mas-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 1-5794

Masco Corporation

(Exact name of Registrant as Specified in its Charter)


Delaware						38-1794485
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

17450 College Parkway,

Livonia,

Michigan

48152

(Address of Principal Executive Offices)

(Zip Code)

(313) 274-7400

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1.00 par value	MAS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Class						Shares Outstanding at March 31, 2021
Common stock, par value $1.00 per share						253,785,852

MASCO CORPORATION

INDEX


		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets — as at March 31, 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2021 and 2020	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	4
	Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2021 and 2020	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 6.	Exhibits	27
	Signature	28

MASCO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

March 31, 2021 and December 31, 2020

(In Millions, Except Share Data)


	March 31, 2021		December 31, 2020
ASSETS
Current Assets:
Cash and cash investments	$	838	$	1,326

Receivables	1,305		1,138

Prepaid expenses and other	97		149
Assets held for sale	18		—
Inventories:
Finished goods	601		552
Raw material	252		242
Work in process	95		82
	948		876
Total current assets	3,206		3,489
Property and equipment, net	894		908
Operating lease right-of-use assets	173		166
Goodwill	588		563
Other intangible assets, net	378		357
Other assets	326		294
Assets held for sale	9		—
Total assets	$	5,574	$	5,777

LIABILITIES
Current Liabilities:
Accounts payable	$	925	$	893
Notes payable	6		3
Accrued liabilities	803		1,038
Liabilities held for sale	14		—
Total current liabilities	1,748		1,934
Long-term debt	2,955		2,792
Noncurrent operating lease liabilities	157		149
Other liabilities	458		481
Liabilities held for sale	14		—
Total liabilities	5,332		5,356

Commitments and contingencies (Note P)
Redeemable noncontrolling interest	25		—

EQUITY
Masco Corporation's shareholders' equity:
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2021 – 253,100,000; 2020 – 258,200,000	253		258
Preferred shares authorized: 1,000,000; Issued and outstanding: 2021 and 2020 – None	—		—
Paid-in capital	—		—
Retained (deficit) earnings	(116)		79
Accumulated other comprehensive loss	(154)		(142)
Total Masco Corporation's shareholders' (deficit) equity	(17)		195
Noncontrolling interest	234		226
Total equity	217		421
Total liabilities and equity	$	5,574	$	5,777

See notes to condensed consolidated financial statements.

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

(In Millions, Except Per Common Share Data)


	Three Months Ended March 31,
		2021		2020
Net sales		$	1,970	$	1,581
Cost of sales		1,270		1,034
Gross profit		700		547
Selling, general and administrative expenses		335		322

Operating profit		365		225
Other income (expense), net:
Interest expense		(202)		(35)
Other, net		(6)		(16)
		(208)		(51)
Income from continuing operations before income taxes		157		174
Income tax expense		43		33
Income from continuing operations		114		141
Income from discontinued operations, net		—		397
Net income		114		538
Less: Net income attributable to noncontrolling interest		20		8
Net income attributable to Masco Corporation		$	94	$	530

Income per common share attributable to Masco Corporation:
Basic:
Income from continuing operations		$	.34	$	.49
Income from discontinued operations, net		—		1.44
Net income		$	.34	$	1.93
Diluted:
Income from continuing operations		$	.34	$	.48
Income from discontinued operations, net		—		1.44
Net income		$	.34	$	1.92

Amounts attributable to Masco Corporation:
Income from continuing operations		$	94	$	133
Income from discontinued operations, net		—		397
Net income		$	94	$	530

See notes to condensed consolidated financial statements.

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

(In Millions)


	Three Months Ended March 31,
		2021		2020
Net income		$	114	$	538
Less: Net income attributable to noncontrolling interest		20		8
Net income attributable to Masco Corporation		$	94	$	530
Other comprehensive income (loss), net of tax (Note L):
Cumulative translation adjustment		$	(36)	$	(29)
Interest rate swaps		7		—
Pension and other post-retirement benefits		5		5

Other comprehensive (loss), net of tax		(24)		(24)
Less: Other comprehensive (loss) attributable to noncontrolling interest		(12)		(4)
Other comprehensive (loss) attributable to Masco Corporation		$	(12)	$	(20)
Total comprehensive income		$	90	$	514
Less: Total comprehensive income attributable to noncontrolling interest		8		4
Total comprehensive income attributable to Masco Corporation		$	82	$	510

See notes to condensed consolidated financial statements.

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

(In Millions)


	Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Cash provided by operations	$	323	$	7
Increase in receivables	(195)		(183)
Increase in inventories	(78)		(21)
(Decrease) increase in accounts payable and accrued liabilities, net	(139)		105
Net cash for operating activities	(89)		(92)

CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:


Retirement of notes	(1,326)		—
Purchase of Company common stock	(303)		(602)

Cash dividends paid	(36)		(37)

Issuance of notes, net of issuance costs	1,481		—
Debt extinguishment costs	(160)		—
Proceeds from the exercise of stock options	—		20
Employee withholding taxes paid on stock-based compensation	(14)		(22)
(Decrease) increase in debt, net	(1)		2


Net cash for financing activities	(359)		(639)

CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
Capital expenditures	(30)		(24)
Acquisition of business, net of cash acquired	—		(24)
Proceeds from disposition of:
Businesses, net of cash disposed	—		853

Other financial investments	1

SEC Form 10-Q filed by Masco Corporation