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Year Ended December 31 | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net sales (1) | $ | — | $ | 762 | $ | 1,515 | |||||
Cost of sales (1) | — | 603 | 1,188 | ||||||||
Gross profit (1) | — | 159 | 327 | ||||||||
Selling, general and administrative expenses (1) | — | 148 | 259 | ||||||||
Income from discontinued operations | $ | — | $ | 11 | $ | 68 | |||||
Other discontinued operations results: | |||||||||||
Loss on disposal of discontinued operations, net (2) | — | (1 | ) | (6 | ) | ||||||
Income before income tax | — | 10 | 62 | ||||||||
Income tax expense (3) | — | (12 | ) | (27 | ) | ||||||
(Loss) income from discontinued operations, net | $ | — | $ | (2 | ) | $ | 35 |
(1) | Net sales, cost of sales, gross profit, and selling, general and administrative expenses reflect the results of TopBuild. |
(2) | Included in loss on disposal of discontinued operations, net in 2014 are additional costs and charges related to the 2013 sale of Tvilum, our Danish ready-to-assemble cabinet business. |
(3) | The unusual relationship between income tax expense and income before income tax for 2015 resulted primarily from certain non-deductible transaction costs related to the spin off of TopBuild. |
Year Ended December 31 | |||||||||||
2016 | 2015 | 2014 | |||||||||
Depreciation and amortization | $ | — | $ | 6 | $ | 26 | |||||
Capital expenditures | $ | — | $ | 7 | $ | 13 |
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(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Finished goods | $ | 366 | $ | 358 | |||
Raw material | 254 | 238 | |||||
Work in process | 92 | 91 | |||||
Total | $ | 712 | $ | 687 |
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At December 31 | |||||||
2016 | 2015 | ||||||
Auction rate securities | $ | — | $ | 22 | |||
Total recurring investments | — | 22 | |||||
Equity method investments | 13 | 13 | |||||
Private equity funds | 5 | 10 | |||||
Other investments | — | 3 | |||||
Total | $ | 18 | $ | 48 |
2016 | 2015 | 2014 | |||||||||
Realized gains from auction rate securities | $ | 3 | $ | — | $ | — | |||||
Equity investment income (loss), net | 2 | 2 | (2 | ) | |||||||
Realized gains from private equity funds | 5 | 6 | 4 | ||||||||
Loss from other investments | (3 | ) | — | — | |||||||
Income from financial investments, net | $ | 7 | $ | 8 | $ | 2 |
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Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Foreign currency contracts: | |||||||||||
Exchange contracts | $ | — | $ | 4 | $ | 5 | |||||
Forward contracts | — | (3 | ) | — | |||||||
Metals contracts | 5 | (17 | ) | (3 | ) | ||||||
Interest rate swaps | (2 | ) | (2 | ) | (2 | ) | |||||
Total | $ | 3 | $ | (18 | ) | $ | — |
At December 31, 2016 | |||||||
Notional Amount | Balance Sheet | ||||||
Foreign currency contracts | |||||||
Forward contracts | $ | 21 | |||||
Accrued liabilities | $ | (2 | ) | ||||
Metals contracts | 1 | ||||||
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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(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Land and improvements | $ | 111 | $ | 115 | |||
Buildings | 712 | 672 | |||||
Machinery and equipment | 1,795 | 1,787 | |||||
2,618 | 2,574 | ||||||
Less: Accumulated depreciation | (1,558 | ) | (1,547 | ) | |||
Total | $ | 1,060 | $ | 1,027 |
2017 | $ | 44 | |
2018 | 35 | ||
2019 | 25 | ||
2020 | 19 | ||
2021 | 16 | ||
2022 and beyond | 50 |
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Gross Goodwill At December 31, 2016 | Accumulated Impairment Losses | Net Goodwill At December 31, 2016 | |||||||||
Plumbing Products | $ | 519 | $ | (340 | ) | $ | 179 | ||||
Decorative Architectural Products | 294 | (75 | ) | 219 | |||||||
Cabinetry Products | 240 | (59 | ) | 181 | |||||||
Windows and Other Specialty Products | 987 | (734 | ) | 253 | |||||||
Total | $ | 2,040 | $ | (1,208 | ) | $ | 832 |
Gross Goodwill At December 31, 2015 | Accumulated Impairment Losses | Net Goodwill At December 31, 2015 | Additions (A) | Other (B) | Net Goodwill At December 31, 2016 | ||||||||||||||||||
Plumbing Products | $ | 525 | $ | (340 | ) | $ | 185 | $ | — | $ | (6 | ) | $ | 179 | |||||||||
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 | $ | — | $ | (7 | ) | $ | 832 |
Gross Goodwill At December 31, 2014 | Accumulated Impairment Losses | Net Goodwill At December 31, 2014 | Additions (A) | Other (B) | Net Goodwill At December 31, 2015 | ||||||||||||||||||
Plumbing Products | $ | 531 | $ | (340 | ) | $ | 191 | $ | 8 | $ | (14 | ) | $ | 185 | |||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | — | 219 | ||||||||||||||||
Cabinetry Products | 240 | (59 | ) | 181 | — | — | 181 | ||||||||||||||||
Windows and Other Specialty Products | 983 | (734 | ) | 249 | 6 | (1 | ) | 254 | |||||||||||||||
Total | $ | 2,048 | $ | (1,208 | ) | $ | 840 | $ | 14 | $ | (15 | ) | $ | 839 |
(A) | Additions consist of acquisitions. |
(B) | Other principally includes the effect of foreign currency translation. |
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(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Financial investments (Note E) | $ | 18 | $ | 48 | |||
In-store displays, net | 42 | 56 | |||||
Deferred tax assets (Note S) | 68 | 184 | |||||
Other | 29 | 22 | |||||
Total | $ | 157 | $ | 310 |
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(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Salaries, wages and commissions | $ | 191 | $ | 171 | |||
Advertising and sales promotion | 146 | 132 | |||||
Interest | 51 | 62 | |||||
Warranty (Note U) | 56 | 50 | |||||
Employee retirement plans | 52 | 48 | |||||
Insurance reserves | 41 | 44 | |||||
Property, payroll and other taxes | 19 | 25 | |||||
Dividends payable | 32 | 32 | |||||
Other | 70 | 86 | |||||
Total | $ | 658 | $ | 650 |
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(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Notes and debentures: | |||||||
6.125%, due October 3, 2016 | $ | — | $ | 1,000 | |||
5.850%, due March 15, 2017 | — | 300 | |||||
6.625%, due April 15, 2018 | 114 | 114 | |||||
7.125%, due March 15, 2020 | 500 | 500 | |||||
3.500%, due April 1, 2021 | 399 | — | |||||
5.950%, due March 15, 2022 | 400 | 400 | |||||
4.450%, due April 1, 2025 | 500 | 500 | |||||
4.375%, due April 1, 2026 | 498 | — | |||||
7.750%, due August 1, 2029 | 296 | 296 | |||||
6.500%, due August 15, 2032 | 300 | 300 | |||||
Other | 9 | 13 | |||||
Prepaid debt issuance costs | (19 | ) | (16 | ) | |||
2,997 | 3,407 | ||||||
Less: Current portion | 2 | 1,004 | |||||
Total long-term debt | $ | 2,995 | $ | 2,403 |
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2016 | 2015 | 2014 | |||||||||
Long-term stock awards | $ | 23 | $ | 23 | $ | 33 | |||||
Stock options | 2 | 5 | 4 | ||||||||
Phantom stock awards and stock appreciation rights | 4 | 11 | 6 | ||||||||
Total | $ | 29 | $ | 39 | $ | 43 | |||||
Income tax benefit (37 percent tax rate) | $ | 11 | $ | 14 | $ | 16 |
2016 | 2015 | 2014 | |||||||||
Unvested stock award shares at January 1 | 5 | 6 | 8 | ||||||||
Weighted average grant date fair value | $ | 17 | $ | 18 | $ | 17 | |||||
Stock award shares granted | 1 | 1 | 1 | ||||||||
Weighted average grant date fair value | $ | 26 | $ | 26 | $ | 22 | |||||
Stock award shares vested | 2 | 2 | 2 | ||||||||
Weighted average grant date fair value | $ | 16 | $ | 17 | $ | 17 | |||||
Stock award shares forfeited | — | — | 1 | ||||||||
Weighted average grant date fair value | $ | 20 | $ | 18 | $ | 19 | |||||
Forfeitures upon spin off (A) | — | 1 | — | ||||||||
Weighted average grant date fair value | $ | — | $ | 20 | $ | — | |||||
Modification upon spin off (B) | — | 1 | — | ||||||||
Unvested stock award shares at December 31 | 4 | 5 | 6 | ||||||||
Weighted average grant date fair value | $ | 20 | $ | 17 | $ | 18 |
(A) | In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. |
(B) | 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 stock awards was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan. |
2016 | 2015 | 2014 | |||||||||
Option shares outstanding, January 1 | 12 | 18 | 24 | ||||||||
Weighted average exercise price | $ | 17 | $ | 21 | $ | 22 | |||||
Option shares granted | — | — | — | ||||||||
Weighted average exercise price | $ | 26 | $ | 26 | $ | 22 | |||||
Option shares exercised | 5 | 5 | 2 | ||||||||
Aggregate intrinsic value on date of exercise (A) | $ | 64 | million | $ | 50 | million | $ | 22 | million | ||
Weighted average exercise price | $ | 21 | $ | 17 | $ | 16 | |||||
Option shares forfeited | — | 3 | 4 | ||||||||
Weighted average exercise price | $ | — | $ | 29 | $ | 28 | |||||
Forfeitures upon spin off (B) | — | — | — | ||||||||
Weighted average exercise price | $ | — | $ | 19 | $ | — | |||||
Modifications upon spin off (C) | — | 2 | — | ||||||||
Option shares outstanding, December 31 | 7 | 12 | 18 | ||||||||
Weighted average exercise price | $ | 15 | $ | 17 | $ | 21 | |||||
Weighted average remaining option term (in years) | 4 | 3 | 4 | ||||||||
Option shares vested and expected to vest, December 31 | 7 | 12 | 18 | ||||||||
Weighted average exercise price | $ | 15 | $ | 17 | $ | 21 | |||||
Aggregate intrinsic value (A) | $ | 118 | million | $ | 133 | million | $ | 110 | million | ||
Weighted average remaining option term (in years) | 4 | 3 | 4 | ||||||||
Option shares exercisable (vested), December 31 | 6 | 10 | 15 | ||||||||
Weighted average exercise price | $ | 13 | $ | 18 | $ | 22 | |||||
Aggregate intrinsic value (A) | $ | 102 | million | $ | 113 | million | $ | 84 | million | ||
Weighted average remaining option term (in years) | 3 | 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. |
(B) | In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. |
(C) | 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. |
2016 | 2015 | 2014 | |||||||||
Weighted average grant date fair value | $ | 6.43 | $ | 9.67 | $ | 9.53 | |||||
Risk-free interest rate | 1.41 | % | 1.75 | % | 1.91 | % | |||||
Dividend yield | 1.49 | % | 1.32 | % | 1.34 | % | |||||
Volatility factor | 29.00 | % | 42.00 | % | 49.00 | % | |||||
Expected option life | 6 years | 6 years | 6 years |
Option Shares Outstanding | Option Shares Exercisable | ||||||||||
Range of Prices | Number of Shares | Weighted Average Remaining Option Term | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||
$ | 7 - 18 | 5 | 3 Years | $12 | 5 | $12 | |||||
$ | 20 - 23 | 1 | 8 Years | $22 | — | $21 | |||||
$ | 26 - 27 | 1 | 5 Years | $26 | 1 | $27 | |||||
$ | 7 - 27 | 7 | 4 Years | $15 | 6 | $13 |
Phantom Stock Awards | Stock Appreciation Rights | ||||||||||||||
At December 31, | At December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Accrued compensation cost liability | $ | 10 | $ | 13 | $ | 8 | $ | 10 | |||||||
Unrecognized compensation cost | $ | 4 | $ | 4 | $ | — | $ | — | |||||||
Equivalent common shares | — | 1 | 1 | 1 |
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2016 | 2015 | 2014 | |||||||||
Defined-contribution plans | $ | 58 | $ | 52 | $ | 43 | |||||
Defined-benefit pension plans | 34 | 32 | 25 | ||||||||
$ | 92 | $ | 84 | $ | 68 |
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Changes in projected benefit obligation: | |||||||||||||||
Projected benefit obligation at January 1 | $ | 1,059 | $ | 174 | $ | 1,145 | $ | 190 | |||||||
Service cost | 3 | — | 3 | — | |||||||||||
Interest cost | 41 | 7 | 41 | 7 | |||||||||||
Actuarial (gain) loss, net | 50 | 1 | (61 | ) | (11 | ) | |||||||||
Foreign currency exchange | (29 | ) | — | (23 | ) | — | |||||||||
Benefit payments | (69 | ) | (12 | ) | (46 | ) | (12 | ) | |||||||
Projected benefit obligation at December 31 | $ | 1,055 | $ | 170 | $ | 1,059 | $ | 174 | |||||||
Changes in fair value of plan assets: | |||||||||||||||
Fair value of plan assets at January 1 | $ | 658 | $ | — | $ | 691 | $ | — | |||||||
Actual return on plan assets | 58 | — | (12 | ) | — | ||||||||||
Foreign currency exchange | (20 | ) | — | (7 | ) | — | |||||||||
Company contributions | 100 | 12 | 38 | 12 | |||||||||||
Expenses, other | (10 | ) | — | (6 | ) | — | |||||||||
Benefit payments | (69 | ) | (12 | ) | (46 | ) | (12 | ) | |||||||
Fair value of plan assets at December 31 | $ | 717 | $ | — | $ | 658 | $ | — | |||||||
Funded status at December 31: | $ | (338 | ) | $ | (170 | ) | $ | (401 | ) | $ | (174 | ) |
At December 31, 2016 | At December 31, 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Other assets | $ | 2 | $ | — | $ | 1 | $ | — | |||||||
Accrued liabilities | (1 | ) | (12 | ) | (3 | ) | (12 | ) | |||||||
Other liabilities | (339 | ) | (158 | ) | (399 | ) | (162 | ) | |||||||
Total net liability | $ | (338 | ) | $ | (170 | ) | $ | (401 | ) | $ | (174 | ) |
At December 31, 2016 | At December 31, 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Net loss | $ | 519 | $ | 54 | $ | 501 | $ | 56 | |||||||
Net transition obligation | 1 | — | 1 | — | |||||||||||
Net prior service cost | 3 | — | 2 | — | |||||||||||
Total | $ | 523 | $ | 54 | $ | 504 | $ | 56 |
At December 31 | |||||||||||||||
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Projected benefit obligation | $ | 1,044 | $ | 170 | $ | 1,045 | $ | 174 | |||||||
Accumulated benefit obligation | $ | 1,044 | $ | 170 | $ | 1,045 | $ | 174 | |||||||
Fair value of plan assets | $ | 704 | $ | — | $ | 643 | $ | — |
2016 | 2015 | 2014 | |||||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||||||||
Service cost | $ | 3 | $ | — | $ | 3 | $ | — | $ | 3 | $ | — | |||||||||||
Interest cost | 49 | 7 | 47 | 7 | 47 | 7 | |||||||||||||||||
Expected return on plan assets | (44 | ) | — | (46 | ) | — | (45 | ) | — | ||||||||||||||
Recognized net loss | 17 | 2 | 18 | 3 | 11 | 2 | |||||||||||||||||
Net periodic pension cost | $ | 25 | $ | 9 | $ | 22 | $ | 10 | $ | 16 | $ | 9 |
2016 | 2015 | ||||
Equity securities | 49 | % | 49 | % | |
Debt securities | 32 | % | 32 | % | |
Other | 19 | % | 19 | % | |
Total | 100 | % | 100 | % |
At December 31, 2016 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Measured at NAV | Total | |||||||||||||||
Plan Assets | |||||||||||||||||||
Common and Preferred Stocks: | |||||||||||||||||||
United States | $ | 142 | $ | — | $ | — | $ | 118 | $ | 260 | |||||||||
International | 74 | — | — | 16 | 90 | ||||||||||||||
Private Equity and Hedge Funds: | |||||||||||||||||||
United States | — | — | 37 | — | 37 | ||||||||||||||
International | — | — | 24 | 32 | 56 | ||||||||||||||
Corporate Debt Securities: | |||||||||||||||||||
United States | 27 | 28 | — | 2 | 57 | ||||||||||||||
International | — | 26 | — | 17 | 43 | ||||||||||||||
Government and Other Debt Securities: | |||||||||||||||||||
United States | 46 | 4 | — | — | 50 | ||||||||||||||
International | 27 | 53 | — | — | 80 | ||||||||||||||
Common Collective Trust Fund – United States | — | 4 | — | — | 4 | ||||||||||||||
Short-Term and Other Investments: | |||||||||||||||||||
United States | 2 | — | — | — | 2 | ||||||||||||||
International | 5 | 15 | 18 | — | 38 | ||||||||||||||
Total Plan Assets | $ | 323 | $ | 130 | $ | 79 | $ | 185 | $ | 717 |
At December 31, 2015 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Measured at NAV | Total | |||||||||||||||
Plan Assets | |||||||||||||||||||
Common and Preferred Stocks: | |||||||||||||||||||
United States | $ | 127 | $ | 33 | $ | — | $ | 93 | $ | 253 | |||||||||
International | 55 | 7 | — | 7 | 69 | ||||||||||||||
Private Equity and Hedge Funds: | |||||||||||||||||||
United States | — | — | 49 | 3 | 52 | ||||||||||||||
International | — | — | 20 | 4 | 24 | ||||||||||||||
Corporate Debt Securities: | |||||||||||||||||||
United States | 18 | 26 | — | — | 44 | ||||||||||||||
International | — | 32 | — | 16 | 48 | ||||||||||||||
Government and Other Debt Securities: | |||||||||||||||||||
United States | 64 | 3 | — | — | 67 | ||||||||||||||
International | 23 | 30 | — | — | 53 | ||||||||||||||
Common Collective Trust Fund – United States | — | 4 | — | — | 4 | ||||||||||||||
Short-Term and Other Investments: | |||||||||||||||||||
United States | 2 | — | — | — | 2 | ||||||||||||||
International | 2 | 21 | 19 | — | 42 | ||||||||||||||
Total Plan Assets | $ | 291 | $ | 156 | $ | 88 | $ | 123 | $ | 658 |
2016 | 2015 | ||||||
Fair Value, January 1 | $ | 88 | $ | 97 | |||
Purchases | 6 | 4 | |||||
Sales | (19 | ) | (11 | ) | |||
Transfers, net | — | — | |||||
Unrealized gains (losses) | 4 | (2 | ) | ||||
Fair Value, December 31 | $ | 79 | $ | 88 |
2016 | 2015 | 2014 | ||||||
Discount rate for obligations | 3.50 | % | 4.00 | % | 3.80 | % | ||
Expected return on plan assets | 7.25 | % | 7.25 | % | 7.25 | % | ||
Rate of compensation increase | — | — | — | |||||
Discount rate for net periodic pension cost | 4.00 | % | 3.80 | % | 4.40 | % |
Qualified Plans | Non-Qualified Plans | ||||||
2017 | $ | 49 | $ | 12 | |||
2018 | $ | 50 | $ | 12 | |||
2019 | $ | 50 | $ | 12 | |||
2020 | $ | 52 | $ | 12 | |||
2021 | $ | 52 | $ | 12 | |||
2022 - 2026 | $ | 272 | $ | 58 |
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At December 31 | |||||||
2016 | 2015 | ||||||
Cumulative translation adjustments, net | $ | 177 | $ | 245 | |||
Unrealized loss on available-for-sale securities, net | — | (12 | ) | ||||
Unrealized loss on interest rate swaps, net | (15 | ) | (16 | ) | |||
Unrecognized net loss and prior service cost, net | (397 | ) | (382 | ) | |||
Accumulated other comprehensive loss | $ | (235 | ) | $ | (165 | ) |
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Accumulated Other Comprehensive Income (Loss) | 2016 | 2015 | 2014 | Statement of Operations Line Item | ||||||||||
Amortization of defined benefit pension and other postretirement benefits: | ||||||||||||||
Actuarial losses, net | $ | 19 | $ | 21 | $ | 13 | Selling, general and administrative expenses | |||||||
Tax (benefit) | (7 | ) | (8 | ) | (5 | ) | ||||||||
Net of tax | $ | 12 | $ | 13 | $ | 8 | ||||||||
Interest rate swaps | $ | 2 | $ | 2 | $ | 2 | Interest expense | |||||||
Tax (benefit) | (1 | ) | — | (1 | ) | |||||||||
Net of tax | $ | 1 | $ | 2 | $ | 1 | ||||||||
Available-for-sale securities | $ | (3 | ) | $ | — | $ | — | Other, net | ||||||
Tax expense | 15 | — | — | |||||||||||
Net of tax | $ | 12 | $ | — | $ | — |
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Net Sales (1)(2)(3)(4)(5) | Operating Profit (Loss) (5)(6) | Assets at December 31 (8) | |||||||||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||
Our operations by segment were: (9) | |||||||||||||||||||||||||||||||||||
Plumbing Products | $ | 3,526 | $ | 3,341 | $ | 3,308 | $ | 642 | $ | 512 | $ | 512 | $ | 2,009 | $ | 1,972 | $ | 1,989 | |||||||||||||||||
Decorative Architectural Products | 2,092 | 2,020 | 1,998 | 430 | 403 | 360 | 894 | 874 | 857 | ||||||||||||||||||||||||||
Cabinetry Products | 970 | 1,025 | 999 | 93 | 51 | (62 | ) | 537 | 567 | 608 | |||||||||||||||||||||||||
Windows and Other Specialty Products | 769 | 756 | 701 | (3 | ) | 57 | 47 | 743 | 748 | 702 | |||||||||||||||||||||||||
Total | $ | 7,357 | $ | 7,142 | $ | 7,006 | $ | 1,162 | $ | 1,023 | $ | 857 | $ | 4,183 | $ | 4,161 | $ | 4,156 | |||||||||||||||||
Our operations by geographic area were: | |||||||||||||||||||||||||||||||||||
North America | $ | 5,834 | $ | 5,645 | $ | 5,377 | $ | 961 | $ | 841 | $ | 643 | $ | 3,001 | $ | 2,925 | $ | 2,861 | |||||||||||||||||
International, principally Europe | 1,523 | 1,497 | 1,629 | 201 | 182 | 214 | 1,182 | 1,236 | 1,295 | ||||||||||||||||||||||||||
Total, as above | $ | 7,357 | $ | 7,142 | $ | 7,006 | 1,162 | 1,023 | 857 | 4,183 | 4,161 | 4,156 | |||||||||||||||||||||||
General corporate expense, net (6) | (109 | ) | (109 | ) | (145 | ) | |||||||||||||||||||||||||||||
Income from litigation settlements (7) | — | — | 9 | ||||||||||||||||||||||||||||||||
Operating profit, as reported | 1,053 | 914 | 721 | ||||||||||||||||||||||||||||||||
Other income (expense), net | (223 | ) | (225 | ) | (214 | ) | |||||||||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 830 | $ | 689 | $ | 507 | |||||||||||||||||||||||||||||
Corporate assets (10) | 954 | 1,503 | 1,576 | ||||||||||||||||||||||||||||||||
Assets held for sale | — | — | 1,476 | ||||||||||||||||||||||||||||||||
Total assets | $ | 5,137 | $ | 5,664 | $ | 7,208 |
Property Additions (5) | Depreciation and Amortization (5) | ||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Our operations by segment were: (9) | |||||||||||||||||||||||
Plumbing Products | $ | 110 | $ | 87 | $ | 65 | $ | 57 | $ | 56 | $ | 63 | |||||||||||
Decorative Architectural Products | 22 | 16 | 12 | 16 | 16 | 16 | |||||||||||||||||
Cabinetry Products | 8 | 6 | 9 | 21 | 24 | 33 | |||||||||||||||||
Windows and Other Specialty Products | 30 | 41 | 28 | 21 | 18 | 18 | |||||||||||||||||
170 | 150 | 114 | 115 | 114 | 130 | ||||||||||||||||||
Unallocated amounts, principally related to corporate assets | 10 | 1 | 1 | 19 | 13 | 11 | |||||||||||||||||
Total | $ | 180 | $ | 151 | $ | 115 | $ | 134 | $ | 127 | $ | 141 |
(1) | Included in net sales were export sales from the U.S. of $226 million, $217 million and $228 million in 2016, 2015 and 2014, respectively. |
(2) | Excluded from net sales were intra-company sales between segments of less than one percent in 2016, 2015 and 2014. |
(3) | Included in net sales were sales to one customer of $2,480 million, $2,378 million and $2,310 million in 2016, 2015 and 2014, respectively. Such net sales were included in each of our segments. |
(4) | Net sales from our operations in the U.S. were $5,605 million, $5,407 million and $5,112 million in 2016, 2015 and 2014, respectively. |
(5) | Net sales, operating profit (loss), property additions and depreciation and amortization expense for 2015 and 2014 excluded the results of businesses reported as discontinued operations. |
(6) | General corporate expense, net included those expenses not specifically attributable to our segments. |
(7) | The income from litigation settlements in 2014 relates to a business in our Decorative Architectural Products segment. |
(8) | Long-lived assets of our operations in the U.S. and Europe were $1,508 million and $417 million, $1,487 million and $427 million, and $1,470 million and $428 million at December 31, 2016, 2015 and 2014, respectively. |
(9) | In 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. |
(10) | Corporate assets at December 31, 2014 has not been recasted for the impact of the adoption of Accounting Standards Update 2015-03, as amended by Accounting Standards Update 2015-15, which required the reclassification of certain debt issuance costs from an asset to a liability. Total debt issuance costs subject to reclassification would have been $15 million at December 31, 2014. |
|
|
2016 | 2015 | 2014 | |||||||||
Income from cash and cash investments and short-term bank deposits | $ | 4 | $ | 3 | $ | 3 | |||||
Income from financial investments, net (Note E) | 7 | 8 | 2 | ||||||||
Foreign currency transaction (losses) gains | (3 | ) | (14 | ) | 5 | ||||||
Other items, net | (2 | ) | 3 | 1 | |||||||
Total other, net | $ | 6 | $ | — | $ | 11 |
|
(In Millions) | |||||||||||
2016 | 2015 | 2014 | |||||||||
Income from continuing operations before income taxes: | |||||||||||
U.S. | $ | 614 | $ | 496 | $ | 270 | |||||
Foreign | 216 | 193 | 237 | ||||||||
$ | 830 | $ | 689 | $ | 507 | ||||||
Income tax expense (benefit) on income from continuing operations: | |||||||||||
Currently payable: | |||||||||||
U.S. Federal | $ | 73 | $ | 10 | $ | 3 | |||||
State and local | 24 | 27 | 1 | ||||||||
Foreign | 69 | 56 | 67 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 140 | 192 | (401 | ) | |||||||
State and local | 2 | 3 | (21 | ) | |||||||
Foreign | (12 | ) | 5 | (10 | ) | ||||||
$ | 296 | $ | 293 | $ | (361 | ) | |||||
Deferred tax assets at December 31: | |||||||||||
Receivables | $ | 10 | $ | 9 | |||||||
Inventories | 17 | 17 | |||||||||
Other assets, including stock-based compensation | 58 | 78 | |||||||||
Accrued liabilities | 53 | 77 | |||||||||
Long-term liabilities | 280 | 266 | |||||||||
Net operating loss carryforward | 51 | 39 | |||||||||
Tax credit carryforward | 9 | 55 | |||||||||
478 | 541 | ||||||||||
Valuation allowance | (45 | ) | (49 | ) | |||||||
433 | 492 | ||||||||||
Deferred tax liabilities at December 31: | |||||||||||
Property and equipment | 127 | 104 | |||||||||
Intangibles | 222 | 212 | |||||||||
Investment in foreign subsidiaries | 15 | 8 | |||||||||
Other | 21 | 1 | |||||||||
385 | 325 | ||||||||||
Net deferred tax asset at December 31 | $ | 48 | $ | 167 |
2016 | 2015 | 2014 | ||||||
U.S. Federal statutory tax rate – expense | 35 | % | 35 | % | 35 | % | ||
State and local taxes, net of U.S. Federal tax benefit | 2 | 3 | (2 | ) | ||||
Lower taxes on foreign earnings | (2 | ) | (1 | ) | (5 | ) | ||
U.S. and foreign taxes on distributed and undistributed foreign earnings | 1 | 3 | — | |||||
Domestic production deduction | (1 | ) | — | — | ||||
U.S. Federal valuation allowance | — | 3 | (98 | ) | ||||
Other, net | 1 | — | (1 | ) | ||||
Effective tax rate – expense (benefit) | 36 | % | 43 | % | (71 | )% |
Uncertain Tax Positions | Interest and Penalties | Total | |||||||||
Balance at January 1, 2015 | $ | 39 | $ | 9 | $ | 48 | |||||
Current year tax positions: | |||||||||||
Additions | 10 | — | 10 | ||||||||
Prior year tax positions: | |||||||||||
Additions | 1 | — | 1 | ||||||||
Reductions | (1 | ) | — | (1 | ) | ||||||
Lapse of applicable statute of limitations | (6 | ) | — | (6 | ) | ||||||
Interest and penalties recognized in income tax expense | — | 1 | 1 | ||||||||
Balance at December 31, 2015 | $ | 43 | $ | 10 | $ | 53 | |||||
Current year tax positions: | |||||||||||
Additions | 11 | — | 11 | ||||||||
Reductions | (1 | ) | — | (1 | ) | ||||||
Prior year tax positions: | |||||||||||
Additions | 1 | — | 1 | ||||||||
Reductions | (2 | ) | — | (2 | ) | ||||||
Lapse of applicable statute of limitations | (6 | ) | — | (6 | ) | ||||||
Interest and penalties recognized in income tax expense | — | (1 | ) | (1 | ) | ||||||
Balance at December 31, 2016 | $ | 46 | $ | 9 | $ | 55 |
|
2016 | 2015 | 2014 | |||||||||
Numerator (basic and diluted): | |||||||||||
Income from continuing operations | $ | 491 | $ | 357 | $ | 821 | |||||
Less: Allocation to unvested restricted stock awards | 6 | 5 | 16 | ||||||||
Income from continuing operations attributable to common shareholders | 485 | 352 | 805 | ||||||||
(Loss) income from discontinued operations, net | — | (2 | ) | 35 | |||||||
Less: Allocation to unvested restricted stock awards | — | — | (1 | ) | |||||||
(Loss) income from discontinued operations attributable to common shareholders | — | (2 | ) | 34 | |||||||
Net income available to common shareholders | $ | 485 | $ | 350 | $ | 839 | |||||
Denominator: | |||||||||||
Basic common shares (based upon weighted average) | 326 | 338 | 349 | ||||||||
Add: Stock option dilution | 4 | 3 | 3 | ||||||||
Diluted common shares | 330 | 341 | 352 |
|
2016 | 2015 | ||||||
Balance at January 1 | $ | 152 | $ | 135 | |||
Accruals for warranties issued during the year | 66 | 56 | |||||
Accruals related to pre-existing warranties | 33 | 15 | |||||
Settlements made (in cash or kind) during the year | (56 | ) | (50 | ) | |||
Other, net (including currency translation) | (3 | ) | (4 | ) | |||
Balance at December 31 | $ | 192 | $ | 152 |
|
Quarters Ended | |||||||||||||||||||
(In Millions, Except Per Common Share Data) | |||||||||||||||||||
Total Year | December 31 | September 30 | June 30 | March 31 | |||||||||||||||
2016 | |||||||||||||||||||
Net sales | $ | 7,357 | $ | 1,759 | $ | 1,877 | $ | 2,001 | $ | 1,720 | |||||||||
Gross profit | $ | 2,456 | $ | 573 | $ | 614 | $ | 700 | $ | 569 | |||||||||
Income from continuing operations | $ | 491 | $ | 98 | $ | 134 | $ | 150 | $ | 109 | |||||||||
Net income | $ | 491 | $ | 98 | $ | 134 | $ | 150 | $ | 109 | |||||||||
Earnings per common share: | |||||||||||||||||||
Basic: | |||||||||||||||||||
Income from continuing operations | $ | 1.49 | $ | 0.30 | $ | 0.41 | $ | 0.45 | $ | 0.33 | |||||||||
Net income | $ | 1.49 | $ | 0.30 | $ | 0.41 | $ | 0.45 | $ | 0.33 | |||||||||
Diluted: | |||||||||||||||||||
Income from continuing operations | $ | 1.47 | $ | 0.30 | $ | 0.40 | $ | 0.45 | $ | 0.32 | |||||||||
Net income | $ | 1.47 | $ | 0.30 | $ | 0.40 | $ | 0.45 | $ | 0.32 | |||||||||
2015 | |||||||||||||||||||
Net sales | $ | 7,142 | $ | 1,715 | $ | 1,839 | $ | 1,929 | $ | 1,659 | |||||||||
Gross profit | $ | 2,253 | $ | 532 | $ | 589 | $ | 637 | $ | 495 | |||||||||
Income from continuing operations | $ | 357 | $ | 76 | $ | 111 | $ | 109 | $ | 61 | |||||||||
Net income | $ | 355 | $ | 75 | $ | 111 | $ | 105 | $ | 64 | |||||||||
Earnings per common share: | |||||||||||||||||||
Basic: | |||||||||||||||||||
Income from continuing operations | $ | 1.04 | $ | 0.23 | $ | 0.33 | $ | 0.32 | $ | 0.17 | |||||||||
Net income | $ | 1.03 | $ | 0.22 | $ | 0.33 | $ | 0.30 | $ | 0.18 | |||||||||
Diluted: | |||||||||||||||||||
Income from continuing operations | $ | 1.03 | $ | 0.22 | $ | 0.32 | $ | 0.31 | $ | 0.17 | |||||||||
Net income | $ | 1.02 | $ | 0.22 | $ | 0.32 | $ | 0.30 | $ | 0.18 |
|
(In Millions) | ||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||||
Additions | ||||||||||||||||||||||
Description | Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts | Deductions | Balance at End of Period | |||||||||||||||||
Allowances for doubtful accounts, deducted from accounts receivable in the balance sheet (d): | ||||||||||||||||||||||
2016 | $ | 11 | $ | 4 | $ | — | $ | (4 | ) | (a) | $ | 11 | ||||||||||
2015 | $ | 14 | $ | 4 | $ | — | $ | (7 | ) | (a) | $ | 11 | ||||||||||
2014 | $ | 22 | $ | 3 | $ | — | $ | (11 | ) | (a) | $ | 14 | ||||||||||
Valuation allowance on deferred tax assets: | ||||||||||||||||||||||
2016 | $ | 49 | $ | 11 | $ | (15 | ) | (b) | $ | — | $ | 45 | ||||||||||
2015 | $ | 66 | $ | 36 | $ | (53 | ) | (c) | $ | — | $ | 49 | ||||||||||
2014 | $ | 662 | $ | (539 | ) | $ | (57 | ) | (b) | $ | — | $ | 66 |
(a) | Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years. |
(b) | Write off $13 million and $55 million of deferred tax assets on certain state and local net operating loss carryforwards against the valuation allowance, during 2016 and 2014, respectively, as it was determined that there was only a remote likelihood that such carryforwards could be utilized; and $2 million adjustment to the valuation allowance was recorded primarily in other comprehensive income (loss) in both 2016 and 2014. |
(c) | Valuation allowance on deferred tax assets allocated to TopBuild due to its spin off into a separate stand-alone company on June 30, 2015. |
(d) | Amounts exclude discontinued operations. |
|
|
Year Ended December 31 | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net sales (1) | $ | — | $ | 762 | $ | 1,515 | |||||
Cost of sales (1) | — | 603 | 1,188 | ||||||||
Gross profit (1) | — | 159 | 327 | ||||||||
Selling, general and administrative expenses (1) | — | 148 | 259 | ||||||||
Income from discontinued operations | $ | — | $ | 11 | $ | 68 | |||||
Other discontinued operations results: | |||||||||||
Loss on disposal of discontinued operations, net (2) | — | (1 | ) | (6 | ) | ||||||
Income before income tax | — | 10 | 62 | ||||||||
Income tax expense (3) | — | (12 | ) | (27 | ) | ||||||
(Loss) income from discontinued operations, net | $ | — | $ | (2 | ) | $ | 35 |
(1) | Net sales, cost of sales, gross profit, and selling, general and administrative expenses reflect the results of TopBuild. |
(2) | Included in loss on disposal of discontinued operations, net in 2014 are additional costs and charges related to the 2013 sale of Tvilum, our Danish ready-to-assemble cabinet business. |
(3) | The unusual relationship between income tax expense and income before income tax for 2015 resulted primarily from certain non-deductible transaction costs related to the spin off of TopBuild. |
Year Ended December 31 | |||||||||||
2016 | 2015 | 2014 | |||||||||
Depreciation and amortization | $ | — | $ | 6 | $ | 26 | |||||
Capital expenditures | $ | — | $ | 7 | $ | 13 |
|
(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Finished goods | $ | 366 | $ | 358 | |||
Raw material | 254 | 238 | |||||
Work in process | 92 | 91 | |||||
Total | $ | 712 | $ | 687 |
|
At December 31 | |||||||
2016 | 2015 | ||||||
Auction rate securities | $ | — | $ | 22 | |||
Total recurring investments | — | 22 | |||||
Equity method investments | 13 | 13 | |||||
Private equity funds | 5 | 10 | |||||
Other investments | — | 3 | |||||
Total | $ | 18 | $ | 48 |
2016 | 2015 | 2014 | |||||||||
Realized gains from auction rate securities | $ | 3 | $ | — | $ | — | |||||
Equity investment income (loss), net | 2 | 2 | (2 | ) | |||||||
Realized gains from private equity funds | 5 | 6 | 4 | ||||||||
Loss from other investments | (3 | ) | — | — | |||||||
Income from financial investments, net | $ | 7 | $ | 8 | $ | 2 |
|
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Foreign currency contracts: | |||||||||||
Exchange contracts | $ | — | $ | 4 | $ | 5 | |||||
Forward contracts | — | (3 | ) | — | |||||||
Metals contracts | 5 | (17 | ) | (3 | ) | ||||||
Interest rate swaps | (2 | ) | (2 | ) | (2 | ) | |||||
Total | $ | 3 | $ | (18 | ) | $ | — |
At December 31, 2016 | |||||||
Notional Amount | Balance Sheet | ||||||
Foreign currency contracts | |||||||
Forward contracts | $ | 21 | |||||
Accrued liabilities | $ | (2 | ) | ||||
Metals contracts | 1 | ||||||
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 | ) |
|
(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Land and improvements | $ | 111 | $ | 115 | |||
Buildings | 712 | 672 | |||||
Machinery and equipment | 1,795 | 1,787 | |||||
2,618 | 2,574 | ||||||
Less: Accumulated depreciation | (1,558 | ) | (1,547 | ) | |||
Total | $ | 1,060 | $ | 1,027 |
2017 | $ | 44 | |
2018 | 35 | ||
2019 | 25 | ||
2020 | 19 | ||
2021 | 16 | ||
2022 and beyond | 50 |
|
Gross Goodwill At December 31, 2016 | Accumulated Impairment Losses | Net Goodwill At December 31, 2016 | |||||||||
Plumbing Products | $ | 519 | $ | (340 | ) | $ | 179 | ||||
Decorative Architectural Products | 294 | (75 | ) | 219 | |||||||
Cabinetry Products | 240 | (59 | ) | 181 | |||||||
Windows and Other Specialty Products | 987 | (734 | ) | 253 | |||||||
Total | $ | 2,040 | $ | (1,208 | ) | $ | 832 |
Gross Goodwill At December 31, 2015 | Accumulated Impairment Losses | Net Goodwill At December 31, 2015 | Additions (A) | Other (B) | Net Goodwill At December 31, 2016 | ||||||||||||||||||
Plumbing Products | $ | 525 | $ | (340 | ) | $ | 185 | $ | — | $ | (6 | ) | $ | 179 | |||||||||
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 | $ | — | $ | (7 | ) | $ | 832 |
Gross Goodwill At December 31, 2014 | Accumulated Impairment Losses | Net Goodwill At December 31, 2014 | Additions (A) | Other (B) | Net Goodwill At December 31, 2015 | ||||||||||||||||||
Plumbing Products | $ | 531 | $ | (340 | ) | $ | 191 | $ | 8 | $ | (14 | ) | $ | 185 | |||||||||
Decorative Architectural Products | 294 | (75 | ) | 219 | — | — | 219 | ||||||||||||||||
Cabinetry Products | 240 | (59 | ) | 181 | — | — | 181 | ||||||||||||||||
Windows and Other Specialty Products | 983 | (734 | ) | 249 | 6 | (1 | ) | 254 | |||||||||||||||
Total | $ | 2,048 | $ | (1,208 | ) | $ | 840 | $ | 14 | $ | (15 | ) | $ | 839 |
(A) | Additions consist of acquisitions. |
(B) | Other principally includes the effect of foreign currency translation. |
|
(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Financial investments (Note E) | $ | 18 | $ | 48 | |||
In-store displays, net | 42 | 56 | |||||
Deferred tax assets (Note S) | 68 | 184 | |||||
Other | 29 | 22 | |||||
Total | $ | 157 | $ | 310 |
|
(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Salaries, wages and commissions | $ | 191 | $ | 171 | |||
Advertising and sales promotion | 146 | 132 | |||||
Interest | 51 | 62 | |||||
Warranty (Note U) | 56 | 50 | |||||
Employee retirement plans | 52 | 48 | |||||
Insurance reserves | 41 | 44 | |||||
Property, payroll and other taxes | 19 | 25 | |||||
Dividends payable | 32 | 32 | |||||
Other | 70 | 86 | |||||
Total | $ | 658 | $ | 650 |
|
(In Millions) At December 31 | |||||||
2016 | 2015 | ||||||
Notes and debentures: | |||||||
6.125%, due October 3, 2016 | $ | — | $ | 1,000 | |||
5.850%, due March 15, 2017 | — | 300 | |||||
6.625%, due April 15, 2018 | 114 | 114 | |||||
7.125%, due March 15, 2020 | 500 | 500 | |||||
3.500%, due April 1, 2021 | 399 | — | |||||
5.950%, due March 15, 2022 | 400 | 400 | |||||
4.450%, due April 1, 2025 | 500 | 500 | |||||
4.375%, due April 1, 2026 | 498 | — | |||||
7.750%, due August 1, 2029 | 296 | 296 | |||||
6.500%, due August 15, 2032 | 300 | 300 | |||||
Other | 9 | 13 | |||||
Prepaid debt issuance costs | (19 | ) | (16 | ) | |||
2,997 | 3,407 | ||||||
Less: Current portion | 2 | 1,004 | |||||
Total long-term debt | $ | 2,995 | $ | 2,403 |
|
2016 | 2015 | 2014 | |||||||||
Long-term stock awards | $ | 23 | $ | 23 | $ | 33 | |||||
Stock options | 2 | 5 | 4 | ||||||||
Phantom stock awards and stock appreciation rights | 4 | 11 | 6 | ||||||||
Total | $ | 29 | $ | 39 | $ | 43 | |||||
Income tax benefit (37 percent tax rate) | $ | 11 | $ | 14 | $ | 16 |
2016 | 2015 | 2014 | |||||||||
Unvested stock award shares at January 1 | 5 | 6 | 8 | ||||||||
Weighted average grant date fair value | $ | 17 | $ | 18 | $ | 17 | |||||
Stock award shares granted | 1 | 1 | 1 | ||||||||
Weighted average grant date fair value | $ | 26 | $ | 26 | $ | 22 | |||||
Stock award shares vested | 2 | 2 | 2 | ||||||||
Weighted average grant date fair value | $ | 16 | $ | 17 | $ | 17 | |||||
Stock award shares forfeited | — | — | 1 | ||||||||
Weighted average grant date fair value | $ | 20 | $ | 18 | $ | 19 | |||||
Forfeitures upon spin off (A) | — | 1 | — | ||||||||
Weighted average grant date fair value | $ | — | $ | 20 | $ | — | |||||
Modification upon spin off (B) | — | 1 | — | ||||||||
Unvested stock award shares at December 31 | 4 | 5 | 6 | ||||||||
Weighted average grant date fair value | $ | 20 | $ | 17 | $ | 18 |
(A) | In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. |
(B) | 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 stock awards was made pursuant to existing anti-dilution provisions in our 2014 Plan and 2005 Long Term Incentive Plan. |
2016 | 2015 | 2014 | |||||||||
Option shares outstanding, January 1 | 12 | 18 | 24 | ||||||||
Weighted average exercise price | $ | 17 | $ | 21 | $ | 22 | |||||
Option shares granted | — | — | — | ||||||||
Weighted average exercise price | $ | 26 | $ | 26 | $ | 22 | |||||
Option shares exercised | 5 | 5 | 2 | ||||||||
Aggregate intrinsic value on date of exercise (A) | $ | 64 | million | $ | 50 | million | $ | 22 | million | ||
Weighted average exercise price | $ | 21 | $ | 17 | $ | 16 | |||||
Option shares forfeited | — | 3 | 4 | ||||||||
Weighted average exercise price | $ | — | $ | 29 | $ | 28 | |||||
Forfeitures upon spin off (B) | — | — | — | ||||||||
Weighted average exercise price | $ | — | $ | 19 | $ | — | |||||
Modifications upon spin off (C) | — | 2 | — | ||||||||
Option shares outstanding, December 31 | 7 | 12 | 18 | ||||||||
Weighted average exercise price | $ | 15 | $ | 17 | $ | 21 | |||||
Weighted average remaining option term (in years) | 4 | 3 | 4 | ||||||||
Option shares vested and expected to vest, December 31 | 7 | 12 | 18 | ||||||||
Weighted average exercise price | $ | 15 | $ | 17 | $ | 21 | |||||
Aggregate intrinsic value (A) | $ | 118 | million | $ | 133 | million | $ | 110 | million | ||
Weighted average remaining option term (in years) | 4 | 3 | 4 | ||||||||
Option shares exercisable (vested), December 31 | 6 | 10 | 15 | ||||||||
Weighted average exercise price | $ | 13 | $ | 18 | $ | 22 | |||||
Aggregate intrinsic value (A) | $ | 102 | million | $ | 113 | million | $ | 84 | million | ||
Weighted average remaining option term (in years) | 3 | 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. |
(B) | In connection with the spin off of TopBuild, TopBuild employees forfeited their outstanding Masco equity awards. |
(C) | 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. |
2016 | 2015 | 2014 | |||||||||
Weighted average grant date fair value | $ | 6.43 | $ | 9.67 | $ | 9.53 | |||||
Risk-free interest rate | 1.41 | % | 1.75 | % | 1.91 | % | |||||
Dividend yield | 1.49 | % | 1.32 | % | 1.34 | % | |||||
Volatility factor | 29.00 | % | 42.00 | % | 49.00 | % | |||||
Expected option life | 6 years | 6 years | 6 years |
Option Shares Outstanding | Option Shares Exercisable | ||||||||||
Range of Prices | Number of Shares | Weighted Average Remaining Option Term | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||
$ | 7 - 18 | 5 | 3 Years | $12 | 5 | $12 | |||||
$ | 20 - 23 | 1 | 8 Years | $22 | — | $21 | |||||
$ | 26 - 27 | 1 | 5 Years | $26 | 1 | $27 | |||||
$ | 7 - 27 | 7 | 4 Years | $15 | 6 | $13 |
Phantom Stock Awards | Stock Appreciation Rights | ||||||||||||||
At December 31, | At December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Accrued compensation cost liability | $ | 10 | $ | 13 | $ | 8 | $ | 10 | |||||||
Unrecognized compensation cost | $ | 4 | $ | 4 | $ | — | $ | — | |||||||
Equivalent common shares | — | 1 | 1 | 1 |
|
2016 | 2015 | 2014 | |||||||||
Defined-contribution plans | $ | 58 | $ | 52 | $ | 43 | |||||
Defined-benefit pension plans | 34 | 32 | 25 | ||||||||
$ | 92 | $ | 84 | $ | 68 |
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Changes in projected benefit obligation: | |||||||||||||||
Projected benefit obligation at January 1 | $ | 1,059 | $ | 174 | $ | 1,145 | $ | 190 | |||||||
Service cost | 3 | — | 3 | — | |||||||||||
Interest cost | 41 | 7 | 41 | 7 | |||||||||||
Actuarial (gain) loss, net | 50 | 1 | (61 | ) | (11 | ) | |||||||||
Foreign currency exchange | (29 | ) | — | (23 | ) | — | |||||||||
Benefit payments | (69 | ) | (12 | ) | (46 | ) | (12 | ) | |||||||
Projected benefit obligation at December 31 | $ | 1,055 | $ | 170 | $ | 1,059 | $ | 174 | |||||||
Changes in fair value of plan assets: | |||||||||||||||
Fair value of plan assets at January 1 | $ | 658 | $ | — | $ | 691 | $ | — | |||||||
Actual return on plan assets | 58 | — | (12 | ) | — | ||||||||||
Foreign currency exchange | (20 | ) | — | (7 | ) | — | |||||||||
Company contributions | 100 | 12 | 38 | 12 | |||||||||||
Expenses, other | (10 | ) | — | (6 | ) | — | |||||||||
Benefit payments | (69 | ) | (12 | ) | (46 | ) | (12 | ) | |||||||
Fair value of plan assets at December 31 | $ | 717 | $ | — | $ | 658 | $ | — | |||||||
Funded status at December 31: | $ | (338 | ) | $ | (170 | ) | $ | (401 | ) | $ | (174 | ) |
At December 31, 2016 | At December 31, 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Other assets | $ | 2 | $ | — | $ | 1 | $ | — | |||||||
Accrued liabilities | (1 | ) | (12 | ) | (3 | ) | (12 | ) | |||||||
Other liabilities | (339 | ) | (158 | ) | (399 | ) | (162 | ) | |||||||
Total net liability | $ | (338 | ) | $ | (170 | ) | $ | (401 | ) | $ | (174 | ) |
At December 31, 2016 | At December 31, 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Net loss | $ | 519 | $ | 54 | $ | 501 | $ | 56 | |||||||
Net transition obligation | 1 | — | 1 | — | |||||||||||
Net prior service cost | 3 | — | 2 | — | |||||||||||
Total | $ | 523 | $ | 54 | $ | 504 | $ | 56 |
At December 31 | |||||||||||||||
2016 | 2015 | ||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||
Projected benefit obligation | $ | 1,044 | $ | 170 | $ | 1,045 | $ | 174 | |||||||
Accumulated benefit obligation | $ | 1,044 | $ | 170 | $ | 1,045 | $ | 174 | |||||||
Fair value of plan assets | $ | 704 | $ | — | $ | 643 | $ | — |
2016 | 2015 | 2014 | |||||||||||||||||||||
Qualified | Non-Qualified | Qualified | Non-Qualified | Qualified | Non-Qualified | ||||||||||||||||||
Service cost | $ | 3 | $ | — | $ | 3 | $ | — | $ | 3 | $ | — | |||||||||||
Interest cost | 49 | 7 | 47 | 7 | 47 | 7 | |||||||||||||||||
Expected return on plan assets | (44 | ) | — | (46 | ) | — | (45 | ) | — | ||||||||||||||
Recognized net loss | 17 | 2 | 18 | 3 | 11 | 2 | |||||||||||||||||
Net periodic pension cost | $ | 25 | $ | 9 | $ | 22 | $ | 10 | $ | 16 | $ | 9 |
2016 | 2015 | ||||
Equity securities | 49 | % | 49 | % | |
Debt securities | 32 | % | 32 | % | |
Other | 19 | % | 19 | % | |
Total | 100 | % | 100 | % |
At December 31, 2016 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Measured at NAV | Total | |||||||||||||||
Plan Assets | |||||||||||||||||||
Common and Preferred Stocks: | |||||||||||||||||||
United States | $ | 142 | $ | — | $ | — | $ | 118 | $ | 260 | |||||||||
International | 74 | — | — | 16 | 90 | ||||||||||||||
Private Equity and Hedge Funds: | |||||||||||||||||||
United States | — | — | 37 | — | 37 | ||||||||||||||
International | — | — | 24 | 32 | 56 | ||||||||||||||
Corporate Debt Securities: | |||||||||||||||||||
United States | 27 | 28 | — | 2 | 57 | ||||||||||||||
International | — | 26 | — | 17 | 43 | ||||||||||||||
Government and Other Debt Securities: | |||||||||||||||||||
United States | 46 | 4 | — | — | 50 | ||||||||||||||
International | 27 | 53 | — | — | 80 | ||||||||||||||
Common Collective Trust Fund – United States | — | 4 | — | — | 4 | ||||||||||||||
Short-Term and Other Investments: | |||||||||||||||||||
United States | 2 | — | — | — | 2 | ||||||||||||||
International | 5 | 15 | 18 | — | 38 | ||||||||||||||
Total Plan Assets | $ | 323 | $ | 130 | $ | 79 | $ | 185 | $ | 717 |
At December 31, 2015 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Measured at NAV | Total | |||||||||||||||
Plan Assets | |||||||||||||||||||
Common and Preferred Stocks: | |||||||||||||||||||
United States | $ | 127 | $ | 33 | $ | — | $ | 93 | $ | 253 | |||||||||
International | 55 | 7 | — | 7 | 69 | ||||||||||||||
Private Equity and Hedge Funds: | |||||||||||||||||||
United States | — | — | 49 | 3 | 52 | ||||||||||||||
International | — | — | 20 | 4 | 24 | ||||||||||||||
Corporate Debt Securities: | |||||||||||||||||||
United States | 18 | 26 | — | — | 44 | ||||||||||||||
International | — | 32 | — | 16 | 48 | ||||||||||||||
Government and Other Debt Securities: | |||||||||||||||||||
United States | 64 | 3 | — | — | 67 | ||||||||||||||
International | 23 | 30 | — | — | 53 | ||||||||||||||
Common Collective Trust Fund – United States | — | 4 | — | — | 4 | ||||||||||||||
Short-Term and Other Investments: | |||||||||||||||||||
United States | 2 | — | — | — | 2 | ||||||||||||||
International | 2 | 21 | 19 | — | 42 | ||||||||||||||
Total Plan Assets | $ | 291 | $ | 156 | $ | 88 | $ | 123 | $ | 658 |
2016 | 2015 | ||||||
Fair Value, January 1 | $ | 88 | $ | 97 | |||
Purchases | 6 | 4 | |||||
Sales | (19 | ) | (11 | ) | |||
Transfers, net | — | — | |||||
Unrealized gains (losses) | 4 | (2 | ) | ||||
Fair Value, December 31 | $ | 79 | $ | 88 |
2016 | 2015 | 2014 | ||||||
Discount rate for obligations | 3.50 | % | 4.00 | % | 3.80 | % | ||
Expected return on plan assets | 7.25 | % | 7.25 | % | 7.25 | % | ||
Rate of compensation increase | — | — | — | |||||
Discount rate for net periodic pension cost | 4.00 | % | 3.80 | % | 4.40 | % |
Qualified Plans | Non-Qualified Plans | ||||||
2017 | $ | 49 | $ | 12 | |||
2018 | $ | 50 | $ | 12 | |||
2019 | $ | 50 | $ | 12 | |||
2020 | $ | 52 | $ | 12 | |||
2021 | $ | 52 | $ | 12 | |||
2022 - 2026 | $ | 272 | $ | 58 |
|
At December 31 | |||||||
2016 | 2015 | ||||||
Cumulative translation adjustments, net | $ | 177 | $ | 245 | |||
Unrealized loss on available-for-sale securities, net | — | (12 | ) | ||||
Unrealized loss on interest rate swaps, net | (15 | ) | (16 | ) | |||
Unrecognized net loss and prior service cost, net | (397 | ) | (382 | ) | |||
Accumulated other comprehensive loss | $ | (235 | ) | $ | (165 | ) |
|
Accumulated Other Comprehensive Income (Loss) | 2016 | 2015 | 2014 | Statement of Operations Line Item | ||||||||||
Amortization of defined benefit pension and other postretirement benefits: | ||||||||||||||
Actuarial losses, net | $ | 19 | $ | 21 | $ | 13 | Selling, general and administrative expenses | |||||||
Tax (benefit) | (7 | ) | (8 | ) | (5 | ) | ||||||||
Net of tax | $ | 12 | $ | 13 | $ | 8 | ||||||||
Interest rate swaps | $ | 2 | $ | 2 | $ | 2 | Interest expense | |||||||
Tax (benefit) | (1 | ) | — | (1 | ) | |||||||||
Net of tax | $ | 1 | $ | 2 | $ | 1 | ||||||||
Available-for-sale securities | $ | (3 | ) | $ | — | $ | — | Other, net | ||||||
Tax expense | 15 | — | — | |||||||||||
Net of tax | $ | 12 | $ | — | $ | — |
|
Net Sales (1)(2)(3)(4)(5) | Operating Profit (Loss) (5)(6) | Assets at December 31 (8) | |||||||||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||
Our operations by segment were: (9) | |||||||||||||||||||||||||||||||||||
Plumbing Products | $ | 3,526 | $ | 3,341 | $ | 3,308 | $ | 642 | $ | 512 | $ | 512 | $ | 2,009 | $ | 1,972 | $ | 1,989 | |||||||||||||||||
Decorative Architectural Products | 2,092 | 2,020 | 1,998 | 430 | 403 | 360 | 894 | 874 | 857 | ||||||||||||||||||||||||||
Cabinetry Products | 970 | 1,025 | 999 | 93 | 51 | (62 | ) | 537 | 567 | 608 | |||||||||||||||||||||||||
Windows and Other Specialty Products | 769 | 756 | 701 | (3 | ) | 57 | 47 | 743 | 748 | 702 | |||||||||||||||||||||||||
Total | $ | 7,357 | $ | 7,142 | $ | 7,006 | $ | 1,162 | $ | 1,023 | $ | 857 | $ | 4,183 | $ | 4,161 | $ | 4,156 | |||||||||||||||||
Our operations by geographic area were: | |||||||||||||||||||||||||||||||||||
North America | $ | 5,834 | $ | 5,645 | $ | 5,377 | $ | 961 | $ | 841 | $ | 643 | $ | 3,001 | $ | 2,925 | $ | 2,861 | |||||||||||||||||
International, principally Europe | 1,523 | 1,497 | 1,629 | 201 | 182 | 214 | 1,182 | 1,236 | 1,295 | ||||||||||||||||||||||||||
Total, as above | $ | 7,357 | $ | 7,142 | $ | 7,006 | 1,162 | 1,023 | 857 | 4,183 | 4,161 | 4,156 | |||||||||||||||||||||||
General corporate expense, net (6) | (109 | ) | (109 | ) | (145 | ) | |||||||||||||||||||||||||||||
Income from litigation settlements (7) | — | — | 9 | ||||||||||||||||||||||||||||||||
Operating profit, as reported | 1,053 | 914 | 721 | ||||||||||||||||||||||||||||||||
Other income (expense), net | (223 | ) | (225 | ) | (214 | ) | |||||||||||||||||||||||||||||
Income from continuing operations before income taxes | $ | 830 | $ | 689 | $ | 507 | |||||||||||||||||||||||||||||
Corporate assets (10) | 954 | 1,503 | 1,576 | ||||||||||||||||||||||||||||||||
Assets held for sale | — | — | 1,476 | ||||||||||||||||||||||||||||||||
Total assets | $ | 5,137 | $ | 5,664 | $ | 7,208 |
Property Additions (5) | Depreciation and Amortization (5) | ||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Our operations by segment were: (9) | |||||||||||||||||||||||
Plumbing Products | $ | 110 | $ | 87 | $ | 65 | $ | 57 | $ | 56 | $ | 63 | |||||||||||
Decorative Architectural Products | 22 | 16 | 12 | 16 | 16 | 16 | |||||||||||||||||
Cabinetry Products | 8 | 6 | 9 | 21 | 24 | 33 | |||||||||||||||||
Windows and Other Specialty Products | 30 | 41 | 28 | 21 | 18 | 18 | |||||||||||||||||
170 | 150 | 114 | 115 | 114 | 130 | ||||||||||||||||||
Unallocated amounts, principally related to corporate assets | 10 | 1 | 1 | 19 | 13 | 11 | |||||||||||||||||
Total | $ | 180 | $ | 151 | $ | 115 | $ | 134 | $ | 127 | $ | 141 |
(1) | Included in net sales were export sales from the U.S. of $226 million, $217 million and $228 million in 2016, 2015 and 2014, respectively. |
(2) | Excluded from net sales were intra-company sales between segments of less than one percent in 2016, 2015 and 2014. |
(3) | Included in net sales were sales to one customer of $2,480 million, $2,378 million and $2,310 million in 2016, 2015 and 2014, respectively. Such net sales were included in each of our segments. |
(4) | Net sales from our operations in the U.S. were $5,605 million, $5,407 million and $5,112 million in 2016, 2015 and 2014, respectively. |
(5) | Net sales, operating profit (loss), property additions and depreciation and amortization expense for 2015 and 2014 excluded the results of businesses reported as discontinued operations. |
(6) | General corporate expense, net included those expenses not specifically attributable to our segments. |
(7) | The income from litigation settlements in 2014 relates to a business in our Decorative Architectural Products segment. |
(8) | Long-lived assets of our operations in the U.S. and Europe were $1,508 million and $417 million, $1,487 million and $427 million, and $1,470 million and $428 million at December 31, 2016, 2015 and 2014, respectively. |
(9) | In 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. |
(10) | Corporate assets at December 31, 2014 has not been recasted for the impact of the adoption of Accounting Standards Update 2015-03, as amended by Accounting Standards Update 2015-15, which required the reclassification of certain debt issuance costs from an asset to a liability. Total debt issuance costs subject to reclassification would have been $15 million at December 31, 2014. |
|
2016 | 2015 | 2014 | |||||||||
Income from cash and cash investments and short-term bank deposits | $ | 4 | $ | 3 | $ | 3 | |||||
Income from financial investments, net (Note E) | 7 | 8 | 2 | ||||||||
Foreign currency transaction (losses) gains | (3 | ) | (14 | ) | 5 | ||||||
Other items, net | (2 | ) | 3 | 1 | |||||||
Total other, net | $ | 6 | $ | — | $ | 11 |
|
(In Millions) | |||||||||||
2016 | 2015 | 2014 | |||||||||
Income from continuing operations before income taxes: | |||||||||||
U.S. | $ | 614 | $ | 496 | $ | 270 | |||||
Foreign | 216 | 193 | 237 | ||||||||
$ | 830 | $ | 689 | $ | 507 | ||||||
Income tax expense (benefit) on income from continuing operations: | |||||||||||
Currently payable: | |||||||||||
U.S. Federal | $ | 73 | $ | 10 | $ | 3 | |||||
State and local | 24 | 27 | 1 | ||||||||
Foreign | 69 | 56 | 67 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 140 | 192 | (401 | ) | |||||||
State and local | 2 | 3 | (21 | ) | |||||||
Foreign | (12 | ) | 5 | (10 | ) | ||||||
$ | 296 | $ | 293 | $ | (361 | ) | |||||
Deferred tax assets at December 31: | |||||||||||
Receivables | $ | 10 | $ | 9 | |||||||
Inventories | 17 | 17 | |||||||||
Other assets, including stock-based compensation | 58 | 78 | |||||||||
Accrued liabilities | 53 | 77 | |||||||||
Long-term liabilities | 280 | 266 | |||||||||
Net operating loss carryforward | 51 | 39 | |||||||||
Tax credit carryforward | 9 | 55 | |||||||||
478 | 541 | ||||||||||
Valuation allowance | (45 | ) | (49 | ) | |||||||
433 | 492 | ||||||||||
Deferred tax liabilities at December 31: | |||||||||||
Property and equipment | 127 | 104 | |||||||||
Intangibles | 222 | 212 | |||||||||
Investment in foreign subsidiaries | 15 | 8 | |||||||||
Other | 21 | 1 | |||||||||
385 | 325 | ||||||||||
Net deferred tax asset at December 31 | $ | 48 | $ | 167 |
2016 | 2015 | 2014 | ||||||
U.S. Federal statutory tax rate – expense | 35 | % | 35 | % | 35 | % | ||
State and local taxes, net of U.S. Federal tax benefit | 2 | 3 | (2 | ) | ||||
Lower taxes on foreign earnings | (2 | ) | (1 | ) | (5 | ) | ||
U.S. and foreign taxes on distributed and undistributed foreign earnings | 1 | 3 | — | |||||
Domestic production deduction | (1 | ) | — | — | ||||
U.S. Federal valuation allowance | — | 3 | (98 | ) | ||||
Other, net | 1 | — | (1 | ) | ||||
Effective tax rate – expense (benefit) | 36 | % | 43 | % | (71 | )% |
Uncertain Tax Positions | Interest and Penalties | Total | |||||||||
Balance at January 1, 2015 | $ | 39 | $ | 9 | $ | 48 | |||||
Current year tax positions: | |||||||||||
Additions | 10 | — | 10 | ||||||||
Prior year tax positions: | |||||||||||
Additions | 1 | — | 1 | ||||||||
Reductions | (1 | ) | — | (1 | ) | ||||||
Lapse of applicable statute of limitations | (6 | ) | — | (6 | ) | ||||||
Interest and penalties recognized in income tax expense | — | 1 | 1 | ||||||||
Balance at December 31, 2015 | $ | 43 | $ | 10 | $ | 53 | |||||
Current year tax positions: | |||||||||||
Additions | 11 | — | 11 | ||||||||
Reductions | (1 | ) | — | (1 | ) | ||||||
Prior year tax positions: | |||||||||||
Additions | 1 | — | 1 | ||||||||
Reductions | (2 | ) | — | (2 | ) | ||||||
Lapse of applicable statute of limitations | (6 | ) | — | (6 | ) | ||||||
Interest and penalties recognized in income tax expense | — | (1 | ) | (1 | ) | ||||||
Balance at December 31, 2016 | $ | 46 | $ | 9 | $ | 55 |
|
2016 | 2015 | 2014 | |||||||||
Numerator (basic and diluted): | |||||||||||
Income from continuing operations | $ | 491 | $ | 357 | $ | 821 | |||||
Less: Allocation to unvested restricted stock awards | 6 | 5 | 16 | ||||||||
Income from continuing operations attributable to common shareholders | 485 | 352 | 805 | ||||||||
(Loss) income from discontinued operations, net | — | (2 | ) | 35 | |||||||
Less: Allocation to unvested restricted stock awards | — | — | (1 | ) | |||||||
(Loss) income from discontinued operations attributable to common shareholders | — | (2 | ) | 34 | |||||||
Net income available to common shareholders | $ | 485 | $ | 350 | $ | 839 | |||||
Denominator: | |||||||||||
Basic common shares (based upon weighted average) | 326 | 338 | 349 | ||||||||
Add: Stock option dilution | 4 | 3 | 3 | ||||||||
Diluted common shares | 330 | 341 | 352 |
|
2016 | 2015 | ||||||
Balance at January 1 | $ | 152 | $ | 135 | |||
Accruals for warranties issued during the year | 66 | 56 | |||||
Accruals related to pre-existing warranties | 33 | 15 | |||||
Settlements made (in cash or kind) during the year | (56 | ) | (50 | ) | |||
Other, net (including currency translation) | (3 | ) | (4 | ) | |||
Balance at December 31 | $ | 192 | $ | 152 |
|
Quarters Ended | |||||||||||||||||||
(In Millions, Except Per Common Share Data) | |||||||||||||||||||
Total Year | December 31 | September 30 | June 30 | March 31 | |||||||||||||||
2016 | |||||||||||||||||||
Net sales | $ | 7,357 | $ | 1,759 | $ | 1,877 | $ | 2,001 | $ | 1,720 | |||||||||
Gross profit | $ | 2,456 | $ | 573 | $ | 614 | $ | 700 | $ | 569 | |||||||||
Income from continuing operations | $ | 491 | $ | 98 | $ | 134 | $ | 150 | $ | 109 | |||||||||
Net income | $ | 491 | $ | 98 | $ | 134 | $ | 150 | $ | 109 | |||||||||
Earnings per common share: | |||||||||||||||||||
Basic: | |||||||||||||||||||
Income from continuing operations | $ | 1.49 | $ | 0.30 | $ | 0.41 | $ | 0.45 | $ | 0.33 | |||||||||
Net income | $ | 1.49 | $ | 0.30 | $ | 0.41 | $ | 0.45 | $ | 0.33 | |||||||||
Diluted: | |||||||||||||||||||
Income from continuing operations | $ | 1.47 | $ | 0.30 | $ | 0.40 | $ | 0.45 | $ | 0.32 | |||||||||
Net income | $ | 1.47 | $ | 0.30 | $ | 0.40 | $ | 0.45 | $ | 0.32 | |||||||||
2015 | |||||||||||||||||||
Net sales | $ | 7,142 | $ | 1,715 | $ | 1,839 | $ | 1,929 | $ | 1,659 | |||||||||
Gross profit | $ | 2,253 | $ | 532 | $ | 589 | $ | 637 | $ | 495 | |||||||||
Income from continuing operations | $ | 357 | $ | 76 | $ | 111 | $ | 109 | $ | 61 | |||||||||
Net income | $ | 355 | $ | 75 | $ | 111 | $ | 105 | $ | 64 | |||||||||
Earnings per common share: | |||||||||||||||||||
Basic: | |||||||||||||||||||
Income from continuing operations | $ | 1.04 | $ | 0.23 | $ | 0.33 | $ | 0.32 | $ | 0.17 | |||||||||
Net income | $ | 1.03 | $ | 0.22 | $ | 0.33 | $ | 0.30 | $ | 0.18 | |||||||||
Diluted: | |||||||||||||||||||
Income from continuing operations | $ | 1.03 | $ | 0.22 | $ | 0.32 | $ | 0.31 | $ | 0.17 | |||||||||
Net income | $ | 1.02 | $ | 0.22 | $ | 0.32 | $ | 0.30 | $ | 0.18 |
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