Cover
Cover | 9 Months Ended |
Sep. 30, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2023 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Entity File Number | 1-5794 |
Entity Registrant Name | Masco Corporation |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 38-1794485 |
Entity Address, Address Line One | 17450 College Parkway, |
Entity Address, City or Town | Livonia, |
Entity Address, State or Province | MI |
Entity Address, Postal Zip Code | 48152 |
City Area Code | 313 |
Local Phone Number | 274-7400 |
Title of 12(b) Security | Common Stock, $1.00 par value |
Trading Symbol | MAS |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 224,500,911 |
Entity Central Index Key | 0000062996 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash investments | $ 560 | $ 452 |
Receivables | 1,245 | 1,149 |
Inventories | 1,046 | 1,236 |
Prepaid expenses and other | 113 | 109 |
Total current assets | 2,964 | 2,946 |
Property and equipment, net | 1,077 | 975 |
Goodwill | 593 | 537 |
Other intangible assets, net | 395 | 350 |
Operating lease right-of-use assets | 270 | 266 |
Other assets | 72 | 113 |
Total assets | 5,371 | 5,187 |
Current liabilities: | ||
Accounts payable | 844 | 877 |
Notes payable | 66 | 205 |
Accrued liabilities | 752 | 807 |
Total current liabilities | 1,662 | 1,889 |
Long-term debt | 2,946 | 2,946 |
Noncurrent operating lease liabilities | 260 | 255 |
Other liabilities | 336 | 339 |
Total liabilities | 5,204 | 5,429 |
Commitments and contingencies (Note M) | ||
Redeemable noncontrolling interest | 19 | 20 |
Masco Corporation's shareholders' equity: | ||
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2023 – 224,400,000; 2022 – 225,300,000 | 224 | 225 |
Preferred shares authorized: 1,000,000; Issued and outstanding: 2023 and 2022 – None | 0 | 0 |
Paid-in capital | 4 | 16 |
Retained deficit | (507) | (947) |
Accumulated other comprehensive income | 223 | 226 |
Total Masco Corporation's shareholders' deficit | (56) | (480) |
Noncontrolling interest | 204 | 218 |
Total equity | 148 | (262) |
Total liabilities and equity | $ 5,371 | $ 5,187 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, shares authorized (in shares) | 1,400,000,000 | 1,400,000,000 |
Common shares, shares issued (in shares) | 224,400,000 | 225,300,000 |
Common shares, shares outstanding (in shares) | 224,400,000 | 225,300,000 |
Preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,979 | $ 2,204 | $ 6,085 | $ 6,757 |
Cost of sales | 1,235 | 1,509 | 3,903 | 4,589 |
Gross profit | 744 | 695 | 2,182 | 2,168 |
Selling, general and administrative expenses | 361 | 344 | 1,081 | 1,056 |
Operating profit | 383 | 351 | 1,101 | 1,112 |
Other income (expense), net: | ||||
Interest expense | (26) | (29) | (82) | (82) |
Other, net | (11) | (12) | (14) | 4 |
Other income (expense), net | (37) | (41) | (96) | (78) |
Income before income taxes | 346 | 310 | 1,005 | 1,034 |
Income tax expense | 86 | 77 | 246 | 255 |
Net income | 260 | 233 | 759 | 779 |
Less: Net income attributable to noncontrolling interest | 11 | 15 | 42 | 50 |
Net income attributable to Masco Corporation | $ 249 | $ 218 | $ 717 | $ 729 |
Basic: | ||||
Net income, basic (in dollars per share) | $ 1.11 | $ 0.97 | $ 3.19 | $ 3.14 |
Diluted: | ||||
Net income, diluted (in dollars per share) | $ 1.10 | $ 0.97 | $ 3.17 | $ 3.13 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 260 | $ 233 | $ 759 | $ 779 |
Less: Net income attributable to noncontrolling interest | 11 | 15 | 42 | 50 |
Net income attributable to Masco Corporation | 249 | 218 | 717 | 729 |
Other comprehensive loss, net of tax | ||||
Cumulative translation adjustment | (25) | (54) | (10) | (120) |
Pension and other post-retirement benefits | 1 | 1 | 1 | 3 |
Other comprehensive loss, net of tax | (24) | (53) | (9) | (117) |
Less: Other comprehensive loss attributable to noncontrolling interest | ||||
Less: Other comprehensive loss attributable to noncontrolling interest | (6) | (14) | (6) | (26) |
Other comprehensive loss attributable to Masco Corporation | (18) | (39) | (3) | (91) |
Total comprehensive income | 236 | 180 | 750 | 662 |
Total comprehensive income attributable to noncontrolling interest | 5 | 1 | 36 | 24 |
Total comprehensive income attributable to Masco Corporation | $ 231 | $ 179 | $ 714 | $ 638 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: | |||
Cash provided by operations | $ 954 | $ 954 | |
Increase in receivables | (120) | (207) | |
Decrease (increase) in inventories | 199 | (164) | |
Decrease in accounts payable and accrued liabilities, net | (105) | (63) | |
Net cash from operating activities | 928 | 520 | |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: | |||
Purchase of Company common stock | (126) | (914) | |
Cash dividends paid | (193) | (195) | |
Dividends paid to noncontrolling interest | (49) | (68) | |
Proceeds from short-term borrowings | 77 | 0 | |
Payment of short-term borrowings | (11) | 0 | |
Proceeds from term loan | 0 | 500 | |
Payment of term loan | (200) | (100) | |
Proceeds from the exercise of stock options | 37 | 1 | |
Employee withholding taxes paid on stock-based compensation | (29) | (17) | |
Decrease in debt, net | (4) | (9) | |
Net cash for financing activities | (498) | (802) | |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: | |||
Capital expenditures | (181) | (137) | |
Acquisition of business, net of cash acquired | (136) | 0 | |
Other, net | (4) | (7) | |
Net cash for investing activities | (321) | (144) | |
Effect of exchange rate changes on cash and cash investments | (1) | (36) | |
CASH AND CASH INVESTMENTS: | |||
Increase (decrease) for the period | 108 | (462) | |
At January 1 | 452 | 926 | $ 926 |
At September 30 | $ 560 | $ 464 | $ 452 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Shares ($1 par value) | Paid-In Capital | Retained (Deficit) Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Beginning balance at Dec. 31, 2021 | $ 56 | $ 241 | $ 0 | $ (652) | $ 232 | $ 235 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 242 | 233 | (6) | 15 | ||
Shares issued | 1 | 1 | ||||
Shares retired: | ||||||
Repurchased | (364) | (6) | (27) | (331) | ||
Surrendered (non-cash) | (17) | (17) | ||||
Cash dividends declared | (67) | (67) | ||||
Redeemable noncontrolling interest - redemption adjustment | 1 | 1 | ||||
Stock-based compensation | 27 | 27 | ||||
Ending balance at Mar. 31, 2022 | (121) | 236 | 0 | (833) | 226 | 250 |
Beginning balance at Dec. 31, 2021 | 56 | 241 | 0 | (652) | 232 | 235 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 662 | |||||
Shares retired: | ||||||
Redeemable noncontrolling interest - redemption adjustment | 2 | |||||
Ending balance at Sep. 30, 2022 | (436) | 225 | 15 | (998) | 141 | 181 |
Beginning balance at Mar. 31, 2022 | (121) | 236 | 0 | (833) | 226 | 250 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 240 | 278 | (46) | 8 | ||
Shares retired: | ||||||
Repurchased | (550) | (11) | (5) | (534) | ||
Cash dividends declared | (64) | (64) | ||||
Dividends declared to noncontrolling interest | (79) | (79) | ||||
Redeemable noncontrolling interest - redemption adjustment | (1) | (1) | ||||
Stock-based compensation | 12 | 12 | ||||
Ending balance at Jun. 30, 2022 | (563) | 225 | 7 | (1,154) | 180 | 179 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 180 | |||||
Total comprehensive income (loss) | 181 | 218 | (39) | 2 | ||
Shares retired: | ||||||
Cash dividends declared | (64) | (64) | ||||
Redeemable noncontrolling interest - redemption adjustment | 2 | 2 | ||||
Stock-based compensation | 8 | 8 | ||||
Ending balance at Sep. 30, 2022 | (436) | 225 | 15 | (998) | 141 | 181 |
Beginning balance at Dec. 31, 2022 | (262) | 225 | 16 | (947) | 226 | 218 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 243 | 205 | 17 | 21 | ||
Shares issued | 6 | 1 | 5 | |||
Shares retired: | ||||||
Repurchased | (56) | (1) | (32) | (23) | ||
Surrendered (non-cash) | (17) | (17) | ||||
Cash dividends declared | (65) | (65) | ||||
Stock-based compensation | 11 | 11 | ||||
Ending balance at Mar. 31, 2023 | (140) | 225 | 0 | (847) | 243 | 239 |
Beginning balance at Dec. 31, 2022 | (262) | 225 | 16 | (947) | 226 | 218 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 750 | |||||
Shares retired: | ||||||
Redeemable noncontrolling interest - redemption adjustment | 0 | |||||
Ending balance at Sep. 30, 2023 | 148 | 224 | 4 | (507) | 223 | 204 |
Beginning balance at Mar. 31, 2023 | (140) | 225 | 0 | (847) | 243 | 239 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 270 | 263 | (2) | 9 | ||
Shares issued | 11 | 1 | 10 | |||
Shares retired: | ||||||
Repurchased | (25) | (1) | (1) | (23) | ||
Cash dividends declared | (64) | (64) | ||||
Dividends declared to noncontrolling interest | (49) | (49) | ||||
Stock-based compensation | 4 | 4 | ||||
Ending balance at Jun. 30, 2023 | 7 | 225 | 13 | (671) | 241 | 199 |
Increase (Decrease) in Stockholders' Equity | ||||||
Total comprehensive income (loss) | 236 | 249 | (18) | 5 | ||
Shares issued | 9 | 9 | ||||
Shares retired: | ||||||
Repurchased | (45) | (1) | (23) | (21) | ||
Cash dividends declared | (64) | (64) | ||||
Redeemable noncontrolling interest - redemption adjustment | 0 | |||||
Stock-based compensation | 5 | 5 | ||||
Ending balance at Sep. 30, 2023 | $ 148 | $ 224 | $ 4 | $ (507) | $ 223 | $ 204 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Statement of Stockholders' Equity [Abstract] | |||
Common shares, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | A. ACCOUNTING POLICIES In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to fairly state our financial position at September 30, 2023, our results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022, cash flows for the nine months ended September 30, 2023 and 2022 and changes in shareholders' equity for the three and nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet at December 31, 2022 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted ("GAAP") in the United States of America. Recently Adopted Accounting Pronouncements. In September 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-04, "Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that an entity that uses a supplier finance program in connection with the purchase of goods or services disclose information about the program’s nature, activity during the period, changes from period to period, and potential magnitude. We adopted this standard for annual periods on a retrospective basis, including interim periods within those annual periods, beginning January 1, 2023, except for the amendment on rollforward information, which is effective prospectively for annual periods beginning January 1, 2024 and will be adopted at that time. The adoption of this guidance modified our disclosures, but did not have an impact on our financial position and results of operations. Recently Issued Accounting Pronouncements . In March 2023, the FASB issued ASU 2023-02, "Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” which permits an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received. ASU 2023-02 is effective for annual periods on either a modified retrospective or retrospective basis, including interim periods within those annual periods, beginning January 1, 2024. Early adoption is permitted. We plan to adopt this standard beginning January 1, 2024, and do not anticipate that the adoption of this new standard will have a material effect on our financial position or results of operations. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | B. ACQUISITIONS In the third quarter of 2023, we acquired all of the share capital of Sauna360 Group Oy (“Sauna360”) for approximately €124 million ($136 million), net of cash acquired. Sauna360 has a portfolio of products that includes traditional, infrared, and wood-burning saunas as well as steam showers. The business is included within the Plumbing Products segment. In connection with this acquisition, we recognized $22 million of indefinite-lived intangible assets, which is related to trademarks, and $45 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 16 years. We also recognized $60 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business. The purchase price allocation for this acquisition is based on analysis of information as of the acquisition date that was available through September 30, 2023, and will be updated through the measurement period, if necessary. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | C. REVENUE Our revenues are derived from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions: Three Months Ended September 30, 2023 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 814 $ 788 $ 1,602 International, principally Europe 377 — 377 Total $ 1,191 $ 788 $ 1,979 Nine Months Ended September 30, 2023 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,428 $ 2,447 $ 4,875 International, principally Europe 1,210 — 1,210 Total $ 3,638 $ 2,447 $ 6,085 Three Months Ended September 30, 2022 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 912 $ 880 $ 1,792 International, principally Europe 412 — 412 Total $ 1,324 $ 880 $ 2,204 Nine Months Ended September 30, 2022 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,730 $ 2,701 $ 5,431 International, principally Europe 1,326 — 1,326 Total $ 4,056 $ 2,701 $ 6,757 We recognized $8 million of revenue for both the three months ended September 30, 2023 and 2022, related to performance obligations settled in previous quarters of the same year. We recognized $6 million and $11 million of revenue for the three and nine months ended September 30, 2023, respectively, and $5 million and $18 million of revenue for the three and nine months ended September 30, 2022, respectively, related to performance obligations settled in previous years. Our contract asset balance was $2 million and $1 million at September 30, 2023 and December 31, 2022, respectively. Our contract liability balance was $15 million and $61 million at September 30, 2023 and December 31, 2022, respectively. C. REVENUE (Concluded) Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Nine Months Ended September 30, 2023 Twelve Months Ended December 31, 2022 Balance at January 1 $ 8 $ 6 Provision for expected credit losses during the period 4 5 Write-offs charged against the allowance (4) (4) Recoveries of amounts previously written off 1 1 Balance at end of period $ 9 $ 8 |
DEPRECIATION AND AMORTIZATION
DEPRECIATION AND AMORTIZATION | 9 Months Ended |
Sep. 30, 2023 | |
Depreciation, Depletion and Amortization [Abstract] | |
DEPRECIATION AND AMORTIZATION | D. DEPRECIATION AND AMORTIZATION Depreciation and amortization expense was $107 million and $105 million for the nine months ended September 30, 2023 and 2022, respectively. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | E. INVENTORIES The components of inventory were as follows, in millions: At September 30, 2023 At December 31, 2022 Finished goods $ 651 $ 715 Raw materials 300 408 Work in process 95 113 Total $ 1,046 $ 1,236 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | F. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at September 30, 2023, by segment, was as follows, in millions: Gross Goodwill At September 30, 2023 Accumulated Impairment Losses Net Goodwill At September 30, 2023 Plumbing Products $ 667 $ (301) $ 366 Decorative Architectural Products 366 (139) 227 Total $ 1,033 $ (440) $ 593 The changes in the carrying amount of goodwill for the nine months ended September 30, 2023, by segment, were as follows, in millions: Gross Goodwill At December 31, 2022 Accumulated Impairment Losses Net Goodwill At December 31, 2022 Acquisitions (A) Foreign Currency Translation Net Goodwill At September 30, 2023 Plumbing Products $ 611 $ (301) $ 310 $ 60 $ (4) $ 366 Decorative Architectural Products 366 (139) 227 — — 227 Total $ 977 $ (440) $ 537 $ 60 $ (4) $ 593 (A) In the third quarter of 2023, we acquired Sauna360. Refer to Note B for additional information. F. GOODWILL AND OTHER INTANGIBLE ASSETS (Concluded) The carrying value of our other indefinite-lived intangible assets were $123 million and $102 million at September 30, 2023 and December 31, 2022, respectively, and principally included registered trademarks. The carrying value of our definite-lived intangible assets wa s $272 million (net of accumulated amortization o f $110 million) at September 30, 2023 and $248 million (net of accumulated amortization of $94 million) at December 31, 2022, and principally included customer relationships. The increase in our indefinite-lived and definite-lived intangible assets is primarily a result of our acquisition of Sauna360. |
SUPPLIER FINANCE PROGRAM
SUPPLIER FINANCE PROGRAM | 9 Months Ended |
Sep. 30, 2023 | |
Supplier Finance Program [Abstract] | |
SUPPLIER FINANCE PROGRAM | G. SUPPLIER FINANCE PROGRAM We facilitate a voluntary supply chain finance program (the "program") to provide certain of our suppliers with the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. A third party administers the program; our responsibility is limited to making payment on the terms originally negotiated with our supplier, regardless of whether the supplier sells its receivable to a financial institution. We do not enter into agreements with any of the participating financial institutions in connection with the program. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the program. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | H. DEBT On April 26, 2022, we entered into a revolving credit agreement (the “2022 Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of April 26, 2027. Under the 2022 Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $500 million with the current lenders or new lenders. The 2022 Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries in U.S. dollars, European euros, British pounds sterling, Canadian dollars and certain other currencies for revolving credit loans, swingline loans and letters of credit. Borrowings under the revolving credit loans denominated in any agreed upon currency other than U.S. dollars are limited to the equivalent of $500 million. We can also borrow swingline loans up to $125 million and obtain letters of credit of up to $25 million. Outstanding letters of credit under the 2022 Credit Agreement reduce our borrowing capacity and we had no outstanding letters of credit under the 2022 Credit Agreement at September 30, 2023. The 2022 Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0. In order for us to borrow under the 2022 Credit Agreement, there must not be any default in our covenants in the 2022 Credit Agreement (i.e., in addition to the two financial covenants described above, principally limitations on subsidiary debt, negative pledge restrictions, and requirements relating to legal compliance, maintenance of our properties and insurance) and our representations and warranties in the 2022 Credit Agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, since December 31, 2021, no material ERISA or environmental non-compliance, and no material tax deficiency). We were in compliance with all covenants and no borrowings were outstanding at September 30, 2023. H. DEBT (Concluded) On April 26, 2022, we entered into a 364-day $500 million senior unsecured delayed draw term loan (the "term loan") due April 26, 2023 with a syndicate of lenders. The term loan and commitments thereunder were subject to prepayment or termination at our option and the loans bore interest at SOFR plus a spread adjustment and 0.70%. The covenants, including the financial covenants, were substantially the same as those in the 2022 Credit Agreement. We repaid $300 million during 2022 and the remaining $200 million upon the maturity of the term loan on April 26, 2023. On May 9, 2023, our Hansgrohe SE subsidiary entered into €70 million ($77 million) of short-term borrowings to support working capital needs. The loans contain no financial covenants and €60 million ($63 million) remained borrowed and outstanding at a weighted average interest rate of 4.807% at September 30, 2023. Fair Value of Debt. The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues, which are Level 1 inputs. The aggregate estimated market value of our short-term and long-term debt at September 30, 2023 was approximately $2.5 billion, compared with the aggregate carrying value of $3.0 billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2022 was approximately $2.7 billion, compared with the aggregate carrying value of $3.2 billion. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | I. SEGMENT INFORMATION Information by segment and geographic area was as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 2023 2022 2023 2022 Net Sales (A) Operating Profit Net Sales (A) Operating Profit Our operations by segment were: Plumbing Products $ 1,191 $ 1,324 $ 223 $ 220 $ 3,638 $ 4,056 $ 673 $ 686 Decorative Architectural Products 788 880 181 151 2,447 2,701 493 498 Total $ 1,979 $ 2,204 $ 404 $ 371 $ 6,085 $ 6,757 $ 1,166 $ 1,184 Our operations by geographic area were: North America $ 1,602 $ 1,792 $ 348 $ 305 $ 4,875 $ 5,431 $ 972 $ 961 International, principally Europe 377 412 56 66 1,210 1,326 194 223 Total, as above $ 1,979 $ 2,204 404 371 $ 6,085 $ 6,757 1,166 1,184 General corporate expense, net (21) (20) (65) (72) Operating profit 383 351 1,101 1,112 Other income (expense), net (37) (41) (96) (78) Income before income taxes $ 346 $ 310 $ 1,005 $ 1,034 (A) Inter-segment sales were not material. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 9 Months Ended |
Sep. 30, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | J. OTHER INCOME (EXPENSE), NET Other, net, which is included in other income (expense), net, was as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Foreign currency transaction losses $ (7) $ (4) $ (7) $ (6) Net periodic pension and post-retirement benefit expense (3) (2) (9) (7) Income from cash and cash investments 3 1 5 2 Equity investment loss, net (1) (6) (1) (6) Realized gains from private equity funds — — 1 — Contingent consideration (A) — — — 24 Loss on sale of businesses, net — — — (1) Other items, net (3) (1) (3) (2) Total other, net $ (11) $ (12) $ (14) $ 4 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | K. INCOME TAXES Our effective tax rate was 25 percent and 24 percent for the three and nine months ended September 30, 2023, respectively, and was 25 percent for both the three and nine months ended September 30, 2022. Our effective tax rate for the nine months ended September 30, 2023 and 2022 was favorably impacted by $14 million and $10 million of income tax benefits, respectively. For both periods, the income tax benefits primarily resulted from a reduction in the liability for uncertain tax positions resulting from the expiration of statutes of limitation and stock-based compensation. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | L. INCOME PER COMMON SHARE Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator (basic and diluted): Net income $ 249 $ 218 $ 717 $ 729 Less: Allocation to redeemable noncontrolling interest — (2) — (2) Less: Allocation to unvested restricted stock awards — — — 3 Net income attributable to common shareholders $ 249 $ 220 $ 717 $ 728 Denominator: Basic common shares (based upon weighted average) 225 226 225 232 Add: Stock option dilution 1 1 1 1 Diluted common shares 226 227 226 233 For the three and nine months ended September 30, 2023 and 2022, we allocated dividends and undistributed earnings to the unvested restricted stock awards. The following stock options, restricted stock units and performance restricted stock units were excluded from the computation of weighted-average diluted common shares outstanding due to their anti-dilutive effect, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Number of stock options 392 670 861 623 Number of restricted stock units 8 4 4 22 Number of performance restricted stock units 15 — 15 — Effective October 20, 2022, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2021. We repurchased and retired approximately 2.4 million shares of our common stock in the nine months ended September 30, 2023 for approximately $126 million. This included 0.2 million shares to offset the dilutive impact of restricted stock units granted in the nine months ended September 30, 2023. At September 30, 2023, we had approximately $1.9 billion remaining under the 2022 authorization. |
OTHER COMMITMENTS AND CONTINGEN
OTHER COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
OTHER COMMITMENTS AND CONTINGENCIES | M. OTHER COMMITMENTS AND CONTINGENCIES Litigation. We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: advertising, competition, contract, data privacy, employment, environmental, insurance coverage, intellectual property, personal injury, product compliance, product liability, securities and warranty. We believe we have adequate defenses in these matters. We are also subject to product safety regulations, product recalls and direct claims for product liabilities. We believe the likelihood that the outcome of these claims, litigation and product safety matters would have a material adverse effect on us is remote. However, there is no assurance that we will prevail in these matters, and we could, in the future, incur judgments or penalties, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations. Warranty. Changes in our warranty liability were as follows, in millions: Nine Months Ended September 30, 2023 Twelve Months Ended December 31, 2022 Balance at January 1 $ 80 $ 80 Accruals for warranties issued during the period 29 40 Accruals related to pre-existing warranties 3 (3) Settlements made (in cash or kind) during the period (30) (34) Other, net (including currency translation and acquisitions) 1 (3) Balance at end of period $ 83 $ 80 |
INSURANCE SETTLEMENT
INSURANCE SETTLEMENT | 9 Months Ended |
Sep. 30, 2023 | |
Unusual or Infrequent Items, or Both [Abstract] | |
INSURANCE SETTLEMENT | N. INSURANCE SETTLEMENT During the three months ended September 30, 2023, we received an insurance settlement payment in our Decorative Architectural Products segment related to lost sales resulting from a weather event that occurred in Texas in 2021 which impacted the operations of a resin supplier and interrupted our ability to manufacture certain paints and other coating products. The insurance settlement payment increased gross profit and operating profit by $40 million for the three and nine months ended September 30, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 249 | $ 218 | $ 717 | $ 729 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements. In September 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-04, "Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that an entity that uses a supplier finance program in connection with the purchase of goods or services disclose information about the program’s nature, activity during the period, changes from period to period, and potential magnitude. We adopted this standard for annual periods on a retrospective basis, including interim periods within those annual periods, beginning January 1, 2023, except for the amendment on rollforward information, which is effective prospectively for annual periods beginning January 1, 2024 and will be adopted at that time. The adoption of this guidance modified our disclosures, but did not have an impact on our financial position and results of operations. Recently Issued Accounting Pronouncements . In March 2023, the FASB issued ASU 2023-02, "Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” which permits an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received. ASU 2023-02 is effective for annual periods on either a modified retrospective or retrospective basis, including interim periods within those annual periods, beginning January 1, 2024. Early adoption is permitted. We plan to adopt this standard beginning January 1, 2024, and do not anticipate that the adoption of this new standard will have a material effect on our financial position or results of operations. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Our revenues are derived from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions: Three Months Ended September 30, 2023 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 814 $ 788 $ 1,602 International, principally Europe 377 — 377 Total $ 1,191 $ 788 $ 1,979 Nine Months Ended September 30, 2023 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,428 $ 2,447 $ 4,875 International, principally Europe 1,210 — 1,210 Total $ 3,638 $ 2,447 $ 6,085 Three Months Ended September 30, 2022 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 912 $ 880 $ 1,792 International, principally Europe 412 — 412 Total $ 1,324 $ 880 $ 2,204 Nine Months Ended September 30, 2022 Plumbing Products Decorative Architectural Products Total Primary geographic markets: North America $ 2,730 $ 2,701 $ 5,431 International, principally Europe 1,326 — 1,326 Total $ 4,056 $ 2,701 $ 6,757 |
Financing receivable, allowance for credit loss | Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Nine Months Ended September 30, 2023 Twelve Months Ended December 31, 2022 Balance at January 1 $ 8 $ 6 Provision for expected credit losses during the period 4 5 Write-offs charged against the allowance (4) (4) Recoveries of amounts previously written off 1 1 Balance at end of period $ 9 $ 8 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The components of inventory were as follows, in millions: At September 30, 2023 At December 31, 2022 Finished goods $ 651 $ 715 Raw materials 300 408 Work in process 95 113 Total $ 1,046 $ 1,236 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill | Goodwill at September 30, 2023, by segment, was as follows, in millions: Gross Goodwill At September 30, 2023 Accumulated Impairment Losses Net Goodwill At September 30, 2023 Plumbing Products $ 667 $ (301) $ 366 Decorative Architectural Products 366 (139) 227 Total $ 1,033 $ (440) $ 593 The changes in the carrying amount of goodwill for the nine months ended September 30, 2023, by segment, were as follows, in millions: Gross Goodwill At December 31, 2022 Accumulated Impairment Losses Net Goodwill At December 31, 2022 Acquisitions (A) Foreign Currency Translation Net Goodwill At September 30, 2023 Plumbing Products $ 611 $ (301) $ 310 $ 60 $ (4) $ 366 Decorative Architectural Products 366 (139) 227 — — 227 Total $ 977 $ (440) $ 537 $ 60 $ (4) $ 593 (A) In the third quarter of 2023, we acquired Sauna360. Refer to Note B for additional information. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of information by segment and geographic area | Information by segment and geographic area was as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 2023 2022 2023 2022 Net Sales (A) Operating Profit Net Sales (A) Operating Profit Our operations by segment were: Plumbing Products $ 1,191 $ 1,324 $ 223 $ 220 $ 3,638 $ 4,056 $ 673 $ 686 Decorative Architectural Products 788 880 181 151 2,447 2,701 493 498 Total $ 1,979 $ 2,204 $ 404 $ 371 $ 6,085 $ 6,757 $ 1,166 $ 1,184 Our operations by geographic area were: North America $ 1,602 $ 1,792 $ 348 $ 305 $ 4,875 $ 5,431 $ 972 $ 961 International, principally Europe 377 412 56 66 1,210 1,326 194 223 Total, as above $ 1,979 $ 2,204 404 371 $ 6,085 $ 6,757 1,166 1,184 General corporate expense, net (21) (20) (65) (72) Operating profit 383 351 1,101 1,112 Other income (expense), net (37) (41) (96) (78) Income before income taxes $ 346 $ 310 $ 1,005 $ 1,034 (A) Inter-segment sales were not material. |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Schedule of components of other, net, which is included in other income (expense), net | Other, net, which is included in other income (expense), net, was as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Foreign currency transaction losses $ (7) $ (4) $ (7) $ (6) Net periodic pension and post-retirement benefit expense (3) (2) (9) (7) Income from cash and cash investments 3 1 5 2 Equity investment loss, net (1) (6) (1) (6) Realized gains from private equity funds — — 1 — Contingent consideration (A) — — — 24 Loss on sale of businesses, net — — — (1) Other items, net (3) (1) (3) (2) Total other, net $ (11) $ (12) $ (14) $ 4 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share | Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator (basic and diluted): Net income $ 249 $ 218 $ 717 $ 729 Less: Allocation to redeemable noncontrolling interest — (2) — (2) Less: Allocation to unvested restricted stock awards — — — 3 Net income attributable to common shareholders $ 249 $ 220 $ 717 $ 728 Denominator: Basic common shares (based upon weighted average) 225 226 225 232 Add: Stock option dilution 1 1 1 1 Diluted common shares 226 227 226 233 |
Schedule of weighted average number of shares | The following stock options, restricted stock units and performance restricted stock units were excluded from the computation of weighted-average diluted common shares outstanding due to their anti-dilutive effect, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Number of stock options 392 670 861 623 Number of restricted stock units 8 4 4 22 Number of performance restricted stock units 15 — 15 — |
OTHER COMMITMENTS AND CONTING_2
OTHER COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the Company's warranty liability | Changes in our warranty liability were as follows, in millions: Nine Months Ended September 30, 2023 Twelve Months Ended December 31, 2022 Balance at January 1 $ 80 $ 80 Accruals for warranties issued during the period 29 40 Accruals related to pre-existing warranties 3 (3) Settlements made (in cash or kind) during the period (30) (34) Other, net (including currency translation and acquisitions) 1 (3) Balance at end of period $ 83 $ 80 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2023 EUR (€) | Dec. 31, 2022 USD ($) | |
Acquisitions | |||
Goodwill | $ 593 | $ 537 | |
Sauna360 | |||
Acquisitions | |||
Consideration transferred | 136 | € 124 | |
Indefinite-lived intangible assets acquired | 22 | ||
Definite lived intangible assets | $ 45 | ||
Weighted average amortization period | 16 years | ||
Goodwill | $ 60 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,979 | $ 2,204 | $ 6,085 | $ 6,757 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,602 | 1,792 | 4,875 | 5,431 |
International, principally Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 377 | 412 | 1,210 | 1,326 |
Plumbing Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,191 | 1,324 | 3,638 | 4,056 |
Plumbing Products | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 814 | 912 | 2,428 | 2,730 |
Plumbing Products | International, principally Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 377 | 412 | 1,210 | 1,326 |
Decorative Architectural Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 788 | 880 | 2,447 | 2,701 |
Decorative Architectural Products | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 788 | 880 | 2,447 | 2,701 |
Decorative Architectural Products | International, principally Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |||||
Performance obligations satisfied in previous period of current year | $ 8 | $ 8 | |||
Performance obligation satisfied in previous period | 6 | $ 5 | $ 11 | $ 18 | |
Contract asset | 2 | 2 | $ 1 | ||
Contract liability | $ 15 | $ 15 | $ 61 |
REVENUE - Rollforward (Details)
REVENUE - Rollforward (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at January 1 | $ 8 | $ 6 |
Provision for expected credit losses during the period | 4 | 5 |
Write-offs charged against the allowance | (4) | (4) |
Recoveries of amounts previously written off | 1 | $ 1 |
Balance at end of period | $ 9 |
DEPRECIATION AND AMORTIZATION (
DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Depreciation, Depletion and Amortization [Abstract] | ||
Depreciation and amortization expense | $ 107 | $ 105 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 651 | $ 715 |
Raw materials | 300 | 408 |
Work in process | 95 | 113 |
Total | $ 1,046 | $ 1,236 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill, Net (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Line Items] | ||
Goodwill, Gross | $ 1,033 | $ 977 |
Accumulated Impairment Losses | (440) | (440) |
Net Goodwill | 593 | 537 |
Acquisitions | 60 | |
Foreign Currency Translation | (4) | |
Plumbing Products | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 667 | 611 |
Accumulated Impairment Losses | (301) | (301) |
Net Goodwill | 366 | 310 |
Acquisitions | 60 | |
Foreign Currency Translation | (4) | |
Decorative Architectural Products | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 366 | 366 |
Accumulated Impairment Losses | (139) | (139) |
Net Goodwill | 227 | $ 227 |
Acquisitions | 0 | |
Foreign Currency Translation | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Other indefinite-lived intangible assets | $ 123 | $ 102 |
Carrying value of definite-lived intangible assets | 272 | 248 |
Accumulated amortization | $ 110 | $ 94 |
SUPPLIER FINANCE PROGRAM (Detai
SUPPLIER FINANCE PROGRAM (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Supplier Finance Program [Abstract] | ||
Accounts payable | $ 60 | $ 50 |
Current obligation | $ 21 | $ 29 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) € in Millions | 9 Months Ended | 12 Months Ended | ||||||
Apr. 26, 2023 USD ($) | Apr. 26, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 EUR (€) | May 09, 2023 USD ($) | May 09, 2023 EUR (€) | |
Debt | ||||||||
Repayments of term loan | $ 200,000,000 | $ 100,000,000 | ||||||
Carrying Value | ||||||||
Debt | ||||||||
Debt, long-term and short-term | 3,000,000,000 | $ 3,200,000,000 | ||||||
Fair Value | ||||||||
Debt | ||||||||
Long-term and short-term debt | 2,500,000,000 | 2,700,000,000 | ||||||
2022 Credit Agreement | Revolver | ||||||||
Debt | ||||||||
Repayments of term loan | $ 200,000,000 | |||||||
2022 Credit Agreement | Line of Credit | Revolver | ||||||||
Debt | ||||||||
Borrowing capacity, maximum | $ 1,000,000,000 | |||||||
Increase in maximum borrowing capacity | $ 500,000,000 | |||||||
Amended Credit Agreement | ||||||||
Debt | ||||||||
Maximum net leverage ratio | 4 | |||||||
Minimum interest coverage ratio | 2.5 | |||||||
Amount borrowed | 0 | |||||||
Amended Credit Agreement | Revolver | ||||||||
Debt | ||||||||
Borrowing capacity, maximum | $ 500,000,000 | |||||||
Amended Credit Agreement | Swingline loans | ||||||||
Debt | ||||||||
Borrowing capacity, maximum | 125,000,000 | |||||||
Amended Credit Agreement | Letters of credit | ||||||||
Debt | ||||||||
Borrowing capacity, maximum | 25,000,000 | |||||||
Outstanding and unused Letters of Credit | $ 0 | |||||||
Unsecured Term Loan | ||||||||
Debt | ||||||||
Senior unsecured loan | $ 500,000,000 | |||||||
Repayments of term loan | $ 300,000,000 | |||||||
Unsecured Term Loan | SOFR Rate | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 0.70% | |||||||
Syndicate Of Lender Borrowing | Loans Payable | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 4.807% | 4.807% | ||||||
Short-term borrowing | $ 63,000,000 | € 60 | $ 77,000,000 | € 70 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net Sales | ||||
Net sales | $ 1,979 | $ 2,204 | $ 6,085 | $ 6,757 |
Operating profit | 383 | 351 | 1,101 | 1,112 |
Other income (expense), net | (37) | (41) | (96) | (78) |
Income before income taxes | 346 | 310 | 1,005 | 1,034 |
North America | ||||
Net Sales | ||||
Net sales | 1,602 | 1,792 | 4,875 | 5,431 |
International, principally Europe | ||||
Net Sales | ||||
Net sales | 377 | 412 | 1,210 | 1,326 |
Plumbing Products | ||||
Net Sales | ||||
Net sales | 1,191 | 1,324 | 3,638 | 4,056 |
Plumbing Products | North America | ||||
Net Sales | ||||
Net sales | 814 | 912 | 2,428 | 2,730 |
Plumbing Products | International, principally Europe | ||||
Net Sales | ||||
Net sales | 377 | 412 | 1,210 | 1,326 |
Decorative Architectural Products | ||||
Net Sales | ||||
Net sales | 788 | 880 | 2,447 | 2,701 |
Decorative Architectural Products | North America | ||||
Net Sales | ||||
Net sales | 788 | 880 | 2,447 | 2,701 |
Decorative Architectural Products | International, principally Europe | ||||
Net Sales | ||||
Net sales | 0 | 0 | 0 | 0 |
Operating Segments | ||||
Net Sales | ||||
Net sales | 1,979 | 2,204 | 6,085 | 6,757 |
Operating profit | 404 | 371 | 1,166 | 1,184 |
Operating Segments | North America | ||||
Net Sales | ||||
Net sales | 1,602 | 1,792 | 4,875 | 5,431 |
Operating profit | 348 | 305 | 972 | 961 |
Operating Segments | International, principally Europe | ||||
Net Sales | ||||
Net sales | 377 | 412 | 1,210 | 1,326 |
Operating profit | 56 | 66 | 194 | 223 |
Operating Segments | Plumbing Products | ||||
Net Sales | ||||
Net sales | 1,191 | 1,324 | 3,638 | 4,056 |
Operating profit | 223 | 220 | 673 | 686 |
Operating Segments | Decorative Architectural Products | ||||
Net Sales | ||||
Net sales | 788 | 880 | 2,447 | 2,701 |
Operating profit | 181 | 151 | 493 | 498 |
Corporate, Non-Segment | ||||
Net Sales | ||||
General corporate expense, net | $ (21) | $ (20) | $ (65) | $ (72) |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency transaction losses | $ (7) | $ (4) | $ (7) | $ (6) |
Net periodic pension and post-retirement benefit expense | (3) | (2) | (9) | (7) |
Income from cash and cash investments | 3 | 1 | 5 | 2 |
Equity investment loss, net | (1) | (6) | (1) | (6) |
Realized gains from private equity funds | 0 | 0 | 1 | 0 |
Contingent consideration | 0 | 0 | 0 | 24 |
Loss on sale of businesses, net | 0 | 0 | 0 | (1) |
Other items, net | (3) | (1) | (3) | (2) |
Total other, net | $ (11) | $ (12) | $ (14) | $ 4 |
OTHER INCOME (EXPENSE), NET - F
OTHER INCOME (EXPENSE), NET - Footnote Details (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Other Income and Expenses [Abstract] | |
Contingent consideration | $ 24 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 25% | 25% | 24% | 25% |
Income tax benefits | $ 14 | $ 10 |
INCOME PER COMMON SHARE - Recon
INCOME PER COMMON SHARE - Reconciliations of the Numerators and Denominators Used in the Computations of Basic and Diluted Earnings per Common Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator (basic and diluted): | ||||||
Net income | $ 249 | $ 218 | $ 717 | $ 729 | ||
Less: Allocation to redeemable noncontrolling interest | 0 | (2) | $ 1 | $ (1) | 0 | (2) |
Less: Allocation to unvested restricted stock awards | 0 | 0 | 0 | 3 | ||
Net income attributable to common shareholders | $ 249 | $ 220 | $ 717 | $ 728 | ||
Denominator: | ||||||
Basic common shares (based upon weighted average) (in shares) | 225 | 226 | 225 | 232 | ||
Add: Stock option dilution (in shares) | 1 | 1 | 1 | 1 | ||
Diluted common shares (in shares) | 226 | 227 | 226 | 233 |
INCOME PER COMMON SHARE - Antid
INCOME PER COMMON SHARE - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock Options | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 392 | 670 | 861 | 623 |
Restricted Stock Units | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 8 | 4 | 4 | 22 |
Performance Restricted Stock Units | ||||
Antidilutive securities excluded from computation of earnings per share | ||||
Antidilutive effect on computation of diluted earnings per common share (in shares) | 15 | 0 | 15 | 0 |
INCOME PER COMMON SHARE - Narra
INCOME PER COMMON SHARE - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 20, 2022 | |
Earnings Per Share [Abstract] | |||||
Stock repurchase program, authorized amount | $ 2,000 | ||||
Repurchase and retirement of common stock (in shares) | 2.4 | ||||
Stock repurchased during period | $ 126 | ||||
Payments for repurchase of common stock | $ 126 | $ 914 | |||
Repurchase and retirement of common stock to offset the dilutive impact of the grant of long-term stock awards (in shares) | 0.2 | ||||
Remaining authorized repurchase amount | $ 1,900 | $ 1,900 | |||
Cash dividends per common share paid (in dollars per share) | $ 0.285 | $ 0.280 | $ 0.855 | $ 0.840 |
OTHER COMMITMENTS AND CONTING_3
OTHER COMMITMENTS AND CONTINGENCIES - Warranty (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Changes in the company's warranty liability | ||
Balance at January 1 | $ 80 | $ 80 |
Accruals for warranties issued during the period | 29 | 40 |
Accruals related to pre-existing warranties | 3 | (3) |
Settlements made (in cash or kind) during the period | (30) | (34) |
Other, net (including currency translation and acquisitions) | 1 | (3) |
Balance at end of period | $ 83 | $ 80 |
INSURANCE SETTLEMENT (Details)
INSURANCE SETTLEMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Operating Income (Loss) | ||
Business Interruption Loss [Line Items] | ||
Profit increase from insurance settlement payment | $ 40 | $ 40 |
Gross Profit | ||
Business Interruption Loss [Line Items] | ||
Profit increase from insurance settlement payment | $ 40 | $ 40 |