |
$ | 307 | ||||||||||||||||||
- Plumbing Products |
710 | |||||||||||||||||||
- Installation and Other Services |
254 | |||||||||||||||||||
- Decorative Architectural Products |
375 | |||||||||||||||||||
- Other Specialty Products |
126 | |||||||||||||||||||
- Total |
$ | 1,772 | ||||||||||||||||||
- North America |
$ | 1,333 | ||||||||||||||||||
- International, principally Europe |
439 | |||||||||||||||||||
- Total, as above |
$ | 1,772 | ||||||||||||||||||
Operating (Loss) Profit: |
||||||||||||||||||||
- Cabinets and Related Products |
$ | (29 | ) | |||||||||||||||||
- Plumbing Products |
90 | |||||||||||||||||||
- Installation and Other Services |
(38 | ) | ||||||||||||||||||
- Decorative Architectural Products |
70 | |||||||||||||||||||
- Other Specialty Products |
(10 | ) | ||||||||||||||||||
- Total |
$ | 83 | ||||||||||||||||||
- North America |
$ | 41 | ||||||||||||||||||
- International, principally Europe |
42 | |||||||||||||||||||
- Total, as above |
$ | 83 | ||||||||||||||||||
General Corporate Expense (GCE), Net |
30 | |||||||||||||||||||
Operating Profit (after GCE and Adjustments) |
53 | |||||||||||||||||||
Other Income (Expense), Net |
(42 | ) | ||||||||||||||||||
(Loss) Income before
Income Taxes |
$ | 11 | ||||||||||||||||||
Margins: |
||||||||||||||||||||
- Cabinets and Related Products |
-9.4 | % | ||||||||||||||||||
- Plumbing Products |
12.7 | % | ||||||||||||||||||
- Installation and Other Services |
-15.0 | % | ||||||||||||||||||
- Decorative Architectural Products |
18.7 | % | ||||||||||||||||||
- Other Specialty Products |
-7.9 | % | ||||||||||||||||||
- Total |
4.7 | % | ||||||||||||||||||
- North America |
3.1 | % | ||||||||||||||||||
- International, principally Europe |
9.6 | % | ||||||||||||||||||
- Total, as above |
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
(dollars in millions)
Quarterly Segment Data 2011
Including Costs and Charges for Business Rationalizations and Other Initiatives
(dollars in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Net Sales: |
||||||||||||||||||||
- Cabinets and Related Products |
$ | 307 | ||||||||||||||||||
- Plumbing Products |
710 | |||||||||||||||||||
- Installation and Other Services |
254 | |||||||||||||||||||
- Decorative Architectural Products |
375 | |||||||||||||||||||
- Other Specialty Products |
126 | |||||||||||||||||||
- Total |
$ | 1,772 | ||||||||||||||||||
- North America |
$ | 1,333 | ||||||||||||||||||
- International, principally Europe |
439 | |||||||||||||||||||
- Total, as above |
$ | 1,772 | ||||||||||||||||||
Operating (Loss) Profit: |
||||||||||||||||||||
- Cabinets and Related Products |
$ | (50 | ) | |||||||||||||||||
- Plumbing Products |
84 | |||||||||||||||||||
- Installation and Other Services |
(40 | ) | ||||||||||||||||||
- Decorative Architectural Products |
69 | |||||||||||||||||||
- Other Specialty Products |
(10 | ) | ||||||||||||||||||
- Total |
$ | 53 | ||||||||||||||||||
- North America |
$ | 11 | ||||||||||||||||||
- International, principally Europe |
42 | |||||||||||||||||||
- Total, as above |
$ | 53 | ||||||||||||||||||
General Corporate Expense (GCE), Net |
32 | |||||||||||||||||||
Operating Profit (after GCE and Adjustments) |
21 | |||||||||||||||||||
Other Income (Expense), Net |
(42 | ) | ||||||||||||||||||
(Loss) Income before Income Taxes |
$ | (21 | ) | |||||||||||||||||
Margins: |
||||||||||||||||||||
- Cabinets and Related Products |
-16.3 | % | ||||||||||||||||||
- Plumbing Products |
11.8 | % | ||||||||||||||||||
- Installation and Other Services |
-15.7 | % | ||||||||||||||||||
- Decorative Architectural Products |
18.4 | % | ||||||||||||||||||
- Other Specialty Products |
-7.9 | % | ||||||||||||||||||
- Total |
3.0 | % | ||||||||||||||||||
- North America |
0.8 | % | ||||||||||||||||||
- International, principally Europe |
9.6 | % | ||||||||||||||||||
- Total, as above |
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
(in millions)
Quarterly Segment Data 2011
Costs and Charges for Business Rationalizations and Other Initiatives
(in millions)
Year | Qtr. 4 | Qtr. 3 | Qtr. 2 | Qtr. 1 | ||||||||||||||||
Business Rationalizations & Other Initiatives |
||||||||||||||||||||
- Cabinets and Related Products |
$ | 21 | ||||||||||||||||||
- Plumbing Products |
6 | |||||||||||||||||||
- Installation and Other Services |
2 | |||||||||||||||||||
- Decorative Architectural Products |
1 | |||||||||||||||||||
- Other Specialty Products |
| |||||||||||||||||||
- Total |
$ | 30 | ||||||||||||||||||
- North America |
$ | 30 | ||||||||||||||||||
- International, principally Europe |
| |||||||||||||||||||
- Total, as above |
$ | 30 | ||||||||||||||||||
General Corporate Expense (GCE), Net |
2 | |||||||||||||||||||
- Total |
$ | 32 | ||||||||||||||||||
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)
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)
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)
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 |
720 | 720 | | | | |||||||||||||||
- Decorative Architectural Products |
| | | | | |||||||||||||||
- Other Specialty Products |
| | | | | |||||||||||||||
- Total |
$ | 721 | $ | 721 | $ | | $ | | $ | | ||||||||||
- North America |
$ | 721 | $ | 721 | $ | | $ | | $ | | ||||||||||
- International, principally Europe |
| | | | | |||||||||||||||
- 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)
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 | ) | $ | (251 | ) | $ | (63 | ) | $ | (63 | ) | $ | (67 | ) | $ | (58 | ) | ||||||||||||||||||||||
Income from Cash and Cash Investments |
2 | 6 | 2 | 2 | 1 | 1 | ||||||||||||||||||||||||||||||||||
Other Interest Income |
| 1 | | | | 1 | ||||||||||||||||||||||||||||||||||
Realized Gains (Losses) from Financial Investments, Net |
17 | 9 | 11 | (3 | ) | 1 | | |||||||||||||||||||||||||||||||||
Impairment Charges for Financial Investments |
| (34 | ) | (1 | ) | | (33 | ) | | |||||||||||||||||||||||||||||||
Other, Net |
2 | (9 | ) | (4 | ) | | (5 | ) | | |||||||||||||||||||||||||||||||
Total Other Income (Expense), Net |
$ | (42 | ) | $ | (278 | ) | $ | (55 | ) | $ | (64 | ) | $ | (103 | ) | $ | (56 | ) | ||||||||||||||||||||||
Notes:
- | Data exclude discontinued operations. | |
- | Other, Net, in 2011 includes currency gains of $2 million for the first quarter. | |
- | 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)
Condensed Consolidated Balance Sheets Unaudited
(in millions)
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and Cash Investments |
$ | 1,505 | $ | 1,715 | ||||
Receivables |
1,113 | 888 | ||||||
Inventories |
839 | 732 | ||||||
Prepaid Expenses and Other |
138 | 129 | ||||||
Total Current Assets |
3,595 | 3,464 | ||||||
Property and Equipment, Net |
1,719 | 1,737 | ||||||
Goodwill |
2,395 | 2,383 | ||||||
Other Intangible Assets, Net |
268 | 269 | ||||||
Other Assets |
269 | 287 | ||||||
Total Assets |
$ | 8,246 | $ | 8,140 | ||||
Liabilities |
||||||||
Current Liabilities: |
||||||||
Notes Payable |
$ | 66 | $ | 66 | ||||
Accounts Payable |
787 | 602 | ||||||
Accrued Liabilities |
773 | 819 | ||||||
Total Current Liabilities |
1,626 | 1,487 | ||||||
Long-Term Debt |
4,030 | 4,032 | ||||||
Deferred Income Taxes and Other |
1,040 | 1,039 | ||||||
Total Liabilities |
6,696 | 6,558 | ||||||
Shareholders Equity |
1,550 | 1,582 | ||||||
Total Liabilities and Shareholders Equity |
$ | 8,246 | $ | 8,140 | ||||
Page 10
MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation Unaudited
(dollars in millions)
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation Unaudited
(dollars in millions)
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2011 | 2010 | % △ | ||||||||||
Net Sales, As Reported |
$ | 1,772 | $ | 1,852 | -4 | % | ||||||
-
Acquisitions |
| | ||||||||||
- Currency Translation |
| | ||||||||||
Net Sales, Excluding Acquisitions and Currency Translation |
$ | 1,772 | $ | 1,852 | -4 | % | ||||||
North America Net Sales, As Reported |
$ | 1,333 | $ | 1,430 | -7 | % | ||||||
-
Acquisitions |
| | ||||||||||
- Currency Translation |
(3 | ) | | |||||||||
North America Net Sales, Excluding Acquisitions and Currency Translation |
$ | 1,330 | $ | 1,430 | -7 | % | ||||||
International Net Sales, As Reported |
$ | 439 | $ | 422 | 4 | % | ||||||
- Acquisitions |
| | ||||||||||
- Currency Translation |
3 | | ||||||||||
International Net Sales, Excluding Acquisitions and Currency Translation |
$ | 442 | $ | 422 | 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 periods 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)
GAAP Reconciliation of Operating Profit and Margins Unaudited
(dollars in millions)
Three Months Ended March 31, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Margin | $ | Margin | |||||||||||||
Operating Profit, As Reported |
$ | 21 | 1.2 | % | $ | 78 | 4.2 | % | ||||||||
Business Rationalizations and Other Initiatives |
32 | 14 | ||||||||||||||
Operating Profit, As Reconciled |
$ | 53 | 3.0 | % | $ | 92 | 5.0 | % | ||||||||
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 Companys reported results under accounting principles generally accepted in the United States. |
Page 12