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Delaware
|
|
38-1794485
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(State of
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|
(IRS Employer
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Incorporation)
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Identification No.)
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21001 Van Born Road, Taylor, Michigan
|
|
48180
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(Address of Principal Executive Offices)
|
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(Zip Code)
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Large accelerated filer
x
|
|
Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
|
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Emerging growth company
o
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Class
|
|
Shares Outstanding at March 31, 2017
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Common stock, par value $1.00 per share
|
|
319,362,898
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|
|
|
|
|
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Page No.
|
|
||
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||
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||
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||
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||
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||
|
||
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||
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March 31, 2017
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December 31, 2016
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash investments
|
$
|
689
|
|
|
$
|
990
|
|
Short-term bank deposits
|
194
|
|
|
201
|
|
||
Receivables
|
1,144
|
|
|
917
|
|
||
Prepaid expenses and other
|
105
|
|
|
114
|
|
||
Inventories:
|
|
|
|
|
|
||
Finished goods
|
463
|
|
|
366
|
|
||
Raw material
|
263
|
|
|
254
|
|
||
Work in process
|
100
|
|
|
92
|
|
||
|
826
|
|
|
712
|
|
||
Total current assets
|
2,958
|
|
|
2,934
|
|
||
Property and equipment, net
|
1,074
|
|
|
1,060
|
|
||
Goodwill
|
835
|
|
|
832
|
|
||
Other intangible assets, net
|
154
|
|
|
154
|
|
||
Other assets
|
118
|
|
|
157
|
|
||
Total assets
|
$
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5,139
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|
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$
|
5,137
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||||
LIABILITIES
|
|
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||
Current liabilities:
|
|
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|
|
||
Accounts payable
|
$
|
903
|
|
|
$
|
800
|
|
Notes payable
|
3
|
|
|
2
|
|
||
Accrued liabilities
|
518
|
|
|
658
|
|
||
Total current liabilities
|
1,424
|
|
|
1,460
|
|
||
Long-term debt
|
2,996
|
|
|
2,995
|
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Other liabilities
|
778
|
|
|
785
|
|
||
Total liabilities
|
5,198
|
|
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5,240
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||
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|
||||
Commitments and contingencies (Note M)
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|
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||||
EQUITY
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Masco Corporation’s shareholders’ equity:
|
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Common shares, par value $1 per share
Authorized shares: 1,400,000,000;
Issued and outstanding: 2017 – 316,100,000; 2016 – 318,000,000
|
316
|
|
|
318
|
|
||
Preferred shares authorized: 1,000,000;
Issued and outstanding: 2017 and 2016 – None
|
—
|
|
|
—
|
|
||
Paid-in capital
|
—
|
|
|
—
|
|
||
Retained deficit
|
(370
|
)
|
|
(381
|
)
|
||
Accumulated other comprehensive loss
|
(214
|
)
|
|
(235
|
)
|
||
Total Masco Corporation’s shareholders’ deficit
|
(268
|
)
|
|
(298
|
)
|
||
Noncontrolling interest
|
209
|
|
|
195
|
|
||
Total equity
|
(59
|
)
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|
(103
|
)
|
||
Total liabilities and equity
|
$
|
5,139
|
|
|
$
|
5,137
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|
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Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Net sales
|
$
|
1,777
|
|
|
$
|
1,720
|
|
Cost of sales
|
1,169
|
|
|
1,151
|
|
||
Gross profit
|
608
|
|
|
569
|
|
||
Selling, general and administrative expenses
|
355
|
|
|
335
|
|
||
Operating profit
|
253
|
|
|
234
|
|
||
Other income (expense), net:
|
|
|
|
|
|
||
Interest expense
|
(43
|
)
|
|
(56
|
)
|
||
Other, net
|
3
|
|
|
(1
|
)
|
||
|
(40
|
)
|
|
(57
|
)
|
||
Income before income taxes
|
213
|
|
|
177
|
|
||
Income tax expense
|
63
|
|
|
58
|
|
||
Net income
|
150
|
|
|
119
|
|
||
Less: Net income attributable to noncontrolling interest
|
10
|
|
|
10
|
|
||
Net income attributable to Masco Corporation
|
$
|
140
|
|
|
$
|
109
|
|
|
|
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|
||||
Income per common share attributable to Masco Corporation:
|
|
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|
||||
Basic:
|
|
|
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Net income
|
$
|
.44
|
|
|
$
|
.33
|
|
Diluted:
|
|
|
|
|
|
||
Net income
|
$
|
.43
|
|
|
$
|
.32
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
150
|
|
|
$
|
119
|
|
Less: Net income attributable to noncontrolling interest
|
10
|
|
|
10
|
|
||
Net income attributable to Masco Corporation
|
$
|
140
|
|
|
$
|
109
|
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Other comprehensive income, net of tax (Note I):
|
|
|
|
|
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Cumulative translation adjustment
|
$
|
21
|
|
|
$
|
24
|
|
Pension and other post-retirement benefits
|
4
|
|
|
3
|
|
||
Other comprehensive income
|
25
|
|
|
27
|
|
||
Less: Other comprehensive income attributable to noncontrolling interest
|
4
|
|
|
7
|
|
||
Other comprehensive income attributable to Masco Corporation
|
$
|
21
|
|
|
$
|
20
|
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Total comprehensive income
|
$
|
175
|
|
|
$
|
146
|
|
Less: Total comprehensive income attributable to the noncontrolling interest
|
14
|
|
|
17
|
|
||
Total comprehensive income attributable to Masco Corporation
|
$
|
161
|
|
|
$
|
129
|
|
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Three Months Ended
March 31, |
||||||
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2017
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2016
|
||||
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
|
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Cash provided by operations
|
$
|
253
|
|
|
$
|
219
|
|
Increase in receivables
|
(237
|
)
|
|
(198
|
)
|
||
Increase in inventories
|
(109
|
)
|
|
(63
|
)
|
||
Decrease in accounts payable and accrued liabilities, net
|
(56
|
)
|
|
(28
|
)
|
||
Net cash for operating activities
|
(149
|
)
|
|
(70
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Purchase of Company common stock
|
(87
|
)
|
|
(86
|
)
|
||
Cash dividends paid
|
(32
|
)
|
|
(32
|
)
|
||
Issuance of notes, net of issuance costs
|
—
|
|
|
889
|
|
||
Issuance of Company common stock
|
—
|
|
|
1
|
|
||
Employee withholding taxes paid on stock-based compensation
|
(14
|
)
|
|
(19
|
)
|
||
Decrease in debt, net
|
—
|
|
|
(2
|
)
|
||
Net cash (for) from financing activities
|
(133
|
)
|
|
751
|
|
||
|
|
|
|
||||
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Capital expenditures
|
(37
|
)
|
|
(37
|
)
|
||
Proceeds from disposition of:
|
|
|
|
|
|
||
Short-term bank deposits
|
11
|
|
|
60
|
|
||
Other financial investments
|
3
|
|
|
—
|
|
||
Property and equipment
|
6
|
|
|
—
|
|
||
Other, net
|
(9
|
)
|
|
(3
|
)
|
||
Net cash (for) from investing activities
|
(26
|
)
|
|
20
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash investments
|
7
|
|
|
6
|
|
||
|
|
|
|
||||
CASH AND CASH INVESTMENTS:
|
|
|
|
|
|
||
(Decrease) increase for the period
|
(301
|
)
|
|
707
|
|
||
At January 1
|
990
|
|
|
1,468
|
|
||
At March 31
|
$
|
689
|
|
|
$
|
2,175
|
|
|
|
Total
|
|
Common
Shares
($1 par value)
|
|
Paid-In
Capital
|
|
Retained Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interest
|
||||||||||||
Balance, January 1, 2016
|
$
|
58
|
|
|
$
|
330
|
|
|
$
|
—
|
|
|
$
|
(300
|
)
|
|
$
|
(165
|
)
|
|
$
|
193
|
|
Total comprehensive income
|
146
|
|
|
|
|
|
|
|
|
109
|
|
|
20
|
|
|
17
|
|
||||||
Shares issued
|
(6
|
)
|
|
2
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
||||||
Shares retired:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repurchased
|
(86
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|
(76
|
)
|
|
|
|
|
|
|
||||||
Surrendered (non-cash)
|
(11
|
)
|
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
||||||
Cash dividends declared
|
(32
|
)
|
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
|
||||||
Stock-based compensation
|
15
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, March 31, 2016
|
$
|
84
|
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
(310
|
)
|
|
$
|
(145
|
)
|
|
$
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, January 1, 2017
|
$
|
(103
|
)
|
|
$
|
318
|
|
|
$
|
—
|
|
|
$
|
(381
|
)
|
|
$
|
(235
|
)
|
|
$
|
195
|
|
Total comprehensive income
|
175
|
|
|
|
|
|
|
|
|
140
|
|
|
21
|
|
|
14
|
|
||||||
Shares issued
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
||||||
Shares retired:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Repurchased
|
(92
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(84
|
)
|
|
|
|
|
|
|
||||||
Surrendered (non-cash)
|
(13
|
)
|
|
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
|
||||||
Cash dividends declared
|
(32
|
)
|
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
|
||||||
Stock-based compensation
|
7
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, March 31, 2017
|
$
|
(59
|
)
|
|
$
|
316
|
|
|
$
|
—
|
|
|
$
|
(370
|
)
|
|
$
|
(214
|
)
|
|
$
|
209
|
|
|
Gross Goodwill At March 31, 2017
|
|
Accumulated
Impairment Losses |
|
Net Goodwill At March 31, 2017
|
||||||
Plumbing Products
|
$
|
522
|
|
|
$
|
(340
|
)
|
|
$
|
182
|
|
Decorative Architectural Products
|
294
|
|
|
(75
|
)
|
|
219
|
|
|||
Cabinetry Products
|
240
|
|
|
(59
|
)
|
|
181
|
|
|||
Windows and Other Specialty Products
|
987
|
|
|
(734
|
)
|
|
253
|
|
|||
Total
|
$
|
2,043
|
|
|
$
|
(1,208
|
)
|
|
$
|
835
|
|
|
Gross Goodwill At December 31, 2016
|
|
Accumulated
Impairment
Losses
|
|
Net Goodwill At December 31, 2016
|
|
Other(A)
|
|
Net Goodwill At March 31, 2017
|
||||||||||
Plumbing Products
|
$
|
519
|
|
|
$
|
(340
|
)
|
|
$
|
179
|
|
|
$
|
3
|
|
|
$
|
182
|
|
Decorative Architectural Products
|
294
|
|
|
(75
|
)
|
|
219
|
|
|
—
|
|
|
219
|
|
|||||
Cabinetry Products
|
240
|
|
|
(59
|
)
|
|
181
|
|
|
—
|
|
|
181
|
|
|||||
Windows and Other Specialty Products
|
987
|
|
|
(734
|
)
|
|
253
|
|
|
—
|
|
|
253
|
|
|||||
Total
|
$
|
2,040
|
|
|
$
|
(1,208
|
)
|
|
$
|
832
|
|
|
$
|
3
|
|
|
$
|
835
|
|
|
|
At March 31, 2017
|
||||||
|
Notional
Amount |
|
Balance Sheet
|
||||
Foreign currency contracts:
|
|
|
|
|
|
||
Exchange contracts
|
$
|
6
|
|
|
|
|
|
Accrued liabilities
|
|
|
|
$
|
—
|
|
|
Forward contracts
|
18
|
|
|
|
|
||
Accrued liabilities
|
|
|
|
(2
|
)
|
|
At December 31, 2016
|
||||||
|
Notional
Amount |
|
Balance Sheet
|
||||
Foreign currency contracts:
|
|
|
|
|
|
||
Forward contracts
|
$
|
21
|
|
|
|
|
|
Accrued liabilities
|
|
|
|
$
|
(2
|
)
|
|
Metals contracts
|
1
|
|
|
|
|
||
Accrued liabilities
|
|
|
|
—
|
|
|
Three Months Ended
March 31, 2017 |
|
Twelve Months Ended December 31, 2016
|
||||
Balance at January 1
|
$
|
192
|
|
|
$
|
152
|
|
Accruals for warranties issued during the period
|
13
|
|
|
66
|
|
||
Accruals related to pre-existing warranties
|
3
|
|
|
33
|
|
||
Settlements made (in cash or kind) during the period
|
(14
|
)
|
|
(56
|
)
|
||
Other, net (including currency translation)
|
—
|
|
|
(3
|
)
|
||
Balance at end of period
|
$
|
194
|
|
|
$
|
192
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Long-term stock awards
|
$
|
6
|
|
|
$
|
5
|
|
Stock options
|
1
|
|
|
1
|
|
||
Phantom stock awards and stock appreciation rights
|
2
|
|
|
3
|
|
||
Total
|
$
|
9
|
|
|
$
|
9
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Unvested stock award shares at January 1
|
4
|
|
|
5
|
|
||
Weighted average grant date fair value
|
$
|
20
|
|
|
$
|
17
|
|
|
|
|
|
||||
Stock award shares granted
|
1
|
|
|
1
|
|
||
Weighted average grant date fair value
|
$
|
34
|
|
|
$
|
26
|
|
|
|
|
|
||||
Stock award shares vested
|
2
|
|
|
2
|
|
||
Weighted average grant date fair value
|
$
|
18
|
|
|
$
|
16
|
|
|
|
|
|
||||
Stock award shares forfeited
|
—
|
|
|
—
|
|
||
Weighted average grant date fair value
|
$
|
22
|
|
|
$
|
19
|
|
|
|
|
|
||||
Unvested stock award shares at March 31
|
3
|
|
|
4
|
|
||
Weighted average grant date fair value
|
$
|
23
|
|
|
$
|
20
|
|
|
|
Three Months Ended March 31,
|
|||||
|
|
2017
|
|
|
2016
|
||
Option shares outstanding, January 1
|
|
7
|
|
|
|
12
|
|
Weighted average exercise price
|
$
|
15
|
|
|
$
|
17
|
|
|
|
|
|
|
|
||
Option shares granted
|
|
—
|
|
|
|
—
|
|
Weighted average exercise price
|
$
|
34
|
|
|
$
|
26
|
|
|
|
|
|
|
|
||
Option shares exercised
|
|
—
|
|
|
|
1
|
|
Aggregate intrinsic value on date of exercise
(A)
|
$
|
3 million
|
|
|
$
|
18 million
|
|
Weighted average exercise price
|
$
|
23
|
|
|
$
|
18
|
|
|
|
|
|
|
|
||
Option shares forfeited
|
|
—
|
|
|
|
—
|
|
Weighted average exercise price
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||
Option shares outstanding, March 31
|
|
7
|
|
|
|
11
|
|
Weighted average exercise price
|
$
|
16
|
|
|
$
|
18
|
|
Weighted average remaining option term (in years)
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
||
Option shares vested and expected to vest, March 31
|
|
7
|
|
|
|
11
|
|
Weighted average exercise price
|
$
|
16
|
|
|
$
|
18
|
|
Aggregate intrinsic value
(A)
|
$
|
131 million
|
|
|
$
|
154 million
|
|
Weighted average remaining option term (in years)
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
||
Option shares exercisable (vested), March 31
|
|
6
|
|
|
|
10
|
|
Weighted average exercise price
|
$
|
13
|
|
|
$
|
17
|
|
Aggregate intrinsic value
(A)
|
$
|
120 million
|
|
|
$
|
138 million
|
|
Weighted average remaining option term (in years)
|
|
3
|
|
|
|
3
|
|
|
(A)
|
Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price), multiplied by the number of shares.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Weighted average grant date fair value
|
$
|
9.68
|
|
|
$
|
6.43
|
|
Risk-free interest rate
|
2.16
|
%
|
|
1.41
|
%
|
||
Dividend yield
|
1.19
|
%
|
|
1.49
|
%
|
||
Volatility factor
|
30.00
|
%
|
|
29.00
|
%
|
||
Expected option life
|
6 years
|
|
|
6 years
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Qualified
|
|
Non-Qualified
|
|
Qualified
|
|
Non-Qualified
|
||||||||
Service cost
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest cost
|
12
|
|
|
1
|
|
|
11
|
|
|
1
|
|
||||
Expected return on plan assets
|
(12
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Amortization of net loss
|
5
|
|
|
1
|
|
|
4
|
|
|
1
|
|
||||
Net periodic pension cost
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
|
Amounts Reclassified
|
|
|
||||||
Accumulated Other Comprehensive Loss
|
|
Three Months Ended
March 31, |
|
Statement of Operations Line Item
|
||||||
|
2017
|
|
2016
|
|
||||||
Amortization of defined benefit pension and other postretirement benefits:
|
|
|
|
|
|
|
|
|
||
Actuarial losses, net
|
|
$
|
6
|
|
|
$
|
5
|
|
|
Selling, general and administrative expenses
|
Tax (benefit)
|
|
(2
|
)
|
|
(2
|
)
|
|
|
||
Net of tax
|
|
$
|
4
|
|
|
$
|
3
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
Net Sales(A)
|
|
Operating
Profit
|
||||||||||||
Operations by segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Plumbing Products
|
$
|
863
|
|
|
$
|
813
|
|
|
$
|
156
|
|
|
$
|
129
|
|
Decorative Architectural Products
|
505
|
|
|
493
|
|
|
101
|
|
|
105
|
|
||||
Cabinetry Products
|
231
|
|
|
236
|
|
|
16
|
|
|
24
|
|
||||
Windows and Other Specialty Products
|
178
|
|
|
178
|
|
|
6
|
|
|
3
|
|
||||
Total
|
$
|
1,777
|
|
|
$
|
1,720
|
|
|
$
|
279
|
|
|
$
|
261
|
|
Operations by geographic area:
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America
|
$
|
1,411
|
|
|
$
|
1,350
|
|
|
$
|
239
|
|
|
$
|
215
|
|
International, principally Europe
|
366
|
|
|
370
|
|
|
40
|
|
|
46
|
|
||||
Total
|
$
|
1,777
|
|
|
$
|
1,720
|
|
|
279
|
|
|
261
|
|
||
General corporate expense, net
|
|
|
|
|
|
|
(26
|
)
|
|
(27
|
)
|
||||
Operating profit
|
|
|
|
|
|
|
253
|
|
|
234
|
|
||||
Other income (expense), net
|
|
|
|
|
|
|
(40
|
)
|
|
(57
|
)
|
||||
Income before income taxes
|
|
|
|
|
|
|
$
|
213
|
|
|
$
|
177
|
|
|
(A)
|
Inter-segment sales were not material.
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Income from cash and cash investments and short-term bank deposits
|
$
|
1
|
|
|
$
|
1
|
|
Equity investment income, net
|
—
|
|
|
1
|
|
||
Realized gains from private equity funds
|
1
|
|
|
—
|
|
||
Foreign currency transaction gains
|
1
|
|
|
—
|
|
||
Other items, net
|
—
|
|
|
(3
|
)
|
||
Total other, net
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Numerator (basic and diluted):
|
|
|
|
|
|
||
Net income
|
$
|
140
|
|
|
$
|
109
|
|
Less: Allocation to unvested restricted stock awards
|
1
|
|
|
1
|
|
||
Net income available to common shareholders
|
$
|
139
|
|
|
$
|
108
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
|
||
Basic common shares (based upon weighted average)
|
317
|
|
|
330
|
|
||
Add: Stock option dilution
|
4
|
|
|
3
|
|
||
Diluted common shares
|
321
|
|
|
333
|
|
|
Three Months Ended March 31,
|
|
Percent Change
|
|||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
|||||
Net Sales:
|
|
|
|
|
|
|
|
|
||
Plumbing Products
|
$
|
863
|
|
|
$
|
813
|
|
|
6
|
%
|
Decorative Architectural Products
|
505
|
|
|
493
|
|
|
2
|
%
|
||
Cabinetry Products
|
231
|
|
|
236
|
|
|
(2
|
)%
|
||
Windows and Other Specialty Products
|
178
|
|
|
178
|
|
|
—
|
%
|
||
Total
|
$
|
1,777
|
|
|
$
|
1,720
|
|
|
3
|
%
|
|
|
|
|
|
|
|||||
North America
|
$
|
1,411
|
|
|
$
|
1,350
|
|
|
5
|
%
|
International, principally Europe
|
366
|
|
|
370
|
|
|
(1
|
)%
|
||
Total
|
$
|
1,777
|
|
|
$
|
1,720
|
|
|
3
|
%
|
|
Three Months Ended March 31,
|
||||
|
2017
|
|
2016
|
||
Operating Profit Margins: (A)
|
|
|
|
|
|
Plumbing Products
|
18.1
|
%
|
|
15.9
|
%
|
Decorative Architectural Products
|
20.0
|
%
|
|
21.3
|
%
|
Cabinetry Products
|
6.9
|
%
|
|
10.2
|
%
|
Windows and Other Specialty Products
|
3.4
|
%
|
|
1.7
|
%
|
|
|
|
|
||
North America
|
16.9
|
%
|
|
15.9
|
%
|
International, principally Europe
|
10.9
|
%
|
|
12.4
|
%
|
Total
|
15.7
|
%
|
|
15.2
|
%
|
Total operating profit margin, as reported
|
14.2
|
%
|
|
13.6
|
%
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Net sales, as reported
|
$
|
1,777
|
|
|
$
|
1,720
|
|
Acquisitions (none)
|
—
|
|
|
—
|
|
||
Net sales, excluding acquisitions
|
1,777
|
|
|
1,720
|
|
||
Currency translation
|
22
|
|
|
—
|
|
||
Net sales, excluding acquisitions and the effect of currency translation
|
$
|
1,799
|
|
|
$
|
1,720
|
|
Period
|
Total Number
Of Shares
Purchased
|
|
Average Price
Paid Per
Common Share
|
|
Total Number Of
Shares Purchased
As Part Of
Publicly Announced
Plans or Programs (A)
|
|
Maximum Number Of
Shares That May
Yet Be Purchased
Under The Plans Or Programs
|
|||||
1/1/17-1/31/17
|
1,002,140
|
|
|
$
|
32.25
|
|
|
1,002,140
|
|
|
11,867,538
|
|
2/1/17-2/28/17
|
684,676
|
|
|
$
|
33.55
|
|
|
684,676
|
|
|
11,182,862
|
|
3/1/17-3/31/17
|
1,089,949
|
|
|
$
|
33.93
|
|
|
1,089,949
|
|
|
10,092,913
|
|
Total for the quarter
|
2,776,765
|
|
|
$
|
33.23
|
|
|
2,776,765
|
|
|
10,092,913
|
|
|
(A)
|
In September 2014, our Board of Directors authorized the purchase of up to 50 million shares of our common stock in open-market transactions or otherwise.
|
|
|
|
|
|
10
|
–
|
Form of Long Term Incentive Program Awards
|
|
|
|
|
|
12
|
–
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
|
|
|
|
|
|
31a
|
–
|
Certification by Chief Executive Officer Required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
31b
|
–
|
Certification by Chief Financial Officer Required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
32
|
–
|
Certification Required by Rule 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code
|
|
|
|
|
|
101
|
–
|
Interactive Data File
|
|
MASCO CORPORATION
|
|
|
|
|
|
By:
|
/s/ John G. Sznewajs
|
|
Name: John G. Sznewajs
|
|
|
Title: Vice President and Chief Financial Officer
|
Exhibit
|
|
|
|
|
|
Exhibit 10
|
|
Form of Long Term Incentive Program Awards
|
|
|
|
Exhibit 12
|
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
|
|
|
|
Exhibit 31a
|
|
Certification by Chief Executive Officer Required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
Exhibit 31b
|
|
Certification by Chief Financial Officer Required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
Exhibit 32
|
|
Certification Required by Rule 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code
|
|
|
|
Exhibit 101
|
|
Interactive Data File
|
RE:
|
RSU Grant Under the [Insert Performance Period] LTIP Program
|
Performance Score Percentages
|
Threshold
40
%
|
Target
100%
|
Maximum
200%
|
Three-Year Average ROIC Goals
|
___%
|
___%
|
___%
|
•
|
If you voluntarily terminate your employment at age sixty-five (65) or later, prior to the Share Award Date, then, in the discretion of the Committee, a cash payment equal to the value of a prorated Share Award (where the prorated amount is determined by the Committee and may be based, in part, on the length of your service) that would otherwise have been made to you, may be made to you at the same time as Share Awards are made; and
|
•
|
If, prior to the Share Award Date, (1) there is a Change in Control of the Company (as defined in the Plan) and you are terminated from employment at the time of the Change in Control or within a specified period of time after the Change in Control (as determined by the Committee) or you resign from employment for Good Reason (as determined by the Committee) within that specified period, or (2) you die, or (3) you become permanently and totally disabled (as determined by the Committee), then, in the discretion of the Committee, a cash payment equal to the value of a prorated Share Award (where the prorated amount is determined by the Committee and may be based, in part, on the length of your service) that would otherwise have been made to you, may be made to you at the same time as Share Awards are made.
|
•
|
You have read and you understand this Grant Letter (including Exhibit A, which is incorporated as part of this Grant Letter) and the Agreement;
|
•
|
You have received or have access to all of the documents referred to in this Grant Letter;
|
•
|
There are no other commitments or understandings currently outstanding with respect to any other grants of options, restricted stock, restricted stock units, phantom stock, stock appreciation rights, or performance awards, except as may be evidenced by other agreements entered into by you and the Company or Committee;
|
•
|
You may be required to accept certain terms and conditions at the end of the Performance Period with respect to any Shares that may be issued to you resulting from any portion of the Award that may be achieved;
|
•
|
This Agreement will be governed by and interpreted in accordance with Michigan
law, unless preempted by applicable Federal law.
The headings in this Grant Letter are for information purposes only and are not a substantive part of the operative Agreement; and
|
•
|
The LTIP Program is, in all respects, subject to the documents referenced in this Grant Letter and the Committee’s application of its negative discretion, and is intended to comply with, or be exempt from, as the case may be, the provisions of Internal Revenue Code Sections 162(m) and 409A.
|
|
|
(Dollars in Millions)
|
||||||||||||||||||||||
|
|
Three Months Ended
March 31, |
|
Year Ended December 31,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from continuing operations before income taxes
|
|
$
|
213
|
|
|
$
|
830
|
|
|
$
|
689
|
|
|
$
|
507
|
|
|
$
|
386
|
|
|
$
|
155
|
|
Deduct equity in undistributed (earnings) loss of fifty-percent-or-less-owned companies
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
2
|
|
|
(16)
|
|
|
—
|
|
||||||
Add interest on indebtedness, net
|
|
42
|
|
|
185
|
|
|
222
|
|
|
221
|
|
|
230
|
|
|
249
|
|
||||||
Add amortization of debt expense
|
|
1
|
|
|
5
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
7
|
|
||||||
Add estimated interest factor for rentals
|
|
5
|
|
|
21
|
|
|
19
|
|
|
33
|
|
|
31
|
|
|
31
|
|
||||||
Earnings before income taxes, noncontrolling interest, fixed charges and preferred stock dividends
|
|
$
|
261
|
|
|
$
|
1,039
|
|
|
$
|
933
|
|
|
$
|
768
|
|
|
$
|
637
|
|
|
$
|
442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest on indebtedness
|
|
$
|
43
|
|
|
$
|
190
|
|
|
$
|
223
|
|
|
$
|
221
|
|
|
$
|
229
|
|
|
$
|
248
|
|
Amortization of debt expense
|
|
1
|
|
|
5
|
|
|
5
|
|
|
5
|
|
|
6
|
|
|
7
|
|
||||||
Estimated interest factor for rentals
|
|
5
|
|
|
21
|
|
|
19
|
|
|
33
|
|
|
31
|
|
|
31
|
|
||||||
Total fixed charges
|
|
$
|
49
|
|
|
$
|
216
|
|
|
$
|
247
|
|
|
$
|
259
|
|
|
$
|
266
|
|
|
$
|
286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preferred stock dividends (A)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Combined fixed charges and preferred stock dividends
|
|
$
|
49
|
|
|
$
|
216
|
|
|
$
|
247
|
|
|
$
|
259
|
|
|
$
|
266
|
|
|
$
|
286
|
|
Ratio of earnings to fixed charges
|
|
5.3
|
|
|
4.8
|
|
|
3.8
|
|
|
3.0
|
|
|
2.4
|
|
|
1.5
|
|
||||||
Ratio of earnings to combined fixed charges and preferred stock dividends
|
|
5.3
|
|
|
4.8
|
|
|
3.8
|
|
|
3.0
|
|
|
2.4
|
|
|
1.5
|
|
||||||
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items
(B)
|
|
5.3
|
|
|
4.8
|
|
|
3.8
|
|
|
2.9
|
|
|
2.4
|
|
|
1.7
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Masco Corporation ("the registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 25, 2017
|
|
By:
|
/s/ Keith Allman
|
|
|
|
|
Keith Allman
|
|
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Masco Corporation ("the registrant");
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 25, 2017
|
|
By:
|
/s/ John G. Sznewajs
|
|
|
|
|
John G. Sznewajs
|
|
|
|
|
Vice President and Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of Masco Corporation.
|
Date:
|
|
April 25, 2017
|
|
/s/ Keith Allman
|
|
|
|
|
Keith Allman
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
|
April 25, 2017
|
|
/s/ John G. Sznewajs
|
|
|
|
|
John G. Sznewajs
|
|
|
|
|
Vice President and Chief Financial Officer
|
|