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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | — | $ | — | $ | — | $ | 762 | |||||||
Cost of sales | — | — | — | 603 | |||||||||||
Gross profit | — | — | — | 159 | |||||||||||
Selling, general and administrative expenses | — | — | — | 148 | |||||||||||
Income from discontinued operations | $ | — | $ | — | $ | — | $ | 11 | |||||||
Loss on disposal of discontinued operations, net | — | (1 | ) | — | (1 | ) | |||||||||
(Loss) income before income tax | — | (1 | ) | — | 10 | ||||||||||
Income tax benefit (expense) (A) | — | 1 | — | (11 | ) | ||||||||||
Loss from discontinued operations, net | $ | — | $ | — | $ | — | $ | (1 | ) |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Depreciation and amortization | $ | — | $ | 6 | |||
Capital expenditures | $ | — | $ | 7 |
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Gross Goodwill At September 30, 2016 | Accumulated Impairment Losses | Net Goodwill At September 30, 2016 | |||||||||
Plumbing Products | $ | 528 | $ | (340 | ) | $ | 188 | ||||
Decorative Architectural Products | 294 | (75 | ) | 219 | |||||||
Cabinetry Products | 240 | (59 | ) | 181 | |||||||
Windows and Other Specialty Products | 987 | (734 | ) | 253 | |||||||
Total | $ | 2,049 | $ | (1,208 | ) | $ | 841 |
Gross Goodwill At December 31, 2015 | Accumulated Impairment Losses | Net Goodwill At December 31, 2015 | Other(A) | Net Goodwill At September 30, 2016 | |||||||||||||||
Plumbing Products | $ | 525 | $ | (340 | ) | $ | 185 | $ | 3 | $ | 188 | ||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | 219 | |||||||||||||
Cabinetry Products | 240 | (59 | ) | 181 | — | 181 | |||||||||||||
Windows and Other Specialty Products | 988 | (734 | ) | 254 | (1 | ) | 253 | ||||||||||||
Total | $ | 2,047 | $ | (1,208 | ) | $ | 839 | $ | 2 | $ | 841 |
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September 30, 2016 | December 31, 2015 | ||||||
Prepaid expenses and other: | |||||||
Auction rate securities | $ | 12 | $ | — | |||
Other assets: | |||||||
Auction rate securities | — | 22 | |||||
Equity method investments | 14 | 13 | |||||
Private equity funds | 7 | 10 | |||||
Other investments | 3 | 3 | |||||
Total | $ | 36 | $ | 48 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized gains from auction rate securities | $ | — | $ | — | $ | 1 | $ | — | |||||||
Realized gains from private equity funds | 1 | 1 | 2 | 5 | |||||||||||
Equity investment income, net | — | — | 1 | 2 | |||||||||||
Total income from financial investments, net | $ | 1 | $ | 1 | $ | 4 | $ | 7 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Foreign currency contracts: | |||||||||||||||
Exchange contracts | $ | — | $ | — | $ | — | $ | 3 | |||||||
Forward contracts | — | 1 | — | (3 | ) | ||||||||||
Metals contracts | 1 | (9 | ) | 5 | (14 | ) | |||||||||
Interest rate swaps | — | — | (1 | ) | (1 | ) | |||||||||
Total gain (loss) | $ | 1 | $ | (8 | ) | $ | 4 | $ | (15 | ) |
At September 30, 2016 | |||||||
Notional Amount | Balance Sheet | ||||||
Foreign currency contracts: | |||||||
Exchange contracts | $ | 7 | |||||
Accrued liabilities | $ | — | |||||
Forward contracts | 28 | ||||||
Accrued liabilities | (1 | ) | |||||
Other liabilities | (1 | ) | |||||
Metals contracts | 13 | ||||||
Accrued liabilities | — |
At December 31, 2015 | |||||||
Notional Amount | Balance Sheet | ||||||
Foreign currency contracts: | |||||||
Exchange contracts | $ | 39 | |||||
Receivables | $ | 1 | |||||
Forward contracts | 30 | ||||||
Accrued liabilities | (2 | ) | |||||
Other liabilities | (1 | ) | |||||
Metals contracts | 50 | ||||||
Accrued liabilities | (10 | ) |
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Nine Months Ended September 30, 2016 | Twelve Months Ended December 31, 2015 | ||||||
Balance at January 1 | $ | 152 | $ | 135 | |||
Accruals for warranties issued during the period | 48 | 56 | |||||
Accruals related to pre-existing warranties | 36 | 15 | |||||
Settlements made (in cash or kind) during the period | (43 | ) | (50 | ) | |||
Other, net (including currency translation) | (1 | ) | (4 | ) | |||
Balance at end of period | $ | 192 | $ | 152 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Long-term stock awards | $ | 5 | $ | 6 | $ | 17 | $ | 19 | |||||||
Stock options | 1 | 1 | 2 | 5 | |||||||||||
Phantom stock awards and stock appreciation rights | 4 | — | 6 | 6 | |||||||||||
Total | $ | 10 | $ | 7 | $ | 25 | $ | 30 | |||||||
Income tax benefit (37 percent tax rate) | $ | 4 | $ | 3 | $ | 9 | $ | 11 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Unvested stock award shares at January 1 | 5 | 6 | |||||
Weighted average grant date fair value | $ | 17 | $ | 18 | |||
Stock award shares granted | 1 | 1 | |||||
Weighted average grant date fair value | $ | 26 | $ | 26 | |||
Stock award shares vested | 2 | 2 | |||||
Weighted average grant date fair value | $ | 16 | $ | 17 | |||
Stock award shares forfeited | — | — | |||||
Weighted average grant date fair value | $ | 20 | $ | 18 | |||
Forfeitures upon spin off (A) | — | 1 | |||||
Weighted average grant date fair value | $ | — | $ | 20 | |||
Modification upon spin off (B) | — | 1 | |||||
Unvested stock award shares at September 30 | 4 | 5 | |||||
Weighted average grant date fair value | $ | 20 | $ | 17 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Option shares outstanding, January 1 | 12 | 18 | |||||
Weighted average exercise price (A) | $ | 17 | $ | 21 | |||
Option shares granted | — | — | |||||
Weighted average exercise price | $ | 26 | $ | 26 | |||
Option shares exercised | 5 | 3 | |||||
Aggregate intrinsic value on date of exercise (B) | $ | 64 million | $ | 32 million | |||
Weighted average exercise price | $ | 21 | $ | 17 | |||
Option shares forfeited | — | 3 | |||||
Weighted average exercise price | $ | — | $ | 29 | |||
Forfeitures upon spin off (C) | — | — | |||||
Weighted average exercise price | $ | — | $ | 19 | |||
Modification upon spin off (A) | — | 2 | |||||
Option shares outstanding, September 30 | 7 | 14 | |||||
Weighted average exercise price | $ | 15 | $ | 17 | |||
Weighted average remaining option term (in years) | 4 | 4 | |||||
Option shares vested and expected to vest, September 30 | 7 | 14 | |||||
Weighted average exercise price | $ | 15 | $ | 17 | |||
Aggregate intrinsic value (B) | $ | 137 million | $ | 111 million | |||
Weighted average remaining option term (in years) | 4 | 4 | |||||
Option shares exercisable (vested), September 30 | 6 | 12 | |||||
Weighted average exercise price | $ | 13 | $ | 18 | |||
Aggregate intrinsic value (B) | $ | 117 million | $ | 96 million | |||
Weighted average remaining option term (in years) | 3 | 3 |
(A) | Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee Directors such that all individuals received an equivalent fair value both before and after the separation. The modification to the outstanding options was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan. The modification contributed to the lower exercise price. |
(B) | 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. |
(C) | In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Weighted average grant date fair value | $ | 6.43 | $ | 9.67 | |||
Risk-free interest rate | 1.41 | % | 1.75 | % | |||
Dividend yield | 1.49 | % | 1.32 | % | |||
Volatility factor | 29.00 | % | 42.00 | % | |||
Expected option life | 6 years | 6 years |
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Three Months Ended September 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Service cost | $ | 1 | $ | — | $ | — | $ | — | |||||||
Interest cost | 13 | 1 | 13 | 1 | |||||||||||
Expected return on plan assets | (15 | ) | — | (12 | ) | — | |||||||||
Amortization of net loss | 5 | 1 | 5 | 1 | |||||||||||
Net periodic pension cost | $ | 4 | $ | 2 | $ | 6 | $ | 2 |
Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Service cost | $ | 2 | $ | — | $ | 2 | $ | — | |||||||
Interest cost | 34 | 5 | 36 | 5 | |||||||||||
Expected return on plan assets | (34 | ) | — | (35 | ) | — | |||||||||
Amortization of net loss | 12 | 2 | 14 | 2 | |||||||||||
Net periodic pension cost | $ | 14 | $ | 7 | $ | 17 | $ | 7 |
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Amounts Reclassified | ||||||||||||||||||
Accumulated Other Comprehensive Loss | Three Months Ended September 30, | Nine Months Ended September 30, | Statement of Operations Line Item | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Amortization of defined benefit pension and other postretirement benefits: | ||||||||||||||||||
Actuarial losses, net | $ | 6 | $ | 6 | $ | 14 | $ | 16 | Selling, general and administrative expenses | |||||||||
Tax (benefit) | (3 | ) | (2 | ) | (5 | ) | (5 | ) | ||||||||||
Net of tax | $ | 3 | $ | 4 | $ | 9 | $ | 11 | ||||||||||
Interest rate swaps | $ | — | $ | — | $ | 1 | $ | 1 | Interest expense | |||||||||
Tax (benefit) | — | — | — | — | ||||||||||||||
Net of tax | $ | — | $ | — | $ | 1 | $ | 1 | ||||||||||
Available-for-sale securities | $ | — | $ | — | $ | (1 | ) | $ | — | Other, net | ||||||||
Tax expense | — | — | — | — | ||||||||||||||
Net of tax | $ | — | $ | — | $ | (1 | ) | $ | — |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Net Sales(A) | Operating Profit (Loss) | Net Sales(A) | Operating Profit (Loss) | ||||||||||||||||||||||||||||
Operations by segment (B): | |||||||||||||||||||||||||||||||
Plumbing Products | $ | 899 | $ | 853 | $ | 174 | $ | 137 | $ | 2,635 | $ | 2,495 | $ | 491 | $ | 386 | |||||||||||||||
Decorative Architectural Products | 536 | 527 | 111 | 102 | 1,649 | 1,600 | 355 | 318 | |||||||||||||||||||||||
Cabinetry Products | 239 | 253 | 19 | 21 | 736 | 771 | 77 | 32 | |||||||||||||||||||||||
Windows and Other Specialty Products | 203 | 206 | (10 | ) | 23 | 578 | 561 | (9 | ) | 50 | |||||||||||||||||||||
Total | $ | 1,877 | $ | 1,839 | $ | 294 | $ | 283 | $ | 5,598 | $ | 5,427 | $ | 914 | $ | 786 | |||||||||||||||
Operations by geographic area: | |||||||||||||||||||||||||||||||
North America | $ | 1,497 | $ | 1,462 | $ | 235 | $ | 234 | $ | 4,445 | $ | 4,298 | $ | 749 | $ | 645 | |||||||||||||||
International, principally Europe | 380 | 377 | 59 | 49 | 1,153 | 1,129 | 165 | 141 | |||||||||||||||||||||||
Total | $ | 1,877 | $ | 1,839 | 294 | 283 | $ | 5,598 | $ | 5,427 | 914 | 786 | |||||||||||||||||||
General corporate expense, net | (25 | ) | (25 | ) | (76 | ) | (84 | ) | |||||||||||||||||||||||
Operating profit | 269 | 258 | 838 | 702 | |||||||||||||||||||||||||||
Other income (expense), net | (42 | ) | (60 | ) | (181 | ) | (173 | ) | |||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 227 | $ | 198 | $ | 657 | $ | 529 |
(A) | Inter-segment sales were not material. |
(B) | In the first quarter of 2016, we renamed our Cabinetry Products and Windows and Other Specialty Products segments. The name change did not impact the review of financial information by our corporate operating executive or the composition of the segments. |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income from cash and cash investments | $ | 1 | $ | 1 | $ | 3 | $ | 2 | |||||||
Income from financial investments, net (Note E) | 1 | 1 | 4 | 7 | |||||||||||
Foreign currency transaction losses | (3 | ) | (8 | ) | (1 | ) | (13 | ) | |||||||
Other items, net | 2 | — | (1 | ) | 2 | ||||||||||
Total other, net | $ | 1 | $ | (6 | ) | $ | 5 | $ | (2 | ) |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | — | $ | — | $ | — | $ | 762 | |||||||
Cost of sales | — | — | — | 603 | |||||||||||
Gross profit | — | — | — | 159 | |||||||||||
Selling, general and administrative expenses | — | — | — | 148 | |||||||||||
Income from discontinued operations | $ | — | $ | — | $ | — | $ | 11 | |||||||
Loss on disposal of discontinued operations, net | — | (1 | ) | — | (1 | ) | |||||||||
(Loss) income before income tax | — | (1 | ) | — | 10 | ||||||||||
Income tax benefit (expense) (A) | — | 1 | — | (11 | ) | ||||||||||
Loss from discontinued operations, net | $ | — | $ | — | $ | — | $ | (1 | ) |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Depreciation and amortization | $ | — | $ | 6 | |||
Capital expenditures | $ | — | $ | 7 |
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Gross Goodwill At September 30, 2016 | Accumulated Impairment Losses | Net Goodwill At September 30, 2016 | |||||||||
Plumbing Products | $ | 528 | $ | (340 | ) | $ | 188 | ||||
Decorative Architectural Products | 294 | (75 | ) | 219 | |||||||
Cabinetry Products | 240 | (59 | ) | 181 | |||||||
Windows and Other Specialty Products | 987 | (734 | ) | 253 | |||||||
Total | $ | 2,049 | $ | (1,208 | ) | $ | 841 |
Gross Goodwill At December 31, 2015 | Accumulated Impairment Losses | Net Goodwill At December 31, 2015 | Other(A) | Net Goodwill At September 30, 2016 | |||||||||||||||
Plumbing Products | $ | 525 | $ | (340 | ) | $ | 185 | $ | 3 | $ | 188 | ||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | 219 | |||||||||||||
Cabinetry Products | 240 | (59 | ) | 181 | — | 181 | |||||||||||||
Windows and Other Specialty Products | 988 | (734 | ) | 254 | (1 | ) | 253 | ||||||||||||
Total | $ | 2,047 | $ | (1,208 | ) | $ | 839 | $ | 2 | $ | 841 |
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September 30, 2016 | December 31, 2015 | ||||||
Prepaid expenses and other: | |||||||
Auction rate securities | $ | 12 | $ | — | |||
Other assets: | |||||||
Auction rate securities | — | 22 | |||||
Equity method investments | 14 | 13 | |||||
Private equity funds | 7 | 10 | |||||
Other investments | 3 | 3 | |||||
Total | $ | 36 | $ | 48 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized gains from auction rate securities | $ | — | $ | — | $ | 1 | $ | — | |||||||
Realized gains from private equity funds | 1 | 1 | 2 | 5 | |||||||||||
Equity investment income, net | — | — | 1 | 2 | |||||||||||
Total income from financial investments, net | $ | 1 | $ | 1 | $ | 4 | $ | 7 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Foreign currency contracts: | |||||||||||||||
Exchange contracts | $ | — | $ | — | $ | — | $ | 3 | |||||||
Forward contracts | — | 1 | — | (3 | ) | ||||||||||
Metals contracts | 1 | (9 | ) | 5 | (14 | ) | |||||||||
Interest rate swaps | — | — | (1 | ) | (1 | ) | |||||||||
Total gain (loss) | $ | 1 | $ | (8 | ) | $ | 4 | $ | (15 | ) |
At September 30, 2016 | |||||||
Notional Amount | Balance Sheet | ||||||
Foreign currency contracts: | |||||||
Exchange contracts | $ | 7 | |||||
Accrued liabilities | $ | — | |||||
Forward contracts | 28 | ||||||
Accrued liabilities | (1 | ) | |||||
Other liabilities | (1 | ) | |||||
Metals contracts | 13 | ||||||
Accrued liabilities | — |
At December 31, 2015 | |||||||
Notional Amount | Balance Sheet | ||||||
Foreign currency contracts: | |||||||
Exchange contracts | $ | 39 | |||||
Receivables | $ | 1 | |||||
Forward contracts | 30 | ||||||
Accrued liabilities | (2 | ) | |||||
Other liabilities | (1 | ) | |||||
Metals contracts | 50 | ||||||
Accrued liabilities | (10 | ) |
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Nine Months Ended September 30, 2016 | Twelve Months Ended December 31, 2015 | ||||||
Balance at January 1 | $ | 152 | $ | 135 | |||
Accruals for warranties issued during the period | 48 | 56 | |||||
Accruals related to pre-existing warranties | 36 | 15 | |||||
Settlements made (in cash or kind) during the period | (43 | ) | (50 | ) | |||
Other, net (including currency translation) | (1 | ) | (4 | ) | |||
Balance at end of period | $ | 192 | $ | 152 |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Long-term stock awards | $ | 5 | $ | 6 | $ | 17 | $ | 19 | |||||||
Stock options | 1 | 1 | 2 | 5 | |||||||||||
Phantom stock awards and stock appreciation rights | 4 | — | 6 | 6 | |||||||||||
Total | $ | 10 | $ | 7 | $ | 25 | $ | 30 | |||||||
Income tax benefit (37 percent tax rate) | $ | 4 | $ | 3 | $ | 9 | $ | 11 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Unvested stock award shares at January 1 | 5 | 6 | |||||
Weighted average grant date fair value | $ | 17 | $ | 18 | |||
Stock award shares granted | 1 | 1 | |||||
Weighted average grant date fair value | $ | 26 | $ | 26 | |||
Stock award shares vested | 2 | 2 | |||||
Weighted average grant date fair value | $ | 16 | $ | 17 | |||
Stock award shares forfeited | — | — | |||||
Weighted average grant date fair value | $ | 20 | $ | 18 | |||
Forfeitures upon spin off (A) | — | 1 | |||||
Weighted average grant date fair value | $ | — | $ | 20 | |||
Modification upon spin off (B) | — | 1 | |||||
Unvested stock award shares at September 30 | 4 | 5 | |||||
Weighted average grant date fair value | $ | 20 | $ | 17 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Option shares outstanding, January 1 | 12 | 18 | |||||
Weighted average exercise price (A) | $ | 17 | $ | 21 | |||
Option shares granted | — | — | |||||
Weighted average exercise price | $ | 26 | $ | 26 | |||
Option shares exercised | 5 | 3 | |||||
Aggregate intrinsic value on date of exercise (B) | $ | 64 million | $ | 32 million | |||
Weighted average exercise price | $ | 21 | $ | 17 | |||
Option shares forfeited | — | 3 | |||||
Weighted average exercise price | $ | — | $ | 29 | |||
Forfeitures upon spin off (C) | — | — | |||||
Weighted average exercise price | $ | — | $ | 19 | |||
Modification upon spin off (A) | — | 2 | |||||
Option shares outstanding, September 30 | 7 | 14 | |||||
Weighted average exercise price | $ | 15 | $ | 17 | |||
Weighted average remaining option term (in years) | 4 | 4 | |||||
Option shares vested and expected to vest, September 30 | 7 | 14 | |||||
Weighted average exercise price | $ | 15 | $ | 17 | |||
Aggregate intrinsic value (B) | $ | 137 million | $ | 111 million | |||
Weighted average remaining option term (in years) | 4 | 4 | |||||
Option shares exercisable (vested), September 30 | 6 | 12 | |||||
Weighted average exercise price | $ | 13 | $ | 18 | |||
Aggregate intrinsic value (B) | $ | 117 million | $ | 96 million | |||
Weighted average remaining option term (in years) | 3 | 3 |
(A) | Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee Directors such that all individuals received an equivalent fair value both before and after the separation. The modification to the outstanding options was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan. The modification contributed to the lower exercise price. |
(B) | 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. |
(C) | In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Weighted average grant date fair value | $ | 6.43 | $ | 9.67 | |||
Risk-free interest rate | 1.41 | % | 1.75 | % | |||
Dividend yield | 1.49 | % | 1.32 | % | |||
Volatility factor | 29.00 | % | 42.00 | % | |||
Expected option life | 6 years | 6 years |
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Three Months Ended September 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Service cost | $ | 1 | $ | — | $ | — | $ | — | |||||||
Interest cost | 13 | 1 | 13 | 1 | |||||||||||
Expected return on plan assets | (15 | ) | — | (12 | ) | — | |||||||||
Amortization of net loss | 5 | 1 | 5 | 1 | |||||||||||
Net periodic pension cost | $ | 4 | $ | 2 | $ | 6 | $ | 2 |
Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Service cost | $ | 2 | $ | — | $ | 2 | $ | — | |||||||
Interest cost | 34 | 5 | 36 | 5 | |||||||||||
Expected return on plan assets | (34 | ) | — | (35 | ) | — | |||||||||
Amortization of net loss | 12 | 2 | 14 | 2 | |||||||||||
Net periodic pension cost | $ | 14 | $ | 7 | $ | 17 | $ | 7 |
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Amounts Reclassified | ||||||||||||||||||
Accumulated Other Comprehensive Loss | Three Months Ended September 30, | Nine Months Ended September 30, | Statement of Operations Line Item | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
Amortization of defined benefit pension and other postretirement benefits: | ||||||||||||||||||
Actuarial losses, net | $ | 6 | $ | 6 | $ | 14 | $ | 16 | Selling, general and administrative expenses | |||||||||
Tax (benefit) | (3 | ) | (2 | ) | (5 | ) | (5 | ) | ||||||||||
Net of tax | $ | 3 | $ | 4 | $ | 9 | $ | 11 | ||||||||||
Interest rate swaps | $ | — | $ | — | $ | 1 | $ | 1 | Interest expense | |||||||||
Tax (benefit) | — | — | — | — | ||||||||||||||
Net of tax | $ | — | $ | — | $ | 1 | $ | 1 | ||||||||||
Available-for-sale securities | $ | — | $ | — | $ | (1 | ) | $ | — | Other, net | ||||||||
Tax expense | — | — | — | — | ||||||||||||||
Net of tax | $ | — | $ | — | $ | (1 | ) | $ | — |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Net Sales(A) | Operating Profit (Loss) | Net Sales(A) | Operating Profit (Loss) | ||||||||||||||||||||||||||||
Operations by segment (B): | |||||||||||||||||||||||||||||||
Plumbing Products | $ | 899 | $ | 853 | $ | 174 | $ | 137 | $ | 2,635 | $ | 2,495 | $ | 491 | $ | 386 | |||||||||||||||
Decorative Architectural Products | 536 | 527 | 111 | 102 | 1,649 | 1,600 | 355 | 318 | |||||||||||||||||||||||
Cabinetry Products | 239 | 253 | 19 | 21 | 736 | 771 | 77 | 32 | |||||||||||||||||||||||
Windows and Other Specialty Products | 203 | 206 | (10 | ) | 23 | 578 | 561 | (9 | ) | 50 | |||||||||||||||||||||
Total | $ | 1,877 | $ | 1,839 | $ | 294 | $ | 283 | $ | 5,598 | $ | 5,427 | $ | 914 | $ | 786 | |||||||||||||||
Operations by geographic area: | |||||||||||||||||||||||||||||||
North America | $ | 1,497 | $ | 1,462 | $ | 235 | $ | 234 | $ | 4,445 | $ | 4,298 | $ | 749 | $ | 645 | |||||||||||||||
International, principally Europe | 380 | 377 | 59 | 49 | 1,153 | 1,129 | 165 | 141 | |||||||||||||||||||||||
Total | $ | 1,877 | $ | 1,839 | 294 | 283 | $ | 5,598 | $ | 5,427 | 914 | 786 | |||||||||||||||||||
General corporate expense, net | (25 | ) | (25 | ) | (76 | ) | (84 | ) | |||||||||||||||||||||||
Operating profit | 269 | 258 | 838 | 702 | |||||||||||||||||||||||||||
Other income (expense), net | (42 | ) | (60 | ) | (181 | ) | (173 | ) | |||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 227 | $ | 198 | $ | 657 | $ | 529 |
(A) | Inter-segment sales were not material. |
(B) | In the first quarter of 2016, we renamed our Cabinetry Products and Windows and Other Specialty Products segments. The name change did not impact the review of financial information by our corporate operating executive or the composition of the segments. |
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Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income from cash and cash investments | $ | 1 | $ | 1 | $ | 3 | $ | 2 | |||||||
Income from financial investments, net (Note E) | 1 | 1 | 4 | 7 | |||||||||||
Foreign currency transaction losses | (3 | ) | (8 | ) | (1 | ) | (13 | ) | |||||||
Other items, net | 2 | — | (1 | ) | 2 | ||||||||||
Total other, net | $ | 1 | $ | (6 | ) | $ | 5 | $ | (2 | ) |
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