00000629962020FYfalseP3Yus-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrentus-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent00000629962020-01-012020-12-31iso4217:USD00000629962020-06-30xbrli:shares00000629962021-01-3100000629962020-12-3100000629962019-12-31iso4217:USDxbrli:shares00000629962019-01-012019-12-3100000629962018-01-012018-12-3100000629962018-12-3100000629962017-12-310000062996us-gaap:CommonStockMember2017-12-310000062996us-gaap:AdditionalPaidInCapitalMember2017-12-310000062996us-gaap:RetainedEarningsMember2017-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2017-12-310000062996us-gaap:NoncontrollingInterestMember2017-12-310000062996us-gaap:RetainedEarningsMember2018-01-012018-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-01-012018-12-310000062996us-gaap:NoncontrollingInterestMember2018-01-012018-12-310000062996us-gaap:CommonStockMember2018-01-012018-12-310000062996us-gaap:AdditionalPaidInCapitalMember2018-01-012018-12-310000062996us-gaap:CommonStockMember2018-12-310000062996us-gaap:AdditionalPaidInCapitalMember2018-12-310000062996us-gaap:RetainedEarningsMember2018-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310000062996us-gaap:NoncontrollingInterestMember2018-12-310000062996us-gaap:RetainedEarningsMember2019-01-012019-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-12-310000062996us-gaap:NoncontrollingInterestMember2019-01-012019-12-310000062996us-gaap:CommonStockMember2019-01-012019-12-310000062996us-gaap:AdditionalPaidInCapitalMember2019-01-012019-12-310000062996us-gaap:CommonStockMember2019-12-310000062996us-gaap:AdditionalPaidInCapitalMember2019-12-310000062996us-gaap:RetainedEarningsMember2019-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000062996us-gaap:NoncontrollingInterestMember2019-12-310000062996mas:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201613Member2019-12-310000062996mas:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201613Memberus-gaap:RetainedEarningsMember2019-12-310000062996mas:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310000062996us-gaap:CommonStockMembermas:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310000062996us-gaap:AdditionalPaidInCapitalMembermas:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310000062996us-gaap:RetainedEarningsMembermas:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMembermas:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310000062996us-gaap:NoncontrollingInterestMembermas:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310000062996us-gaap:RetainedEarningsMember2020-01-012020-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310000062996us-gaap:NoncontrollingInterestMember2020-01-012020-12-310000062996us-gaap:CommonStockMember2020-01-012020-12-310000062996us-gaap:AdditionalPaidInCapitalMember2020-01-012020-12-310000062996us-gaap:CommonStockMember2020-12-310000062996us-gaap:AdditionalPaidInCapitalMember2020-12-310000062996us-gaap:RetainedEarningsMember2020-12-310000062996us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000062996us-gaap:NoncontrollingInterestMember2020-12-310000062996srt:MinimumMember2020-01-012020-12-310000062996srt:MaximumMember2020-01-012020-12-31xbrli:pure0000062996us-gaap:BuildingMembersrt:MinimumMember2020-01-012020-12-310000062996us-gaap:BuildingMembersrt:MaximumMember2020-01-012020-12-310000062996srt:MinimumMemberus-gaap:ComputerEquipmentMember2020-01-012020-12-310000062996srt:MaximumMemberus-gaap:ComputerEquipmentMember2020-01-012020-12-310000062996us-gaap:MachineryAndEquipmentMembersrt:MinimumMember2020-01-012020-12-310000062996us-gaap:MachineryAndEquipmentMembersrt:MaximumMember2020-01-012020-12-310000062996us-gaap:MeasurementInputDiscountRateMembersrt:MinimumMember2020-01-012020-12-310000062996srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2020-01-012020-12-310000062996us-gaap:AssetsTotalMemberus-gaap:MeasurementInputDiscountRateMembersrt:MinimumMember2020-01-012020-12-310000062996us-gaap:AssetsTotalMembersrt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2020-01-012020-12-310000062996mas:SmarTapAYLtdMember2020-01-012020-03-310000062996mas:SmarTapAYLtdMember2020-01-012020-12-310000062996mas:KrausUSAIncMember2020-10-012020-12-310000062996mas:KrausUSAIncMember2020-12-310000062996mas:PlumbingProductsMembermas:KrausUSAIncMember2020-10-012020-12-310000062996mas:WorkToolsInternationalIncAndElderJenksLLCMember2020-10-012020-12-310000062996mas:ESSMember2020-11-10iso4217:EUR0000062996mas:ESSMember2020-11-102020-11-100000062996mas:ESSMember2020-12-292020-12-290000062996mas:DecorativeArchitecturalProductsMembermas:TheLDKichlerCoMember2018-03-090000062996mas:DecorativeArchitecturalProductsMembermas:TheLDKichlerCoMember2018-12-310000062996mas:DecorativeArchitecturalProductsMembermas:TheLDKichlerCoMember2018-03-092018-03-090000062996mas:DecorativeArchitecturalProductsMemberus-gaap:CustomerRelationshipsMembermas:TheLDKichlerCoMember2018-03-092018-03-090000062996mas:DecorativeArchitecturalProductsMemberus-gaap:OtherIntangibleAssetsMembermas:TheLDKichlerCoMember2018-03-092018-03-090000062996mas:UKWindowGroupMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-09-062019-09-060000062996mas:UKWindowGroupMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-09-060000062996mas:UKWindowGroupMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-12-310000062996mas:MilgardManufacturingIncMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-11-062019-11-060000062996mas:MilgardManufacturingIncMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-12-310000062996mas:MilgardManufacturingIncMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-04-012020-06-300000062996mas:MilgardManufacturingIncMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-12-310000062996mas:MascoCabinetryMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-02-182020-02-180000062996mas:MascoCabinetryMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMemberus-gaap:CashMember2020-02-182020-02-180000062996mas:MascoCabinetryMembermas:ACProductsPreferredStockMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-02-182020-02-180000062996mas:MascoCabinetryMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-12-310000062996us-gaap:DiscontinuedOperationsDisposedOfBySaleMembermas:MilgardandUKWGMember2020-01-012020-12-310000062996us-gaap:DiscontinuedOperationsDisposedOfBySaleMembermas:MilgardandUKWGMember2018-01-012018-12-310000062996us-gaap:DiscontinuedOperationsDisposedOfBySaleMembermas:MilgardandUKWGMember2019-01-012019-12-310000062996mas:CabinetryProductsMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-12-310000062996mas:CabinetryProductsMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-12-310000062996mas:CabinetryProductsMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2018-01-012018-12-310000062996us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-12-310000062996us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-12-310000062996us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2018-01-012018-12-310000062996mas:UKWindowGroupMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-03-310000062996us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMembermas:MascoCabinetryMember2019-12-310000062996us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMembermas:CabinetryMilgardandUKWGMember2020-01-012020-12-310000062996us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMembermas:CabinetryMilgardandUKWGMember2019-01-012019-12-310000062996us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMembermas:CabinetryMilgardandUKWGMember2018-01-012018-12-310000062996mas:PlumbingProductsMembersrt:NorthAmericaMember2020-01-012020-12-310000062996mas:DecorativeArchitecturalProductsMembersrt:NorthAmericaMember2020-01-012020-12-310000062996srt:NorthAmericaMember2020-01-012020-12-310000062996mas:PlumbingProductsMembermas:ForeignLocationsMember2020-01-012020-12-310000062996mas:DecorativeArchitecturalProductsMembermas:ForeignLocationsMember2020-01-012020-12-310000062996mas:ForeignLocationsMember2020-01-012020-12-310000062996mas:PlumbingProductsMember2020-01-012020-12-310000062996mas:DecorativeArchitecturalProductsMember2020-01-012020-12-310000062996mas:PlumbingProductsMembersrt:NorthAmericaMember2019-01-012019-12-310000062996mas:DecorativeArchitecturalProductsMembersrt:NorthAmericaMember2019-01-012019-12-310000062996srt:NorthAmericaMember2019-01-012019-12-310000062996mas:PlumbingProductsMembermas:ForeignLocationsMember2019-01-012019-12-310000062996mas:DecorativeArchitecturalProductsMembermas:ForeignLocationsMember2019-01-012019-12-310000062996mas:ForeignLocationsMember2019-01-012019-12-310000062996mas:PlumbingProductsMember2019-01-012019-12-310000062996mas:DecorativeArchitecturalProductsMember2019-01-012019-12-310000062996mas:PlumbingProductsMembersrt:NorthAmericaMember2018-01-012018-12-310000062996mas:DecorativeArchitecturalProductsMembersrt:NorthAmericaMember2018-01-012018-12-310000062996srt:NorthAmericaMember2018-01-012018-12-310000062996mas:PlumbingProductsMembermas:ForeignLocationsMember2018-01-012018-12-310000062996mas:DecorativeArchitecturalProductsMembermas:ForeignLocationsMember2018-01-012018-12-310000062996mas:ForeignLocationsMember2018-01-012018-12-310000062996mas:PlumbingProductsMember2018-01-012018-12-310000062996mas:DecorativeArchitecturalProductsMember2018-01-012018-12-310000062996mas:KrausAndWorkToolsMember2020-10-012020-12-310000062996us-gaap:PropertyPlantAndEquipmentMember2020-12-310000062996us-gaap:PropertyPlantAndEquipmentMember2019-12-310000062996us-gaap:NotesPayableOtherPayablesMember2020-12-310000062996us-gaap:NotesPayableOtherPayablesMember2019-12-310000062996us-gaap:AccruedLiabilitiesMember2020-12-310000062996us-gaap:AccruedLiabilitiesMember2019-12-310000062996us-gaap:LongTermDebtMember2020-12-310000062996us-gaap:LongTermDebtMember2019-12-310000062996us-gaap:LandAndLandImprovementsMember2020-12-310000062996us-gaap:LandAndLandImprovementsMember2019-12-310000062996us-gaap:BuildingMember2020-12-310000062996us-gaap:BuildingMember2019-12-310000062996us-gaap:ComputerEquipmentMember2020-12-310000062996us-gaap:ComputerEquipmentMember2019-12-310000062996us-gaap:MachineryAndEquipmentMember2020-12-310000062996us-gaap:MachineryAndEquipmentMember2019-12-310000062996mas:PlumbingProductsMember2020-12-310000062996mas:DecorativeArchitecturalProductsMember2020-12-310000062996mas:PlumbingProductsMember2019-12-310000062996mas:DecorativeArchitecturalProductsMember2019-12-310000062996mas:PlumbingProductsMember2018-12-310000062996mas:DecorativeArchitecturalProductsMember2018-12-310000062996mas:DecorativeArchitecturalProductsMember2019-01-012019-03-310000062996srt:WeightedAverageMember2020-01-012020-12-310000062996srt:WeightedAverageMember2019-01-012019-12-310000062996mas:ACProductsHoldingIncMember2020-12-310000062996mas:ACProductsPreferredStockMember2020-01-012020-12-310000062996mas:ACProductsPreferredStockMember2020-02-180000062996us-gaap:OtherAssetsMembermas:ACProductsPreferredStockMember2020-12-310000062996us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-12-310000062996us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-310000062996us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310000062996us-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310000062996us-gaap:SeniorNotesMembermas:A3.5NotesandDebenturesDueApril12021Member2020-12-310000062996us-gaap:SeniorNotesMembermas:A3.5NotesandDebenturesDueApril12021Member2019-12-310000062996mas:A5.95NotesandDebenturesdue2022Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A5.95NotesandDebenturesdue2022Memberus-gaap:SeniorNotesMember2019-12-310000062996mas:A4.45NotesandDebenturesdueApril2025Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A4.45NotesandDebenturesdueApril2025Memberus-gaap:SeniorNotesMember2019-12-310000062996mas:A4.375NotesandDebenturesDueApril12026Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A4.375NotesandDebenturesDueApril12026Memberus-gaap:SeniorNotesMember2019-12-310000062996us-gaap:SeniorNotesMembermas:A3.5NotesandDebenturesDueNovember152027Member2020-12-310000062996us-gaap:SeniorNotesMembermas:A3.5NotesandDebenturesDueNovember152027Member2019-12-310000062996mas:A7.75NotesAndDebenturesdue2029Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A7.75NotesAndDebenturesdue2029Memberus-gaap:SeniorNotesMember2019-12-310000062996mas:A20NotesAndDebenturesDue2030Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A20NotesAndDebenturesDue2030Memberus-gaap:SeniorNotesMember2019-12-310000062996mas:A6.5NotesandDebenturesdue2032Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A6.5NotesandDebenturesdue2032Memberus-gaap:SeniorNotesMember2019-12-310000062996mas:A4.5NotesandDebenturesDueMay152047Memberus-gaap:SeniorNotesMember2020-12-310000062996mas:A4.5NotesandDebenturesDueMay152047Memberus-gaap:SeniorNotesMember2019-12-310000062996mas:A20NotesAndDebenturesDue2030Member2020-09-180000062996mas:A20NotesAndDebenturesDue2030Member2020-09-182020-09-180000062996mas:A4.5NotesandDebenturesDueMay152047Member2020-09-180000062996mas:A4.5NotesandDebenturesDueMay152047Member2020-12-310000062996mas:A4.5NotesandDebenturesDueMay152047Member2020-09-182020-09-180000062996mas:A4.5NotesandDebenturesDueMay152047Member2019-12-310000062996mas:A3.5NotesandDebenturesDueApril12021Member2020-09-292020-09-290000062996mas:A3.5NotesandDebenturesDueApril12021Member2020-09-290000062996us-gaap:SeniorNotesMembermas:A7.125NotesandDebenturesdueMarch152020Member2019-12-192019-12-190000062996us-gaap:SeniorNotesMembermas:A7.125NotesandDebenturesdueMarch152020Member2019-12-190000062996mas:A7.125NotesandDebenturesdueMarch152020Member2019-12-192019-12-190000062996mas:A6.625NotesandDebenturesDueApril152018Member2018-04-162018-04-160000062996mas:A6.625NotesandDebenturesDueApril152018Member2018-04-160000062996mas:Year2019CreditAgreementMember2019-03-130000062996mas:Year2013CreditAgreementMember2013-03-280000062996us-gaap:RevolvingCreditFacilityMembermas:Year2019CreditAgreementMember2019-03-130000062996mas:SwingLineLoansMembermas:Year2019CreditAgreementMember2019-03-130000062996mas:Year2019CreditAgreementMemberus-gaap:LetterOfCreditMember2019-03-130000062996mas:Year2019CreditAgreementMemberus-gaap:LetterOfCreditMember2020-12-310000062996mas:Year2019CreditAgreementMembermas:FederalFundsEffectiveRateMember2019-03-132019-03-130000062996mas:Year2019CreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMember2019-03-132019-03-130000062996mas:Year2019CreditAgreementMember2019-03-132019-03-130000062996mas:Year2019CreditAgreementMember2020-12-310000062996us-gaap:RestrictedStockMember2020-01-012020-12-310000062996us-gaap:RestrictedStockMember2019-01-012019-12-310000062996us-gaap:RestrictedStockMember2018-01-012018-12-310000062996us-gaap:EmployeeStockOptionMember2020-01-012020-12-310000062996us-gaap:EmployeeStockOptionMember2019-01-012019-12-310000062996us-gaap:EmployeeStockOptionMember2018-01-012018-12-310000062996us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-12-310000062996us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-12-310000062996us-gaap:RestrictedStockUnitsRSUMember2018-01-012018-12-310000062996mas:PerformanceRestrictedStockUnitsMember2020-01-012020-12-310000062996mas:PerformanceRestrictedStockUnitsMember2019-01-012019-12-310000062996mas:PerformanceRestrictedStockUnitsMember2018-01-012018-12-310000062996mas:PhantomStockAwardsAndStockAppreciationRightsSARSMember2020-01-012020-12-310000062996mas:PhantomStockAwardsAndStockAppreciationRightsSARSMember2019-01-012019-12-310000062996mas:PhantomStockAwardsAndStockAppreciationRightsSARSMember2018-01-012018-12-310000062996mas:LongTermStockIncentivePlanMember2020-12-310000062996us-gaap:RestrictedStockMember2019-12-310000062996us-gaap:RestrictedStockMember2018-12-310000062996us-gaap:RestrictedStockMember2017-12-310000062996us-gaap:RestrictedStockMember2020-12-310000062996us-gaap:EmployeeStockOptionMember2020-12-310000062996us-gaap:EmployeeStockOptionMember2019-12-310000062996us-gaap:EmployeeStockOptionMember2018-12-310000062996mas:RangeOneMember2020-01-012020-12-310000062996mas:RangeOneMember2020-12-310000062996mas:RangeTwoMember2020-01-012020-12-310000062996mas:RangeTwoMember2020-12-310000062996mas:RangeThreeMember2020-01-012020-12-310000062996mas:RangeThreeMember2020-12-310000062996us-gaap:RestrictedStockUnitsRSUMember2020-12-310000062996us-gaap:RestrictedStockUnitsRSUMembermas:LTIPProgramMember2020-01-012020-12-310000062996mas:LTIPProgramMembersrt:MinimumMember2020-01-012020-12-310000062996srt:MaximumMembermas:LTIPProgramMember2020-01-012020-12-310000062996mas:LTIPProgramMembermas:PerformanceRestrictedStockUnitsMember2020-01-012020-12-310000062996mas:LTIPProgramMembermas:PerformanceRestrictedStockUnitsMember2019-01-012019-12-310000062996mas:LTIPProgramMembermas:PerformanceRestrictedStockUnitsMember2018-01-012018-12-310000062996us-gaap:PhantomShareUnitsPSUsMember2020-01-012020-12-310000062996us-gaap:PhantomShareUnitsPSUsMember2019-01-012019-12-310000062996us-gaap:PhantomShareUnitsPSUsMember2018-01-012018-12-310000062996us-gaap:PhantomShareUnitsPSUsMember2020-12-310000062996us-gaap:PhantomShareUnitsPSUsMember2019-12-310000062996us-gaap:StockAppreciationRightsSARSMember2020-01-012020-12-310000062996us-gaap:StockAppreciationRightsSARSMember2019-01-012019-12-310000062996us-gaap:StockAppreciationRightsSARSMember2018-01-012018-12-310000062996us-gaap:StockAppreciationRightsSARSMember2020-12-310000062996us-gaap:StockAppreciationRightsSARSMember2019-12-310000062996us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-12-310000062996us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-12-310000062996us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2018-01-012018-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2020-01-012020-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2019-01-012019-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2018-01-012018-12-310000062996us-gaap:QualifiedPlanMember2019-12-310000062996us-gaap:NonqualifiedPlanMember2019-12-310000062996us-gaap:QualifiedPlanMember2018-12-310000062996us-gaap:NonqualifiedPlanMember2018-12-310000062996us-gaap:QualifiedPlanMember2020-01-012020-12-310000062996us-gaap:NonqualifiedPlanMember2020-01-012020-12-310000062996us-gaap:QualifiedPlanMember2019-01-012019-12-310000062996us-gaap:NonqualifiedPlanMember2019-01-012019-12-310000062996us-gaap:QualifiedPlanMember2020-12-310000062996us-gaap:NonqualifiedPlanMember2020-12-310000062996us-gaap:QualifiedPlanMember2018-01-012018-12-310000062996us-gaap:NonqualifiedPlanMember2018-01-012018-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:DefinedBenefitPlanEquitySecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:DefinedBenefitPlanEquitySecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:DefinedBenefitPlanDebtSecurityMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:DefinedBenefitPlanDebtSecurityMember2019-12-310000062996us-gaap:QualifiedPlanMembermas:OtherPlanAssetsMember2020-12-310000062996us-gaap:QualifiedPlanMembermas:OtherPlanAssetsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USmas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:FairValueInputsLevel2Membermas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USmas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:FairValueInputsLevel2Membermas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:CommonAndPreferredStockMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USus-gaap:CorporateDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USus-gaap:CorporateDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:CorporateDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:US2020-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMembercountry:USus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:US2020-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMembercountry:US2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USmas:CommonCollectiveTrustFundMember2020-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:CommonCollectiveTrustFundMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USmas:CommonCollectiveTrustFundMember2020-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:CommonCollectiveTrustFundMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:BuyinAnnuityMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:BuyinAnnuityMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:BuyinAnnuityMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:BuyinAnnuityMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:ShortTermAndOtherInvestmentsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:FairValueInputsLevel2Membermas:ShortTermAndOtherInvestmentsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:ShortTermAndOtherInvestmentsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:ShortTermAndOtherInvestmentsMember2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel2Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Member2020-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USmas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:FairValueInputsLevel2Membermas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USmas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:FairValueInputsLevel2Membermas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:CommonAndPreferredStockMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USmas:PrivateEquityAndHedgeFundsMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:PrivateEquityAndHedgeFundsMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USmas:PrivateEquityAndHedgeFundsMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:PrivateEquityAndHedgeFundsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:PrivateEquityAndHedgeFundsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USus-gaap:CorporateDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USus-gaap:CorporateDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:CorporateDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:CorporateDebtSecuritiesMember2019-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:US2019-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMembercountry:USus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:US2019-12-310000062996us-gaap:USTreasuryAndGovernmentMemberus-gaap:QualifiedPlanMembercountry:US2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:ForeignGovernmentDebtSecuritiesMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USmas:CommonCollectiveTrustFundMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:CommonCollectiveTrustFundMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USmas:CommonCollectiveTrustFundMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:CommonCollectiveTrustFundMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:BuyinAnnuityMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:BuyinAnnuityMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:BuyinAnnuityMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:BuyinAnnuityMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Membercountry:USmas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USus-gaap:FairValueInputsLevel2Membermas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Membercountry:USmas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMembercountry:USmas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Memberus-gaap:ForeignPlanMembermas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMemberus-gaap:FairValueInputsLevel2Membermas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Memberus-gaap:ForeignPlanMembermas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:ForeignPlanMembermas:ShortTermAndOtherInvestmentsMember2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel1Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel2Member2019-12-310000062996us-gaap:QualifiedPlanMemberus-gaap:FairValueInputsLevel3Member2019-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2020-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2019-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2018-12-310000062996srt:MinimumMemberus-gaap:PensionPlansDefinedBenefitMember2020-12-310000062996srt:MaximumMemberus-gaap:PensionPlansDefinedBenefitMember2020-12-310000062996srt:MinimumMemberus-gaap:PensionPlansDefinedBenefitMember2019-12-310000062996srt:MaximumMemberus-gaap:PensionPlansDefinedBenefitMember2019-12-310000062996srt:MinimumMemberus-gaap:PensionPlansDefinedBenefitMember2018-12-310000062996srt:MaximumMemberus-gaap:PensionPlansDefinedBenefitMember2018-12-310000062996us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-12-310000062996us-gaap:PensionPlansDefinedBenefitMember2010-01-012020-12-310000062996us-gaap:DefinedBenefitPlanDebtSecurityMemberus-gaap:PensionPlansDefinedBenefitMember2020-12-310000062996mas:AlternativeInvestmentMemberus-gaap:PensionPlansDefinedBenefitMember2020-12-310000062996us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-12-310000062996us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-12-310000062996us-gaap:ForeignPlanMember2020-12-3100000629962019-09-300000062996us-gaap:SubsequentEventMember2021-02-100000062996us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetGainLossIncludingPortionAttributableToNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310000062996us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetGainLossIncludingPortionAttributableToNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-12-310000062996us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetGainLossIncludingPortionAttributableToNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2018-01-012018-12-310000062996us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310000062996us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-01-012019-12-310000062996us-gaap:InterestRateSwapMemberus-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2018-01-012018-12-310000062996us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310000062996mas:UKWindowGroupMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2019-09-012019-09-3000000629962018-01-012018-03-310000062996us-gaap:OperatingSegmentsMembermas:PlumbingProductsMember2020-01-012020-12-310000062996us-gaap:OperatingSegmentsMembermas:PlumbingProductsMember2019-01-012019-12-310000062996us-gaap:OperatingSegmentsMembermas:PlumbingProductsMember2018-01-012018-12-310000062996us-gaap:OperatingSegmentsMembermas:PlumbingProductsMember2020-12-310000062996us-gaap:OperatingSegmentsMembermas:PlumbingProductsMember2019-12-310000062996us-gaap:OperatingSegmentsMembermas:PlumbingProductsMember2018-12-310000062996us-gaap:OperatingSegmentsMembermas:DecorativeArchitecturalProductsMember2020-01-012020-12-310000062996us-gaap:OperatingSegmentsMembermas:DecorativeArchitecturalProductsMember2019-01-012019-12-310000062996us-gaap:OperatingSegmentsMembermas:DecorativeArchitecturalProductsMember2018-01-012018-12-310000062996us-gaap:OperatingSegmentsMembermas:DecorativeArchitecturalProductsMember2020-12-310000062996us-gaap:OperatingSegmentsMembermas:DecorativeArchitecturalProductsMember2019-12-310000062996us-gaap:OperatingSegmentsMembermas:DecorativeArchitecturalProductsMember2018-12-310000062996us-gaap:OperatingSegmentsMember2020-01-012020-12-310000062996us-gaap:OperatingSegmentsMember2019-01-012019-12-310000062996us-gaap:OperatingSegmentsMember2018-01-012018-12-310000062996us-gaap:OperatingSegmentsMember2020-12-310000062996us-gaap:OperatingSegmentsMember2019-12-310000062996us-gaap:OperatingSegmentsMember2018-12-310000062996us-gaap:OperatingSegmentsMembersrt:NorthAmericaMember2020-01-012020-12-310000062996us-gaap:OperatingSegmentsMembersrt:NorthAmericaMember2019-01-012019-12-310000062996us-gaap:OperatingSegmentsMembersrt:NorthAmericaMember2018-01-012018-12-310000062996us-gaap:OperatingSegmentsMembersrt:NorthAmericaMember2020-12-310000062996us-gaap:OperatingSegmentsMembersrt:NorthAmericaMember2019-12-310000062996us-gaap:OperatingSegmentsMembersrt:NorthAmericaMember2018-12-310000062996us-gaap:OperatingSegmentsMembermas:ForeignLocationsMember2020-01-012020-12-310000062996us-gaap:OperatingSegmentsMembermas:ForeignLocationsMember2019-01-012019-12-310000062996us-gaap:OperatingSegmentsMembermas:ForeignLocationsMember2018-01-012018-12-310000062996us-gaap:OperatingSegmentsMembermas:ForeignLocationsMember2020-12-310000062996us-gaap:OperatingSegmentsMembermas:ForeignLocationsMember2019-12-310000062996us-gaap:OperatingSegmentsMembermas:ForeignLocationsMember2018-12-310000062996us-gaap:CorporateNonSegmentMember2020-01-012020-12-310000062996us-gaap:CorporateNonSegmentMember2019-01-012019-12-310000062996us-gaap:CorporateNonSegmentMember2018-01-012018-12-310000062996us-gaap:CorporateNonSegmentMember2020-12-310000062996us-gaap:CorporateNonSegmentMember2019-12-310000062996us-gaap:CorporateNonSegmentMember2018-12-310000062996us-gaap:DiscontinuedOperationsHeldforsaleMember2020-01-012020-12-310000062996us-gaap:DiscontinuedOperationsHeldforsaleMember2019-01-012019-12-310000062996us-gaap:DiscontinuedOperationsHeldforsaleMember2018-01-012018-12-310000062996srt:MaximumMember2018-01-012018-12-310000062996srt:MaximumMember2019-01-012019-12-310000062996us-gaap:CustomerConcentrationRiskMembermas:OneCustomerMemberus-gaap:SalesRevenueNetMember2020-01-012020-12-310000062996us-gaap:CustomerConcentrationRiskMembermas:OneCustomerMemberus-gaap:SalesRevenueNetMember2019-01-012019-12-310000062996us-gaap:CustomerConcentrationRiskMembermas:OneCustomerMemberus-gaap:SalesRevenueNetMember2018-01-012018-12-310000062996country:USus-gaap:SalesRevenueNetMember2020-01-012020-12-310000062996country:USus-gaap:SalesRevenueNetMember2019-01-012019-12-310000062996country:USus-gaap:SalesRevenueNetMember2018-01-012018-12-310000062996country:US2020-12-310000062996srt:EuropeMember2020-12-310000062996country:US2019-12-310000062996srt:EuropeMember2019-12-310000062996country:US2018-12-310000062996srt:EuropeMember2018-12-310000062996us-gaap:PrivateEquityFundsMember2020-01-012020-12-310000062996us-gaap:PrivateEquityFundsMember2019-01-012019-12-310000062996us-gaap:PrivateEquityFundsMember2018-01-012018-12-310000062996us-gaap:OtherNoncurrentAssetsMember2020-12-310000062996us-gaap:OtherNoncurrentAssetsMember2019-12-310000062996us-gaap:OtherNoncurrentLiabilitiesMember2020-12-310000062996us-gaap:OtherNoncurrentLiabilitiesMember2019-12-310000062996us-gaap:StateAndLocalJurisdictionMember2020-01-012020-12-310000062996us-gaap:StateAndLocalJurisdictionMember2019-01-012019-12-310000062996us-gaap:StateAndLocalJurisdictionMember2018-01-012018-12-310000062996us-gaap:EmployeeStockOptionMember2020-01-012020-12-310000062996us-gaap:EmployeeStockOptionMember2019-01-012019-12-310000062996us-gaap:EmployeeStockOptionMember2018-01-012018-12-310000062996us-gaap:RestrictedStockUnitsRSUMember2018-01-012018-12-310000062996us-gaap:RestrictedStockMember2020-01-012020-12-310000062996us-gaap:RestrictedStockMember2019-01-012019-12-3100000629962020-10-012020-12-3100000629962020-07-012020-09-3000000629962020-04-012020-06-3000000629962020-01-012020-03-3100000629962019-10-012019-12-3100000629962019-07-012019-09-3000000629962019-04-012019-06-3000000629962019-01-012019-03-310000062996us-gaap:SubsequentEventMembermas:ESSMember2021-01-042021-01-040000062996us-gaap:SubsequentEventMembermas:ESSMember2021-01-040000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2019-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2020-01-012020-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2020-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2018-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2019-01-012019-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2017-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember2018-01-012018-12-310000062996mas:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMembermas:IncomeTaxBenefitMember2018-01-012018-12-310000062996us-gaap:ValuationAllowanceOfDeferredTaxAssetsMemberus-gaap:OtherComprehensiveIncomeMember2018-01-012018-12-31


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the fiscal year ended December 31, 2020
or
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period from ___________ to ___________

Commission file number: 1-5794
MASCO CORPORATION
(Exact name of Registrant as Specified in its Charter)
Delaware38-1794485
(State of Incorporation)(I.R.S. Employer Identification No.)
17450 College Parkway, Livonia,Michigan48152
(Address of Principal Executive Offices)(Zip Code)

Registrant's telephone number, including area code: (313) 274-7400
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Trading SymbolName of Each Exchange
On Which Registered
Common Stock, $1.00 par valueMASNew York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 Accelerated filer
Non-accelerated filer
 Smaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No þ
The aggregate market value of the Registrant's Common Stock held by non-affiliates of the Registrant on June 30, 2020 (based on the closing sale price of $50.21 of the Registrant's Common Stock, as reported by the New York Stock Exchange on such date) was approximately $13,053,334,100.
Number of shares outstanding of the Registrant's Common Stock at January 31, 2021:
257,142,348 shares of Common Stock, par value $1.00 per share

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement to be filed for its 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.




Masco Corporation
2020 Annual Report on Form 10-K

TABLE OF CONTENTS
Item   Page
  
  
  
  
 

1


PART I
Item 1.Business.
Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes BEHR® paint; DELTA® and HANSGROHE® faucets, bath and shower fixtures; KICHLER® decorative and outdoor lighting; LIBERTY® branded decorative and functional hardware; and HOT SPRING® spas. We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders.
We believe that our solid results of operations and financial position for 2020 resulted from strong consumer demand for our lower ticket, repair and remodel-oriented products and increased spending on repair and remodel activity, along with our continued focus on our three strategic pillars:
drive the full potential of our core businesses;
leverage opportunities across our enterprise; and
actively manage our portfolio.
In 2020, we completed the divestiture of our Masco Cabinetry business ("Cabinetry"), and completed the acquisitions of Kraus USA Inc. ("Kraus"), Work Tools International Inc. and Elder & Jenks, LLC (collectively "Work Tools"), and SmarTap A.Y Ltd. ("SmarTap"). We also entered into an agreement in November 2020 to purchase a majority stake in Easy Sanitary Solutions B.V. ("ESS"). This transaction closed on January 4, 2021. Additionally in 2020, we continued to return value to our shareholders by repurchasing approximately 18.8 million shares of our common stock and increasing our quarterly dividend by approximately 4 percent.
Our Business Segments
We report our financial results in two segments, our Plumbing Products segment and our Decorative Architectural Products segment, which are aggregated by product similarity. Our Decorative Architectural Products segment is impacted by seasonality and normally experiences stronger sales during the second and third calendar quarters, corresponding with the peak season for repair and remodel activity.
Plumbing Products
The businesses in our Plumbing Products segment sell a wide variety of products that are manufactured or sourced by us.
Our plumbing products include faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, sinks and toilets. We sell these products to home center and online retailers and to wholesalers and distributors that, in turn, sell them to plumbers, building contractors, remodelers, smaller retailers and consumers. The majority of our faucet, bathing and showering products are sold primarily in North America and Europe under the brand names DELTA®, BRIZO®, PEERLESS®, HANSGROHE®, AXOR®, KRAUS®, GINGER®, NEWPORT BRASS®, BRASSTECH® and WALTEC®. Our BRISTAN™ and HERITAGE™ products are sold primarily in the United Kingdom.
We manufacture acrylic tubs, bath and shower enclosure units, and shower bases and trays. Our DELTA, PEERLESS and MIROLIN® products are sold primarily to home center retailers in North America. Our MIROLIN products are also sold to wholesalers and distributors in Canada. Our HÜPPE® shower enclosures and shower trays are sold through wholesale channels primarily in Europe.
Our spas, exercise pools and fitness systems are manufactured and sold under our HOT SPRING®, CALDERA®, FREEFLOW SPAS®, FANTASY SPAS® and ENDLESS POOLS® brands, as well as under other trademarks. Our spa and exercise pools are sold worldwide to independent specialty retailers and distributors and to online mass merchant retailers. Certain exercise pools are also available on a consumer-direct basis in North America and Europe, while our fitness systems are sold through independent specialty retailers as well as on a consumer-direct basis in some areas.


2


Included in our Plumbing Products segment are brass, copper and composite plumbing system components and other non-decorative plumbing products that are sold to plumbing, heating and hardware wholesalers, home center and online retailers, hardware stores, building supply outlets and other mass merchandisers. These products are marketed primarily in North America under our BRASSCRAFT®, PLUMB SHOP®, COBRA®, COBRA PRO™ and MASTER PLUMBER® brands and are also sold under private label.
Within our Plumbing Products segment we develop connected water products that enhance the experience with water in homes and businesses. These systems include touchless activation, voice activation, controlled volume dispensing and provide for monitoring and controlling the temperature and flow of water and are compatible with a wide range of faucets, showerheads and other showering components.
We also supply high-quality, custom thermoplastic solutions, extruded plastic profiles and specialized fabrications, as well as PEX tubing, to manufacturers, distributors and wholesalers for use in diverse applications that include faucets and plumbing supplies, appliances, oil and gas equipment, building products and automotive components.
We believe that our plumbing products are among the leaders in sales in North America and Europe. Competitors of the majority of our products in this segment include Elkay Manufacturing Company, Fortune Brands Home & Security, Inc.'s Moen, Rohl and Riobel brands, Kohler Co., Lixil Group Corporation’s American Standard and Grohe brands and Spectrum Brands Holdings, Inc.’s Pfister faucets. Competitors of our spas and exercise pools and systems include Artesian Spas, Jacuzzi and Master Spas brands. Foreign manufacturers competing with us are located primarily in Europe and China. We face significant competition from private label products and digitally native brands. Many of the faucet and showering products with which our products compete are manufactured by foreign manufacturers that contribute to price competition. The businesses in our Plumbing Products segment manufacture products primarily in North America and Europe as well as in Asia and source products from Asia and other regions. Competition for our plumbing products is based largely on brand reputation, product features and innovation, product quality, customer service, breadth of product offering and price.
Many of our plumbing products contain brass, the major components of which are copper and zinc. We have multiple sources, both domestic and foreign, for the raw materials used in this segment. We have encountered price volatility for brass, brass components and any components containing copper and zinc. To help reduce the impact of this volatility, from time to time we may enter into long-term agreements with certain significant suppliers or, occasionally, use derivative instruments. In addition, some of the products in this segment that we import have been and may in the future be subject to duties and tariffs.
Decorative Architectural Products
Our Decorative Architectural Products segment primarily includes architectural coatings, including paints, primers, specialty coatings, stains and waterproofing products, as well as paint applicators and accessories. These products are sold in North America, South America and China under the brand names BEHR®, KILZ®, WHIZZ®, Elder & Jenks® and other trademarks to “do‑it‑yourself” and professional customers through home center retailers and other retailers. Net sales of architectural coatings comprised approximately 33 percent, 31 percent and 30 percent of our consolidated net sales from our continuing operations in 2020, 2019, and 2018, respectively. Our BEHR products are sold through The Home Depot, our largest customer overall, as well as this segment’s largest customer. Our Behr business grants Behr brand exclusivity in the retail sales channel in North America to The Home Depot. The granting of exclusivity affects our ability to sell those products and brands to other customers and the loss of this segment’s sales to The Home Depot would have a material adverse effect on this segment’s business and on our consolidated business as a whole.
Our competitors in this segment include large national and international brands such as Benjamin Moore & Co., PPG Industries, Inc.'s Glidden, Olympic, Pittsburgh Paints and PPG brands, The Sherwin‑Williams Company's Minwax, Sherwin-Williams, Thompson’s Water Seal, Valspar and Purdy brands, RPM International, Inc.'s Rust-Oleum and Zinsser brands and the Wooster Brush Company, as well as many regional and other national brands. We believe that brand reputation is an important factor in consumer selection, and that competition in this industry is also based largely on product features and innovation, product quality, customer service, breadth of product offering and price.

3


Titanium dioxide and acrylic resins are principal raw materials in the manufacture of architectural coatings. The price for titanium dioxide can fluctuate as a result of global supply and demand dynamics and production capacity limitations, which can have a material impact on our costs and results of operations in this segment. The price of acrylic resins fluctuates based on the price of its components, which can also have a material impact on our costs and results of operations in this segment. In addition, the prices of crude oil, natural gas and certain petroleum by-products can impact our costs and results of operations in this segment. We have agreements with certain significant suppliers for this segment that are intended to help assure continued supply.
Our Decorative Architectural Products segment includes branded cabinet and door hardware, functional hardware, wall plates, hook and hook rail products, closet organization systems and picture hanging accessories, which are manufactured for us and sold to home center retailers, mass retailers, online retailers, other specialty retailers, original equipment manufacturers and wholesalers. These products are sold under the LIBERTY®, BRAINERD®, FRANKLIN BRASS® and other trademarks. Our key competitors in North America include Amerock Hardware, Richelieu Hardware Ltd., Top Knobs and private label brands. Decorative bath hardware, shower accessories, mirrors and shower doors are sold under the brand names DELTA® and FRANKLIN BRASS® and other trademarks to home center retailers, mass retailers, online retailers, other specialty retailers and wholesalers. Competitors for these products include Fortune Brands Home & Security, Inc.'s Moen brand, Gatco Fine Bathware, Kohler Co. and private label brands.
This segment also includes decorative indoor and outdoor lighting fixtures, ceiling fans, landscape lighting and LED lighting systems. These products are sold to home center retailers, online retailers, electrical distributors, landscape distributors and lighting showrooms under the brand names KICHLER® and ÉLAN® and under other trademarks. Competitors of these products include Acuity, FX Luminaire, Generation Brands, Hinkley Lighting, Inc., Hubbell Incorporated's Progress Lighting brand, Hunter Fan Company and private label brands.
Certain products in our Decorative Architectural Products segment contain propylene, methyl methacrylate (MMA), titanium dioxide and zinc. We have multiple sources, both domestic and foreign, for the raw materials used in this segment. We have encountered price volatility for propylene and MMA and, to a lesser extent in this segment, zinc. To help reduce the impact of this volatility, from time to time we may enter into long-term agreements with certain significant suppliers or, occasionally, use derivative instruments. We import certain materials and products for this segment that have been and may in the future be subject to duties and tariffs.
Additional Information
Intellectual Property
We hold numerous U.S. and foreign patents, patent applications, licenses, trademarks, trade names, trade secrets and proprietary manufacturing processes. We view our trademarks and other intellectual property rights as important, but do not believe that there is any reasonable likelihood of a loss of such rights that would have a material adverse effect on our present business as a whole.
Laws and Regulations Affecting Our Business
We are subject to federal, state, local and foreign government laws and regulations. For a more detailed description of the various laws and regulations that impact our business, see Item 1A. Risk Factors.
We monitor applicable laws and regulations and incur ongoing expense relating to compliance, however we do not expect that compliance with federal, state, local and foreign regulations, will result in material capital expenditures or have a material adverse effect on our results of operations and financial position.
Human Capital Management
We believe that the performance of our Company is impacted by our human capital management, and as a result we consistently work to attract, select, develop, engage and retain strong, diverse talent. We are focused on three key strategic talent priorities: leadership, diversity, equity and inclusion, and our future workforce. Our Chief Human Resources Officer is responsible for developing and executing our human capital strategy and provides regular updates to our Board of Directors’ Organization and Compensation Committee on our progress toward the achievement of our strategic initiatives. We believe that all of our human capital initiatives work together to assure we have an environment where our employees are engaged, feel a sense of belonging, and can reach their full potential.


4


Leadership
We support and grow our employees by providing continuous development practices and tools that build and strengthen leadership capabilities. Our leadership framework is designed to serve as the foundation for how we select, develop and measure the performance of our leaders. We have also placed a specific focus on building a coaching culture by enabling frequent and candid feedback discussions about performance and development between employees and their managers, across peers, and within teams.
Diversity, Equity and Inclusion ("DE&I")
We believe a workplace that encourages different voices, perspectives and backgrounds creates better teams, better solutions and more innovation. For the past several years, we have strived to create a culture of inclusion, reduce bias in our talent practices, and invest in and engage with our communities. We are focused on the following three key areas:
Our workplace: who we are and how it feels to work at Masco
Our communities: how we can help increase access, equity, and inclusion with our diverse community partners
Our marketplace: how we represent our consumers and use our buying power to support advancing economic equity
We are refining strategic objectives and expectations within each of these focus areas. We are also developing multiple internal channels to increase communication and opportunity for engagement among our employees. In 2020, we established a global, enterprise DE&I Council and several local councils and employee resource groups at our business units and our corporate headquarters to help implement action plans tailored to their specific needs and challenges.
Future Workforce
We are consistently working to identify the critical capabilities our employees and the organization need to help us achieve our businesses objectives. We leverage our Masco Operating System to ensure our businesses are focused on the right capabilities and are providing the right tools, training and structure to building these new and important skills.
Employee Health and Safety
The safety of our employees is integral to our company. In support of our safety efforts, we identify, assess and investigate incidents and injury data, and each year set a goal to improve key safety performance indicators. We train, promote, consult and communicate with our workforce in this process. In 2020, the Coronavirus Disease 2019 ("COVID-19") pandemic highlighted the importance of employee welfare. Our cross-functional Infectious Illness Response Team reacted quickly to keep our employees safe through the implementation of policies and safety measures that adhered to best practices from the World Health Organization and the Centers for Disease Control.
Our Workforce
At December 31, 2020, we employed approximately 18,000 people.
Available Information
Our website is www.masco.com. Our periodic reports and all amendments to those reports required to be filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website as soon as reasonably practicable after those reports are electronically filed with or furnished to the Securities and Exchange Commission ("SEC"). This Report is being posted on our website concurrently with its filing with the SEC. Material contained on our website is not incorporated by reference into this Report. Our reports filed with the SEC also may be found on the SEC’s website at www.sec.gov.
5


Item 1A.    Risk Factors.
There are a number of business risks and uncertainties that could affect our business. These risks and uncertainties could cause our actual results to differ from past performance or expected results. We consider the following risks and uncertainties to be most relevant to our specific business activities. Additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, also may adversely impact our business, results of operations and financial position.
Coronavirus Disease 2019 Risks
The ongoing COVID-19 pandemic is disrupting our business, and has and may continue to impact our results of operations and financial condition.
The spread of COVID-19 has created a global health crisis that has resulted in widespread disruption to economic activity, both in the U.S. and globally.
We operate facilities in the United States and around the world which are being adversely affected by this pandemic. The U.S. federal government and numerous state, local and foreign governments implemented certain measures to attempt to slow and limit the spread of COVID-19, including shelter-in-place and social distancing orders, which are subject to change and the respective governmental authorities may tighten such restrictions at any time. Due to such measures we have experienced, and may continue to experience, the closure of certain of our facilities, delays or disruptions in the supply of raw materials, component parts and services and decreased employee availability, which has resulted and may continue to result in delays in our ability to produce and distribute our products.
In addition, COVID-19 has adversely affected and may continue to adversely affect domestic and international economic activity, including reduced consumer confidence, instability in the credit and financial markets and reduced business and consumer spending, which may adversely affect our results of operations. Economic uncertainly as a result of COVID-19 may also make it difficult for us and our customers and suppliers to accurately forecast and plan future business activities and may weaken the financial position of some of our suppliers and customers.
Due to the uncertain nature and potential duration of the COVID-19 pandemic, we are unable to fully estimate the extent of the impact it may have on the markets in which we operate or our business at this time. The extent of such impact will depend on a number of factors, including the duration and severity of the COVID-19 pandemic, its effect on our customers, suppliers and employees, its effect on domestic and international economies and markets, including consumer discretionary spending, and the response of governmental authorities. We are continuing to take action to mitigate the impact of the COVID-19 pandemic on our business and operations, including through cost reduction measures and other initiatives, however the effectiveness of our mitigation efforts remains uncertain. A continued disruption of our operations and an on-going slowdown in domestic and international economic activity could materially and adversely affect our results of operations and financial condition.
To the extent COVID-19 continues to impact our business, financial position and results of operations, it may also have the effect of heightening certain of the other risks described in this Annual Report on Form 10-K, such as those relating to our international operations and global strategies, our dependence on third-party suppliers, and compliance with covenants under our credit facility.
Strategic Risks
Our business strategy is focused on residential repair and remodeling activity and, to a lesser extent, on new home construction activity, both of which are impacted by a number of economic factors and other factors.
Our business relies on residential repair and remodeling activity and, to a lesser extent, on new home construction activity. A number of factors impact consumers’ spending on home improvement projects as well as new home construction activity, including:
consumer confidence levels;
fluctuations in home prices;
existing home sales;
unemployment and underemployment levels;
consumer income and debt levels;
6


household formation;
the availability of skilled tradespeople for repair and remodeling work;
the availability of home equity loans and mortgages and the interest rates for and tax deductibility of such loans;
trends in lifestyle and housing design; and
natural disasters, terrorist acts, pandemics or other catastrophic events.
The fundamentals driving our business are impacted by economic cycles. Adverse changes or uncertainty involving the factors listed above or an economic contraction in the United States and worldwide could result in a decline in spending on residential repair and remodeling activity and a decline in demand for new home construction, which could adversely affect our results of operations and financial position.
We may not achieve all of the anticipated benefits of our strategic initiatives.
We continue to pursue our strategic initiatives of investing in our brands, developing innovative products, and focusing on operational excellence through the Masco Operating System, our methodology to drive growth and productivity. These initiatives are designed to grow revenue, improve profitability and increase shareholder value over the mid- to long-term. Our business performance and results could be adversely affected if we are unable to successfully execute these initiatives or if we are unable to execute these initiatives in a timely and efficient manner. We could also be adversely affected if we have not appropriately prioritized and balanced our initiatives or if we are unable to effectively manage change throughout our organization.
We may not be able to successfully execute our acquisition strategy or integrate businesses that we acquire.
Pursuing the acquisition of businesses complementary to our portfolio is a component of our strategy for future growth. If we are not able to identify suitable acquisition candidates or consummate potential acquisitions within a desired time frame or at acceptable terms and prices, our long-term competitive positioning may be affected. Even if we are successful in acquiring businesses, the businesses we acquire may not be able to achieve the revenue, profitability or growth we anticipate, or we may experience challenges and risks in integrating these businesses into our existing business. Such risks include:
difficulties realizing expected synergies and economies of scale;
diversion of management attention and our resources;
unforeseen liabilities;
issues or conflicts with our new or existing customers or suppliers; and
difficulties in retaining critical employees of the acquired businesses.
Future foreign acquisitions may also increase our exposure to foreign currency risks and risks associated with interpretation and enforcement of foreign regulations. Our failure to address these risks could cause us to incur additional costs and fail to realize the anticipated benefits of our acquisitions and could adversely affect our results of operations and financial position.
Business and Operational Risks
Variability in the cost and availability of our raw materials, component parts and finished goods, including the imposition of tariffs could affect our results of operations and financial position.
We purchase substantial amounts of raw materials, component parts and finished goods from outside sources, including international sources, and we manufacture certain of our products outside of the United States. Increases in the cost of the materials we purchase have in the past and may in the future increase the prices for our products, including as a result of new tariffs. For example, the continuing trade dispute between the United States and China has resulted in tariffs which raised the cost of certain of our materials. There is a risk that additional tariffs on imports from China or new tariffs could be imposed, which could further increase the cost of the materials we purchase or import or the products we manufacture internationally. Further, our production could be affected if we or our suppliers are unable to procure our requirements for various commodities, including, among others, brass, resins, titanium dioxide and zinc, or if a shortage of these commodities results in significantly increased costs. Rising energy costs could also increase our production and transportation costs. In addition, water is a significant component of our architectural coatings products and may be subject to restrictions in certain regions. These factors could adversely affect our results of operations and financial position.
7


It can be difficult for us to pass on to customers our cost increases. Our existing arrangements with customers, competitive considerations and customer resistance to price increases may delay or make us unable to adjust selling prices. If we are not able to sufficiently increase the prices of our products or achieve cost savings to offset increased material and production costs, including the impact of increasing tariffs, our results of operations and financial position could be adversely affected. Increased selling prices for our products have and may in the future lead to sales declines and loss of market share, particularly if those prices are not competitive. When our material costs decline, we have experienced and may in the future receive pressure from our customers to reduce our prices. Such reductions could adversely affect our results of operations and financial position.
From time to time we enter into long-term agreements with certain significant suppliers to help ensure continued availability of the commodities we require to produce our products and to establish firm pricing, but at times these contractual commitments may result in our paying above market prices for commodities during the term of the contract. Occasionally, we may also use derivative instruments, including commodity futures and swaps. This strategy increases the possibility that we may make commitments for these commodities at prices that subsequently exceed their market prices, which has occurred and could occur in the future and may adversely affect our results of operations and financial position.
We are dependent on third-party suppliers.
We are dependent on third-party suppliers for many of our products and components, and our ability to offer a wide variety of products depends on our ability to obtain an adequate and timely supply of these products and components. Failure of our suppliers to timely provide us quality products on commercially reasonable terms, or to comply with applicable legal and regulatory requirements, or our policies regarding our supplier business practices, could have a material adverse effect on our results of operations and financial position or could damage our reputation. Sourcing these products and components from alternate suppliers, including suppliers from new geographic regions, is time-consuming and costly and could result in inefficiencies or delays in our business operations. Accordingly, the loss of critical suppliers, or a substantial decrease in the availability of products or components from our suppliers, could disrupt our business and adversely affect our results of operations and financial position.
Many of the suppliers we rely upon are located in foreign countries, primarily China. The differences in business practices, shipping and delivery requirements, changes in economic conditions and trade policies and laws and regulations, together with the limited number of suppliers, have increased the complexity of our supply chain logistics and the potential for interruptions in our production scheduling. If we are unable to effectively manage our supply chain or if we experience constraints to or disruption in transporting the products or components or we have to pay higher transportation costs for timely delivery of our products or components, our results of operations and financial position could be adversely affected.
There are risks associated with our international operations and global strategies.
In 2020, 19 percent of our sales from continuing operations were made outside of North America (principally in Europe) and transacted in currencies other than the U.S. dollar. In addition to our European operations, we manufacture products in Asia and source products and components from third parties globally. Risks associated with our international operations include:
differences in culture, economic and labor conditions and practices;
the policies of the U.S. and foreign governments;
disruptions in trade relations and economic instability;
differences in enforcement of contract and intellectual property rights;
social and political unrest; and
natural disasters, terrorist attacks, pandemics or other catastrophic events.
We are also affected by domestic and international laws and regulations applicable to companies doing business abroad or importing and exporting goods and materials. These include tax laws, laws regulating competition, anti-bribery/anti-corruption and other business practices, and trade regulations, including duties and tariffs. Compliance with these laws is costly, and future changes to these laws may require significant management attention and disrupt our operations. Additionally, while it is difficult to assess what changes may occur and the relative effect on our international tax structure, significant changes in how U.S. and foreign jurisdictions tax cross-border transactions could adversely affect our results of operations and financial position.

8


Our results of operations and financial position are also impacted by changes in currency exchange rates. Unfavorable currency exchange rates, particularly the Euro, the Chinese Yuan Renminbi, the Canadian dollar and the British pound sterling, have in the past adversely affected us, and could adversely affect us in the future. Fluctuations in currency exchange rates may present challenges in comparing operating performance from period to period.
Additionally, following the United Kingdom's exit from the European Union, we could experience volatility in the currency exchange rates or a change in the demand for our products and services, particularly in our U.K. and European markets, or there could be disruption of our operations and our customers’ and suppliers’ businesses.
The long-term performance of our businesses relies on our ability to attract, develop and retain talented and diverse personnel.
To be successful, we must invest significant resources to attract, develop and retain highly qualified, talented and diverse employees at all levels, who have the experience, knowledge and expertise to implement our strategic initiatives. We compete for employees with a broad range of employers in many different industries, including large multinational firms, and we may fail in recruiting, developing, motivating and retaining them, particularly when there are low unemployment levels. From time to time, we have been affected by a shortage of qualified personnel in certain geographic areas. Our growth, competitive position and results of operations and financial position could be adversely affected by our failure to attract, develop and retain key employees and diverse talent, to build strong leadership teams, or to develop effective succession planning to assure smooth transitions of those employees and the knowledge and expertise they possess, or by a shortage of qualified employees.
Restrictive covenants in our credit agreement could limit our financial flexibility.
We must comply with both financial and nonfinancial covenants in our credit agreement, and in order to borrow under it, we cannot be in default with any of those provisions. Our ability to borrow under the credit agreement could be affected if our earnings significantly decline to a level where we are not in compliance with the financial covenants or if we default on any nonfinancial covenants. In the past, we have been able to amend the covenants in our credit agreement, but there can be no assurance that in the future we would be able to further amend them. If we were unable to borrow under our credit agreement, our financial flexibility could be restricted.
Competitive Risks
We could lose market share if we do not maintain our strong brands, develop innovative products or respond to changing purchasing practices and consumer preferences or if our reputation is damaged.
Our competitive advantage is due, in part, to our ability to maintain our strong brands and to develop and introduce innovative new and improved products. Our initiatives to invest in brand building, brand awareness and product innovation may not be successful. The uncertainties associated with developing and introducing innovative and improved products, such as gauging changing consumer demands and preferences and successfully developing, manufacturing, marketing and selling these products, may impact the success of our product introductions. If the products we introduce do not gain widespread acceptance or if our competitors improve their products more rapidly or effectively than we do, we could lose market share or be required to reduce our prices, which could adversely impact our results of operations and financial position.
In recent years, consumer purchasing practices and preferences have shifted and our customers’ business models and strategies have changed. As our customers execute their strategies to reach end consumers through multiple channels, they rely on us to support their efforts with our infrastructure, including maintaining robust and user-friendly websites with sufficient content for consumer research and providing comprehensive supply chain solutions and differentiated product development. If we are unable to successfully provide this support to our customers or if our customers are unable to successfully execute their strategies, our brands may lose market share.
If we do not timely and effectively identify and respond to changing consumer preferences, including a continued shift in consumer purchasing practices toward e-commerce, our relationships with our customers and with consumers could be harmed, the demand for our brands and products could be reduced and our results of operations and financial position could be adversely affected.


9


Our public image and reputation are important to maintaining our strong brands and could be adversely affected by various factors, including product quality and service, claims and comments in social media or the press, or a negative perception regarding our company practices, including regarding disputes or legal action against us, even if unfounded. Damage to our public image or reputation could adversely affect our sales and results of operations and financial position.
We face significant competition and operate in an evolving competitive landscape.
Our products face significant competition. We believe that brand reputation is an important factor affecting product selection and that we compete on the basis of product features, innovation, quality, customer service, warranty and price. We sell many of our products through home center retailers, online retailers, distributors and independent dealers and rely on these customers to market and promote our products to consumers. Our success with our customers is dependent on our ability to provide quality products and timely delivery. In addition, home center retailers, which have historically concentrated their sales efforts on retail consumers and remodelers, are selling directly to professional contractors and installers, which may adversely affect our margins on our products that contractors and installers would otherwise buy through our dealers and wholesalers.
Certain of our customers are selling products sourced from low-cost foreign manufacturers under their own private label brands, which directly compete with our brands. As this trend continues, we may experience lower demand for our products or a shift in the mix of some products we sell toward more value-priced or opening price point products, which may affect our profitability.
In addition, we face competitive pricing pressure in the marketplace, including sales promotion programs, that could affect our market share or result in price reductions, which could adversely impact our results of operations and financial position.
Further, the growing e-commerce channel brings an increased number of competitors and greater pricing transparency for consumers, as well as conflicts between our existing distribution channels and a need for different distribution methods. These factors could affect our results of operations and financial position. In addition, our relationships with our customers, including our home center customers, may be affected if we increase the amount of business we transact in the e-commerce channel.
If we are unable to maintain our competitive position in our industries, our results of operations and financial position could be adversely affected.
Our sales are concentrated with two significant customers and this concentration may continue to increase. In 2020, our net sales from our continuing operations to The Home Depot were $2.8 billion (approximately 39 percent of our consolidated net sales), and our net sales from our continuing operations to Lowe’s were less than 10 percent of our consolidated net sales. These home center retailers can significantly affect the prices we receive for our products and the terms and conditions on which we do business with them. Additionally, these home center retailers may reduce the number of vendors from which they purchase and could make significant changes in their volume of purchases from us. Although other retailers, dealers, distributors and homebuilders represent other channels of distribution for our products and services, we might not be able to quickly replace, if at all, the loss of a substantial portion of our sales to The Home Depot or the loss of all of our sales to Lowe’s, and any such loss would have a material adverse effect on our business, results of operations and financial position.
In addition, our Behr business grants Behr brand exclusivity in the retail sales channel in North America to The Home Depot, and from time to time, certain of our other businesses grant product and/or brand exclusivity to our customers. The granting of exclusivity affects our ability to sell those products and brands to other customers and can increase the complexity of our product offerings and can increase our costs.
Technology and Intellectual Property Risks
We rely on information systems and technology, and a breakdown of these systems could adversely affect our results of operations and financial position.
We rely on many information systems and technology to process, transmit, store and manage information to support our business activities. We may be adversely affected if our information systems breakdown, fail, or are no longer supported. In addition to the consequences that may occur from interruptions in our systems, global cybersecurity vulnerabilities, threats and more sophisticated and targeted attacks pose a risk to our information technology systems.
10


We have implemented security policies, processes and layers of defense designed to help identify and protect against intentional and unintentional misappropriation or corruption of our systems and information and disruption of our operations. Despite these efforts, our systems have been and may in the future be damaged, disrupted, or shut down due to cybersecurity attacks by unauthorized access, malware, ransomware, undetected intrusion, hardware failures, or other events, and in these circumstances our disaster recovery plans may be ineffective or inadequate. These breaches or intrusions have led and could in the future lead to business interruption, production or operational downtime, product shipment delays, exposure or loss of proprietary, confidential, personal or financial information, data corruption, an inability to report our financial results in a timely manner, damage to the reputation of our brands, damage to our relationships with our customers and suppliers, exposure to litigation, and increased costs associated with the remediation and mitigation of such attacks. Such events could adversely affect our results of operations and financial position. In addition, we could be adversely affected if any of our significant customers or suppliers experiences any similar events that disrupt their business operations or damage their reputation.
We may not experience the anticipated benefits from our investments in new technology.
We continue to invest in new technology systems throughout our company, including implementations of and upgrades to Enterprise Resource Planning (“ERP”) systems at our business units. ERP implementations and upgrades are complex and require significant management oversight, and we have experienced, and may continue to experience, unanticipated expenses and interruptions to our operations during these implementations. Our results of operations and financial position, as well as the effectiveness of our internal controls over financial reporting, could be adversely affected if we do not appropriately select, implement and upgrade our technology systems in a timely manner or if we experience significant unanticipated expenses or disruptions in connection with the implementation and upgrade of ERP systems.
We may not be able to adequately protect or prevent the unauthorized use of our intellectual property.
Protecting our intellectual property is important to our growth and innovation efforts. We own a number of patents, trade names, brand names and other forms of intellectual property in our products and manufacturing processes throughout the world. There can be no assurance that our efforts to protect our intellectual property rights will prevent violations. Our intellectual property has been and may again be challenged or infringed upon by third parties, particularly in countries where property rights are not highly developed or protected. In addition, the global nature of our business increases the risk that we may be unable to obtain or maintain our intellectual property rights on reasonable terms. Furthermore, others may assert intellectual property infringement claims against us. Current and former employees, contractors, customers or suppliers have or may have had access to proprietary or confidential information regarding our business operations that could harm us if used by them, or disclosed to others, including our competitors. Protecting and defending our intellectual property could be costly, time consuming and require significant resources. If we are not able to protect our existing intellectual property rights, or prevent unauthorized use of our intellectual property, sales of our products may be affected and we may experience reputational damage to our brand names, increased litigation costs and adverse impact to our competitive position, which could adversely affect our results of operations and financial position.
Litigation and Regulatory Risks
Claims and litigation could be costly.
We are involved in various claims and litigation, including class actions, mass torts and regulatory proceedings, that arise in the ordinary course of our business and that could have a material adverse effect on us. The types of matters may include, among others: competition, product liability, employment, warranty, advertising, contract, personal injury, environmental, intellectual property, product compliance and insurance coverage. The outcome and effect of these matters are inherently unpredictable, and defending and resolving them can be costly and can divert management’s attention. We have and may continue to incur significant costs as a result of claims and litigation.
We are also subject to product safety regulations, product recalls and direct claims for product liability that can result in significant costs and, regardless of the ultimate outcome, create adverse publicity and damage the reputation of our brands and business. Also, we rely on other manufacturers to provide products or components for products that we sell. Due to the difficulty of controlling the quality of products and components we source from other manufacturers, we are exposed to risks relating to the quality of such products and to limitations on our recourse against such suppliers.

11


We maintain insurance against some, but not all, of the risks of loss resulting from claims and litigation. The levels of insurance we maintain may not be adequate to fully cover our losses or liabilities. If any significant accident, judgment, claim or other event is not fully insured or indemnified against, it could adversely affect our results of operations and financial position.
Refer to Note U to the consolidated financial statements included in Item 8 of this Report for additional information about litigation involving our businesses.
Compliance with laws, government regulation and industry standards is costly, and our failure to comply could adversely affect our results of operations and financial position.
We are subject to a wide variety of federal, state, local and foreign laws and regulations pertaining to:
securities matters;
taxation;
anti-bribery/anti-corruption;
employment matters;
minimum wage requirements;
environment, health and safety matters;
the protection of employees and consumers;
product compliance;
competition practices;
trade, including duties and tariffs;
data privacy and the collection and storage of information; and
climate change and protection of the environment.
In addition to complying with current requirements and known future requirements, even more stringent requirements could be imposed on us in the future.
As we sell new types of products or existing products in new geographic areas or channels or for new applications, we are subject to the requirements applicable to those sales. Additionally, some of our products must be certified by industry organizations. Compliance with new or changed laws, regulations and industry standards may require us to alter our product designs, our manufacturing processes, our packaging or our sourcing. These compliance activities are costly and require significant management attention and resources. If we do not effectively and timely comply with such regulations and industry standards, our results of operations and financial position could be adversely affected.

Item 1B.    Unresolved Staff Comments.
None.
Item 2.Properties.
The table below lists principal North American properties as of December 31, 2020.
Business SegmentManufacturingWarehouse and
Distribution
Plumbing Products21 
Decorative Architectural Products18 
Totals29 26 
Most of our North American facilities range from single warehouse buildings to complex manufacturing facilities. We own most of our North American manufacturing facilities, none of which is subject to significant encumbrances. A substantial number of our warehouse and distribution facilities are leased.




12


The table below lists principal properties outside of North America as of December 31, 2020.
Business SegmentManufacturingWarehouse and
Distribution
Plumbing Products10 16 
Decorative Architectural Products— — 
Totals10 16 
Most of our international facilities are in China, Germany and the United Kingdom. We own most of our international manufacturing facilities, none of which is subject to significant encumbrances. A substantial number of our international warehouse and distribution facilities are leased.
We lease our corporate headquarters in Livonia, Michigan, and we own a building in Taylor, Michigan that is used by our Masco Technical Services (research and development) department. We also lease an office facility in Luxembourg, which serves as a headquarters for most of our foreign operations.
Each of our operating divisions assesses the manufacturing, distribution and other facilities needed to meet its operating requirements. Our buildings, machinery and equipment have been generally well maintained and are in good operating condition. We believe our facilities have sufficient capacity and are adequate for our production and distribution requirements.
Item 3.Legal Proceedings.
Information regarding legal proceedings involving us is set forth in Note U to the consolidated financial statements included in Item 8 of this Report and is incorporated herein by reference.
Item 4.Mine Safety Disclosures.
Not applicable.
13


PART II
Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The New York Stock Exchange is the principal market on which our common stock is traded, under the ticker symbol MAS. On January 31, 2021, there were approximately 2,900 holders of record of our common stock.
We expect that our practice of paying quarterly dividends on our common stock will continue, although the payment of future dividends is at the discretion of our Board of Directors and will depend upon our earnings, capital requirements, financial condition and other factors. Subject to declaration by our Board of Directors, we intend to increase the annual dividend to $0.94 per share, beginning in the second quarter of 2021.
In September 2019, 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. During 2020, we repurchased and retired 18.8 million shares of our common stock (including 0.4 million shares to offset the dilutive impact of restricted stock units granted during the year), for approximately $727 million. At December 31, 2020, we had $774 million remaining under the 2019 authorization. Our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion shares of our common stock in open-market transactions or otherwise, effective February 10, 2021, replacing the 2019 authorization.
The following table provides information regarding the repurchase of our common stock for the three-month period ended December 31, 2020.
PeriodTotal Number
of Shares
Purchased
Average Price
Paid Per
Common Share
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs
Maximum Value of
Shares That May
Yet Be Purchased
Under the Plans
or Programs
10/1/20 - 10/31/2093,847 $53.28 93,847 $894,936,955 
11/1/20 - 11/30/20921,892 $54.99 921,892 $844,243,773 
12/1/20 - 12/31/201,315,241 $53.23 1,315,241 $774,230,631 
Total for the quarter2,330,980 2,330,980 $774,230,631 



























14


Performance Graph
The table below compares the cumulative total shareholder return on our common stock with the cumulative total return of (i) the Standard & Poor's 500 Composite Stock Index ("S&P 500 Index"), (ii) The Standard & Poor's Industrials Index ("S&P Industrials Index") and (iii) the Standard & Poor's Consumer Durables & Apparel Index ("S&P Consumer Durables & Apparel Index"), from December 31, 2015 through December 31, 2020, when the closing price of our common stock was $54.93. The graph assumes investments of $100 on December 31, 2015 in our common stock and in each of the three indices and the reinvestment of dividends.
mas-20201231_g1.jpg
The table below sets forth the value, as of December 31 for each of the years indicated, of a $100 investment made on December 31, 2015 in each of our common stock, the S&P 500 Index, the S&P Industrials Index and the S&P Consumer Durables & Apparel Index and includes the reinvestment of dividends.
20162017201820192020
Masco$111.73 $155.27 $103.32 $169.58 $194.10 
S&P 500 Index$109.54 $130.81 $122.65 $158.07 $183.77 
S&P Industrials Index$116.08 $137.60 $116.96 $148.34 $161.70 
S&P Consumer Durables & Apparel Index$92.67 $108.05 $93.67 $123.90 $146.71 

15


Item 6.Selected Financial Data.
 Dollars in Millions (Except Per Common Share Data)
 20202019201820172016
Net sales (1)
$7,188 $6,707 $6,654 $6,014 $5,754 
Operating profit (1)
1,295 1,088 1,077 1,029 986 
Income from continuing operations attributable to Masco Corporation (1)
810 639 636 426 426 
Income per common share from continuing operations (1):
     
Basic$3.05 $2.21 $2.06 $1.34 $1.29 
Diluted3.04 2.20 2.05 1.33 1.28 
Dividends declared0.550 0.510 0.450 0.410 0.390 
Dividends paid0.545 0.495 0.435 0.405 0.385 
At December 31:     
Total assets$5,777 $5,027 $5,393 $5,534 $5,164 
Long-term debt2,792 2,771 2,971 2,969 2,995 
Shareholders' equity (deficit) 421 (56)69 183 (96)
______________________________

(1)Amounts exclude discontinued operations for all periods presented. Refer to Note C to the consolidated financial statements for further details.
16


Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations.
The financial and business analysis below provides information which we believe is relevant to an assessment and understanding of our consolidated financial position, results of operations and cash flows. This financial and business analysis should be read in conjunction with the consolidated financial statements and related notes.
The following discussion and certain other sections of this Report contain statements that reflect our views about our future performance and constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "outlook," "believe," "anticipate," "appear," "may," "will," "should," "intend," "plan," "estimate," "expect," "assume," "seek," "forecast," and similar references to future periods. Our views about future performance involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements.
In addition to the various factors included in the "Executive Level Overview," "Critical Accounting Policies and Estimates" and "Outlook for the Company" sections, our future performance may be affected by the levels of residential repair and remodel activity, and to a lesser extent, new home construction, our ability to maintain our strong brands and reputation and to develop innovative products, our ability to maintain our competitive position in our industries, our reliance on key customers, the length and severity of the ongoing COVID-19 pandemic, including its impact on domestic and international economic activity, consumer confidence, our production capabilities, our employees and our supply chain, the cost and availability of materials and the imposition of tariffs, our dependence on third-party suppliers, risks associated with our international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire, our ability to attract, develop and retain talented and diverse personnel, risks associated with our reliance on information systems and technology, and our ability to achieve the anticipated benefits from our investments in new technology. These and other factors are discussed in detail in Item 1A. "Risk Factors" of this Report. Any forward-looking statement made by us speaks only as of the date on which it was made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

Executive Level Overview
We design, manufacture and distribute branded home improvement and building products. These products are sold primarily for repair and remodeling activity and, to a lesser extent, new home construction. We sell our products through home center retailers, online retailers, wholesalers and distributors, mass merchandisers, hardware stores, direct to the consumer and homebuilders.
2020 Results
Net sales were positively impacted by increased sales volume across our two segments. Such increases were partially offset by unfavorable net selling prices in our Decorative Architectural Products segment.
Our Plumbing Products segment operating profit was positively impacted by cost saving initiatives, including actions taken to mitigate the COVID-19 pandemic impact, and higher sales volume. These positive impacts were partially offset by increased commodity costs, including tariffs, and an increase in other expenses (such as salaries and legal costs). Our Decorative Architectural Products segment operating profit benefited primarily from higher sales volume mostly due to paints and other coating products, as well as cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact. Additionally, operating profit was positively impacted by the non-recurrence of a 2019 non-cash impairment charge related to an other indefinite-lived intangible asset for a trademark associated with lighting products. These positive impacts were partially offset by unfavorable net selling prices, higher fixed expenses in our lighting business, and an increase in other expenses (such as salaries, legal costs, and advertising).




17


COVID-19 Impact and Response
During 2020, certain aspects of our businesses were adversely affected by the COVID-19 pandemic. Many, but not all, of our businesses remained operating in 2020 because the products we provide are critical to infrastructure sectors and the day-to-day operations of homes and businesses in our communities as defined by applicable local orders. However, some of our facilities experienced reduced capacity due to social distancing requirements and/or full closures ranging from a few days to 6-8 weeks, and if certain governmental orders are reimposed or if we are required to close a facility for employee safety reasons, we could experience new or extended closures which might adversely impact our ability to produce and distribute our products. Operational activity that was previously slowed at certain of our facilities, as a result of the pandemic and governmental orders, largely resumed operations at normal capacities by the third quarter of 2020 enabling them to progress on the fulfillment of production backlogs that developed in the first half of the year as well as to meet current consumer demand. Finally, we may experience supply chain disruptions, particularly disruptions related to our ability to source plumbing, lighting and builders’ hardware products.
Given our portfolio of lower ticket, repair and remodel-oriented product and the increased demand for repair and remodel spending, we experienced strong consumer demand in 2020. These levels of demand may or may not continue and we may experience an adverse impact in our 2021 results due to economic contraction as a result of continued high unemployment levels and remaining or potential renewed shelter-in-place and social distancing orders. The COVID-19 pandemic and the mitigating measures taken by many countries have adversely impacted and could in the future materially adversely impact the Company’s business, results of operations and financial condition.
During 2020, we implemented mitigating efforts to manage operating spend and preserve cash and liquidity including the temporary suspension of our share repurchase activity beginning in the second quarter of 2020, which we resumed in the fourth quarter of 2020. Currently, we have not identified, and will continue to monitor for, any substantive risk attributable to customer credit and have not experienced a significant impact from permanent store closures or retail bankruptcies.
We continue to be committed to the safety and well-being of our employees during this time, and, led by our cross-functional Infectious Illness Response Team, we have employed best practices and followed guidance from the World Health Organization and the Centers for Disease Control and Prevention. We have implemented and are continuing to implement alternative work arrangements to support the health and safety of our employees, including working remotely and avoiding large gatherings. In addition, we have modified work areas and workstations to provide protective measures for employees, are staggering shifts, requiring the use of face coverings, practicing social distancing and increasing the cleaning of our facilities, and in the event that we learn of an employee testing positive for COVID-19, we are completing contact tracing and requiring impacted employees to self-quarantine.
18


Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of these financial statements requires us to make certain estimates and assumptions that affect or could have affected the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We regularly review our estimates and assumptions, which are based upon historical experience, as well as current economic conditions and various other factors (including the anticipated impact of the COVID-19 pandemic) that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities and related disclosures, and future revenues and expenses, that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions.
Note A to the consolidated financial statements includes our accounting policies, estimates and methods used in the preparation of our consolidated financial statements.
We believe that the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition and Receivables
We recognize revenue as control of our products is transferred to our customers, which is generally at the time of shipment or upon delivery based on the contractual terms with our customers. We provide customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. These customer programs and incentives are considered variable consideration. We include in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. This determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume forecasts as it relates to our volume-based incentives. This determination is updated each reporting period.
We monitor our exposure for credit losses on customer receivable balances and the credit worthiness of customers on an on-going basis and maintain allowances for doubtful accounts receivable for estimated losses resulting from the inability of our customers to make required payments. Allowances are estimated based upon specific customer balances, where a risk of loss has been identified, and also include a provision for losses based upon historical collection and write-off activity as well as reasonable and supportable forecast information that considers macro-economic factors and industry-specific trends associated with our businesses, among others. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity.
Goodwill and Other Intangible Assets
We record the excess of purchase cost over the fair value of net tangible assets of acquired companies as goodwill or other identifiable intangible assets. In the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, we complete the impairment testing of goodwill utilizing a discounted cash flow method. We selected the discounted cash flow methodology because we believe that it is comparable to what would be used by market participants. We have defined our reporting units and completed the impairment testing of goodwill at the operating segment level.







19


Determining market values using a discounted cash flow method requires us to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. Our judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, different estimates and assumptions could result in different outcomes. In estimating future cash flows, we rely on internally generated five-year forecasts for sales and operating profits, and, currently, a two percent to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. We generally develop these forecasts based upon, among other things, recent sales data for existing products, planned timing of new product launches, estimated repair and remodel activity and, to a lesser extent, estimated housing starts. Our assumptions included U.S. Gross Domestic Product growing at approximately 4.2 percent in 2021 and develop into a relatively stable 2.8 percent each year thereafter, and a eurozone Gross Domestic Product growing at approximately 5.2 percent in 2021 and developing into a relatively stable 2.2 percent per annum over the five-year forecast.
We utilize our weighted average cost of capital of approximately 8.0 percent as the basis to determine the discount rate to apply to the estimated future cash flows. Our weighted average cost of capital in 2020 was consistent with 2019. In 2020, based upon our assessment of the risks impacting each of our businesses, we applied a risk premium to increase the discount rate to a range of 10.0 percent to 12.0 percent for our reporting units.
If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized to the extent that a reporting unit's recorded carrying value exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.
In the fourth quarter of 2020, we estimated that future discounted cash flows projected for all of our reporting units were greater than the carrying values. Accordingly, we did not recognize any impairment charges for goodwill. A 10 percent decrease in the estimated fair value of our reporting units would have resulted in a $6 million impairment to one of our reporting units.
We review our other indefinite-lived intangible assets for impairment annually, in the fourth quarter, or as events occur or circumstances change that indicate the assets may be impaired without regard to the business unit. Potential impairment is identified by comparing the fair value of an other indefinite-lived intangible asset to its carrying value. We utilize a relief-from-royalty model to estimate the fair value of other indefinite-lived intangible assets. We consider the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term. We also consider the profitability of the business, among other factors, to determine the royalty rate for use in the impairment assessment.
We utilize our weighted average cost of capital of approximately 8.0 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2020, based upon our assessment of the risks impacting each of our businesses and the nature of the trade name, we applied a risk premium to increase the discount rate to a range of 11.0 percent to 12.5 percent for our other indefinite-lived intangible assets.
In the fourth quarter of 2020, we estimated that future discounted cash flows projected for our other indefinite-lived intangible assets were greater than the carrying values. Accordingly, we did not recognize any impairment charges for other indefinite-lived intangible assets. A 10 percent decrease in the estimated fair value of our other indefinite-lived intangible assets would have resulted in a $3 million impairment for one of our trade names.
Employee Retirement Plans
As of January 1, 2010, substantially all our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals.
Accounting for defined-benefit pension plans involves estimating the cost of benefits to be provided in the future, based upon vested years of service, and attributing those costs over the time period each employee works. We develop our pension costs and obligations from actuarial valuations. Inherent in these valuations are key assumptions regarding expected return on plan assets, mortality rates and discount rates for obligations and expenses. We consider current market conditions, including changes in interest rates, in selecting these assumptions. While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, different estimates and assumptions could result in different reported pension costs and obligations within our consolidated financial statements.
20


In December 2019, our Board of Directors approved the termination of our qualified domestic defined-benefit pension plans. As a result of this decision, the projected benefit obligations for these plans were increased to reflect the incremental costs to terminate the plans. Upon termination in 2021, we expect to recognize from accumulated other comprehensive loss approximately $450 million of pre-tax actuarial losses and approximately $95 million of income tax benefit, which includes approximately $11 million of tax expense from the elimination of a disproportionate tax effect.
In December 2020, our discount rate for obligations decreased to a weighted average of 1.7 percent from 2.5 percent. The discount rate for obligations is based primarily upon the expected duration of each defined-benefit pension plan's liabilities matched to the December 31, 2020 Willis Towers Watson Rate Link Curve. For our qualified domestic defined-benefit pension plans, the projected benefit obligations include the estimated incremental cost related to the termination. For these plans, the discount rate was then set equal to the discount rate that results in the same projected benefit obligation resulting from the normal projected benefit obligation calculation plus the estimated incremental cost to terminate. The discount rates we use for our defined-benefit pension plans ranged from 0.7 percent to 2.1 percent, with the most significant portion of the liabilities having a discount rate for obligations of 1.6 percent or higher. Due to the anticipated termination of our qualified domestic defined-benefit pension plans and the related plan assets comprised mostly of fixed income and cash, the assumed asset return for these assets was 2.0 percent.
The net underfunded amount for our qualified defined-benefit pension plans, which is the difference between the projected benefit obligation and plan assets, increased to $255 million at December 31, 2020 from $254 million at December 31, 2019. Our projected benefit obligation for our unfunded, non-qualified, defined-benefit pension plans increased to $162 million at December 31, 2020 from $161 million at December 31, 2019. These unfunded plans are not subject to the funding requirements of the Pension Protection Act of 2006. In accordance with the Pension Protection Act, the Adjusted Funding Target Attainment Percentage for the various defined-benefit pension plans ranges from 113 percent to 117 percent.
The increase in our qualified defined-benefit pension plan projected benefit obligation was primarily impacted by a decrease in the discount rate. During 2020, we contributed $57 million to our qualified defined-benefit pension plans, and our qualified defined-benefit pension plan assets had a positive return of 9.7 percent. Refer to Note N to the consolidated financial statements for additional information.
We expect pension expense for our qualified defined-benefit pension plans to be $470 million in 2021 compared with $30 million in 2020. The expected increase in pension expense is due to the anticipated termination of our qualified domestic defined-benefit pension plans and the recognition of losses currently reported in accumulated other comprehensive loss. If we assumed that the future return on plan assets was 50 basis points lower than the assumed asset return and the discount rate decreased by 50 basis points, the 2021 pension expense would increase by $60 million. Assuming a 0 percent asset return for our qualified domestic defined-benefit pension plans, projected 2021 total qualified defined-benefit pension plan expenses are expected to be approximately $474 million. We expect pension expense for our non-qualified defined-benefit pension plans to be $6 million in 2021, compared to $8 million recognized in 2020.
Consistent with our plan to terminate the qualified domestic defined-benefit pension plans, we currently anticipate contributing approximately $140 million in 2021. Refer to Note N to the consolidated financial statements for further information regarding the funding of our plans.
Income Taxes
Deferred taxes are recognized based on the future tax consequences of differences between the financial statement carrying value of assets and liabilities and their respective tax basis. The future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income.
If, based upon all available evidence, both positive and negative, it is more likely than not (more than 50 percent likely) such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company's three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable, and the accounting guidance restricts the amount of reliance we can place on projected taxable income to support the recovery of the deferred tax assets.
21


We maintain a valuation allowance on certain state and foreign deferred tax assets as of December 31, 2020. Should we determine that we would not be able to realize our remaining deferred tax assets in these jurisdictions in the future, an adjustment to the valuation allowance would be recorded in the period such determination is made. The need to maintain a valuation allowance against deferred tax assets may cause greater volatility in our effective tax rate.
Corporate Development Strategy
We expect to maintain a balanced growth strategy pursuing organic growth by maximizing the full potential of our existing businesses and, as appropriate, complementing our existing business with strategic acquisitions. During 2020, we completed the acquisitions of Kraus, Work Tools and SmarTap and signed an agreement to acquire majority interest in ESS.
In addition, we actively manage our portfolio of companies by divesting of those businesses that do not align with our long-term growth strategy. We will continue to review all of our businesses to determine which businesses, if any, may not align with our long-term growth strategy.

Liquidity and Capital Resources
Overview of Capital Structure
Historically, we have largely funded our growth through cash provided by our operations, the issuance of notes in the financial markets, bank borrowings and the issuance of our common stock, including issuances for certain mergers and acquisitions. Maintaining high levels of liquidity and focusing on cash generation are among our financial strategies. Our capital allocation strategy includes reinvesting in our business, balancing share repurchases with potential acquisitions and maintaining an appropriate dividend.
We had cash and cash investments of approximately $1.3 billion at December 31, 2020. Our cash and cash investments consist of overnight interest bearing money market demand accounts, time deposit accounts, and money market mutual funds containing government securities and treasury obligations. While we attempt to diversify these investments in a prudent manner to minimize risk, it is possible that future changes in the financial markets could affect the security or availability of these investments.
Of the $1.3 billion and $697 million of cash and cash investments we held at December 31, 2020 and 2019, respectively, $385 million and $297 million, respectively, was held in our foreign subsidiaries. If these funds were needed for our operations in the U.S., their repatriation into the U.S. would not result in significant additional U.S. income tax or foreign withholding tax, as we have recorded such taxes on substantially all undistributed foreign earnings, except for those that are legally restricted.
Our current ratio was 1.8 to 1 at both December 31, 2020 and 2019.
Our total debt as a percent of total capitalization was 87 percent and 102 percent at December 31, 2020 and 2019, respectively. Refer to Note L to the consolidated financial statements for additional information.
Senior Indebtedness
On September 18, 2020, we issued $300 million of 2.0% Notes due October 1, 2030 (the "2030 Notes") and received proceeds of $300 million, net of discount, for the issuance of the 2030 Notes. Also on September 18, 2020, we issued an incremental $100 million on our existing 4.5% Notes due May 15, 2047 (the "2047 Notes") and received proceeds of $119 million, including a premium, for the issuance of the 2047 Notes. The incremental $100 million formed a single series with the existing $300 million of 4.5% Notes due May 15, 2047. The 2030 Notes and 2047 Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On September 29, 2020, proceeds from the debt issuances were used to repay and early retire $400 million of our 3.5% Notes due April 1, 2021. In connection with this early retirement, we incurred a loss on debt extinguishment of $6 million, which was recorded as interest expense in our consolidated statement of operations.
On December 19, 2019, we redeemed and retired $201 million of our 7.125% Notes due March 15, 2020. In connection with this early retirement, we incurred a loss on debt extinguishment of $2 million, which was recorded as interest expense in our consolidated statement of operations.
On April 16, 2018, we repaid and retired all of our $114 million, 6.625% Notes on the scheduled repayment date.
22


Credit Agreement
On March 13, 2019, we entered into a credit agreement (the "Credit Agreement") with an aggregate commitment of $1.0 billion and a maturity date of March 13, 2024. Under the 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. See Note L to the consolidated financial statements.
The 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) a minimum interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0.  We were in compliance with all covenants and no borrowings were outstanding under our Credit Agreement at December 31, 2020.
Acquisitions
During 2020, we acquired substantially all of the net assets of Kraus and Work Tools, and all of the share capital of SmarTap for a combined $175 million of cash and $5 million of debt.
Additionally, we entered into an agreement to acquire a 75.1% equity interest in ESS for approximately €45 million ($55 million) subject to working capital and other adjustments. A cash payment was made to a third-party notary for $52 million on December 29, 2020 for the acquisition of this equity interest in advance of the transaction closing on January 4, 2021.
On March 9, 2018, we acquired substantially all of the net assets of the L.D. Kichler Co. ("Kichler"). The purchase price, net of $2 million cash acquired, consisted of $549 million paid with cash on hand.
Divestitures
During 2020, we completed the divestiture of our Cabinetry business for proceeds of $853 million, net of cash disposed.
During 2019, we completed the divestitures of our Milgard Windows and Doors business ("Milgard") and our UK Window Group business ("UKWG") for combined proceeds of $722 million.
Share Repurchases
In September 2019, 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.
During 2020, we repurchased and retired 18.8 million shares of our common stock (including 0.4 million shares to offset the dilutive impact of restricted stock units granted during the year), for approximately $727 million. At December 31, 2020, we had $774 million remaining under the 2019 authorization. Our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion shares of our common stock in open-market transactions or otherwise, effective February 10, 2021, replacing the 2019 authorization.
During 2019, we repurchased and retired 20.1 million shares of our common stock (including 0.6 million shares to offset the dilutive impact of long-term stock awards granted in 2019), for approximately $896 million.
During 2018, we repurchased and retired 18.6 million shares of our common stock (including 0.7 million shares to offset the dilutive impact of long-term stock awards granted in 2018) for approximately $654 million.
Consistent with past practice and as part of our strategic initiative to drive shareholder value, we anticipate using approximately $800 million of cash for share repurchases (including shares which will be purchased to offset any dilution from restricted stock units granted as part of our compensation programs) in 2021.
Dividend to holder of Common Shares
In the third quarter of 2020, we increased our quarterly dividend to $0.14 per common share from $0.135 per common share.
As part of our capital allocation strategy and subject to declaration by our Board of Directors, we intend to increase the annual dividend to $0.94 per share, beginning in the second quarter of 2021.


23


Other Liquidity and Capital Resource Activities
As part of our ongoing efforts to improve our cash flow and related liquidity, we work with suppliers to optimize our terms and conditions, including extending payment terms. We also 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.
All outstanding payments owed under the program are recorded within accounts payable in our consolidated balance sheets. The amounts owed to participating financial institutions under the program and included in accounts payable for our continuing operations were $45 million and $29 million at December 31, 2020 and 2019, respectively. We account for all payments made under the program as a reduction to our cash flows from operations and reported within our increase (decrease) in accounts payable and accrued liabilities, net, line within our consolidated statements of cash flows. The amounts settled through the program and paid to participating financial institutions were $146 million, $164 million, and $117 million for our continuing operations during the years ended December 31, 2020, 2019, and 2018, respectively. A downgrade in our credit rating or changes in the financial markets could limit the financial institutions’ willingness to commit funds to, and participate in, the program. We do not believe such risk would have a material impact on our working capital or cash flows, as substantially all of our payments are made outside of the program.
We utilize derivative and hedging instruments to manage our exposure to currency fluctuations, primarily related to the European euro, British pound, the Chinese renminbi and the U.S. dollar; occasionally, we have also used derivative and hedging instruments to manage our exposure to commodity cost fluctuations, primarily zinc and copper, and interest rate fluctuations, primarily related to debt issuances. We review our hedging program, derivative positions and overall risk management on a regular basis. We currently do not have any derivative instruments for which we have designated hedge accounting.

24


Cash Flows
Significant sources and (uses) of cash in the past three years are summarized as follows, in millions:
 202020192018
Net cash from operating activities$953 $833 $1,032 
Retirement of notes(400)(201)(114)
Purchase of Company common stock(727)(896)(654)
Cash dividends paid(145)(144)(134)
Dividends paid to noncontrolling interest(23)(42)(89)
Capital expenditures(114)(162)(219)
Debt extinguishment costs(5)(2)— 
Acquisition of businesses, net of cash acquired(227)— (549)
Issuance of notes, net of issuance costs415 — — 
Employee withholding taxes paid on stock-based compensation(25)(23)(42)
Proceeds from disposition of:   
Businesses, net of cash disposed870 722 — 
Short-term bank deposits, net— — 108 
Property and equipment34 14 
Financial investments
Payment of debt(2)(8)(1)
Effect of exchange rate changes on cash and cash investments31 14 
Other, net24 12 
Cash increase (decrease) $629 $138 $(635)
Our working capital days were as follows:
 At December 31,
 20202019
Receivable days54 54 
Inventory days72 67 
Accounts Payable days71 68 
Working capital (receivables plus inventories, less accounts payable) as a percentage of net sales
15.6 %15.7 %
Net cash provided by operations of $953 million consisted primarily of net income adjusted for certain non-cash items, including depreciation and amortization expense of $133 million and stock-based compensation expense, as well as changes in working capital amounts and employee withholding taxes paid on stock-based compensation, which is classified as a financing activity. These amounts were partially offset by the net gain on the sale of Cabinetry as well as contributions to our defined-benefit pension plans.
Net cash used for financing activities was $886 million, primarily due to $727 million for the repurchase and retirement of Company common stock (as part of our strategic initiative to drive shareholder value), $400 million for the early retirement of our 3.5% Notes due April 1, 2021, $145 million for the payment of cash dividends, $25 million for employee withholding taxes paid on stock-based compensation and $23 million for dividends paid to noncontrolling interests. These uses of cash were partially offset by the issuances of $300 million of 2.0% Notes due October 1, 2030 and an incremental $100 million on our existing 4.5% Notes due May 15, 2047 that was issued at a premium of $19 million, and $26 million of proceeds from the exercise of stock options.
Net cash provided by investing activities was $531 million, primarily driven by $870 million of proceeds from the sale of Cabinetry, net of cash disposed. These proceeds were partially offset by $175 million for the 2020 acquisitions, net of cash acquired, $114 million for capital expenditures and the $52 million advance payment for the acquisition of ESS that closed on January 4, 2021.
25


We continue to invest in our manufacturing and distribution operations of those businesses that align with our long-term growth strategy to increase our productivity, improve customer service and support product innovation. Capital expenditures for 2020 were $114 million, compared with $162 million for 2019 and $219 million for 2018. For 2021, capital expenditures, excluding any potential 2021 acquisitions, are expected to be approximately $150 million. Depreciation and amortization expense for 2020 totaled $133 million, compared with $159 million for 2019 and $156 million for 2018. For 2021, depreciation and amortization expense, excluding any potential 2021 acquisitions, is expected to be approximately $155 million. Amortization expense totaled $28 million in 2020, compared with $27 million and $24 million in 2019 and 2018, respectively.
Costs of environmental responsibilities and compliance with existing environmental laws and regulations have not had, nor do we expect them to have, a material effect on our capital expenditures, financial position or results of operations.
We believe that our present cash balance and cash flows from operations, and borrowing availability under our Credit Agreement are sufficient to fund our near-term working capital and other investment needs. We believe that our longer-term working capital and other general corporate requirements will be satisfied through cash flows from operations and, to the extent necessary, from bank borrowings and future financial market activities. However, due to the highly uncertain nature, severity and duration or resurgence of the COVID-19 pandemic and its impact on our customer, suppliers and employees, we are unable to fully estimate the extent of the impact it may have on our future financial condition.

Consolidated Results of Operations
We report our financial results in accordance with GAAP in the United States. However, we believe that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, our reported results under GAAP.
The following discussion of consolidated results of operations compares 2020 and 2019. Descriptions of changes between 2019 and 2018 were excluded as there were no changes from what was disclosed in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the December 31, 2019 Form 10-K.

Sales and Operations
Net sales for 2020 were $7.2 billion, which increased seven percent compared to 2019. Excluding the effect of currency translation, net sales increased seven percent. The following table reconciles reported net sales to net sales excluding the effect of currency translation, in millions:
 
Year Ended
December 31
 20202019
Net sales, as reported$7,188 $6,707 
Currency translation(13)— 
Net sales, excluding the effect of currency translation$7,175 $6,707 

Net sales for 2020 increased seven percent primarily due to higher sales volume of our paints and other coating products, plumbing products, and to a lesser extent, builders' hardware, which, in aggregate, increased sales by eight percent. This increase was slightly offset by unfavorable net selling prices of paints and other coating products, which decreased sales by one percent.
Our gross profit margins were 36.0 percent, 35.4 percent and 35.0 percent in 2020, 2019 and 2018, respectively. The 2020 gross profit margin was positively impacted by increased sales volume and cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact. Such increases were slightly offset by unfavorable net selling prices and increased commodity costs, partially attributed to tariffs.


26


Selling, general and administrative expenses as a percent of sales were 18.0 percent in 2020 compared with 19.0 percent in 2019 and 18.8 percent in 2018. The decrease in selling, general, and administrative expenses as a percentage of sales in 2020 was primarily driven by cost containment activities including those actions taken to mitigate the COVID-19 pandemic impact and leverage of fixed expenses due primarily to increased sales volume. This improvement was partially offset by an increase in other expenses (such as salaries, legal costs and advertising).
The following table reconciles reported operating profit to operating profit, as adjusted to exclude certain items, dollars in millions:
 202020192018
Operating profit, as reported$1,295 $1,088 $1,077 
Rationalization charges11 13 
Kichler inventory step up adjustment— — 40 
Impairment charge for other intangible assets— — 
Operating profit, as adjusted$1,306 $1,110 $1,126 
Operating profit margins, as reported18.0 %16.2 %16.2 %
Operating profit margins, as adjusted18.2 %16.5 %16.9 %
Operating profit in 2020 was positively affected by increased sales volume and cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact. These positive impacts were partially offset by unfavorable net selling prices, increased commodity costs, partially attributed to tariffs, higher fixed expenses in our lighting business, and an increase in other expenses (such as salaries, legal cost and advertising).
Other Income (Expense), Net
Interest expense was $144 million, $159 million and $156 million in 2020, 2019 and 2018, respectively.
Other, net, for 2020 included $35 million of net periodic pension and post-retirement benefit cost and $10 million of realized foreign currency transaction losses, partially offset by $10 million of dividend income related to preferred stock of ACProducts Holding, Inc. and $9 million of income due from an escrow settlement.
Income Taxes
Our effective tax rate on income from continuing operations was 24 percent, 25 percent and 24 percent in 2020, 2019 and 2018, respectively. As a result of IRS guidance issued in the third quarter of 2020 that allows us to retroactively exclude certain high-taxed foreign income from the U.S. tax effects on Global Intangible Low-taxed Income ("GILTI") back to 2018, we lowered our normalized tax rate from 26 percent to 25 percent for 2020, 2019 and 2018.
Our effective tax rate in 2020 was lower than our normalized tax rate of 25 percent due primarily to a $5 million income tax benefit from a change in judgment regarding the realizability of certain deferred tax assets in our foreign jurisdictions, an additional $4 million tax benefit from stock-based compensation payments and a $6 million tax benefit due to an anticipated refund claim from the retroactive application of the exclusion of certain high-taxed foreign income from the U.S. tax effects on GILTI back to 2018.
Our effective tax rate in 2018 was lower than our normalized tax rate of 25 percent due primarily to an additional $14 million tax benefit from stock-based compensation payments, partially offset by a $6 million tax expense recognized on GILTI, prior to the retroactive exclusion of certain high-taxed foreign income as allowed under the recently issued IRS guidance in 2020.
Refer to Note S to the consolidated financial statements for additional information.
Income and Income Per Common Share from Continuing Operations (Attributable to Masco Corporation)
Income and diluted income per common share from continuing operations for 2020 were $810 million and $3.04 per common share, respectively. Income and diluted income per common share from continuing operations for 2019 were $639 million and $2.20 per common share, respectively. Income and diluted income per common share from continuing operations for 2018 were $636 million and $2.05 per common share, respectively.
27


Outlook for the Company

We continue to execute our strategies of leveraging our strong brand portfolio, industry-leading positions and the Masco Operating System, our methodology to drive growth and productivity, to create long-term shareholder value. We believe that our strong financial position and cash flow generation, together with our investments in our industry-leading branded building products, our continued focus on innovation and disciplined capital allocation, will allow us to drive long-term growth and create value for our shareholders. While we continue to remain uncertain regarding the short-term impact that the COVID-19 pandemic may have on our businesses, we remain confident in the fundamentals of our businesses and long-term strategy.


28


Business Segment and Geographic Area Results
The following table sets forth our net sales and operating profit information for our continuing operations by business segment and geographic area, dollars in millions.
 
Percent
Change
 2020201920182020 vs.
2019
2019 vs.
2018
Net Sales:     
Plumbing Products$4,136 $3,984 $3,998 %— %
Decorative Architectural Products3,052 2,723 2,656 12 %%
Total$7,188 $6,707 $6,654 %%
North America$5,805 $5,328 $5,208 %%
International, principally Europe1,383 1,379 1,446 — %(5)%
Total$7,188 $6,707 $6,654 %%

 202020192018
Operating Profit: (A)   
Plumbing Products$806 $708 $715 
Decorative Architectural Products583 480 456 
Total$1,389 $1,188 $1,171 
North America$1,167 $987 $954 
International, principally Europe222 201 217 
Total1,389 1,188 1,171 
General corporate expense, net(94)(100)(94)
Total operating profit$1,295 $1,088 $1,077 

(A)Before general corporate expense, net; refer to Note Q to the consolidated financial statements for additional information.
29


Business Segment Results Discussion
Changes in operating profit in the following Business Segment and Geographic Area Results discussion exclude general corporate expense, net, and compares each respective period to the same period of the immediately preceding year.
Description of changes to sales and operating profit between 2019 and 2018 for the Plumbing Products and Decorative Architectural Products segments, as well as geographic areas, were excluded as there were no changes from what was disclosed in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the December 31, 2019 Form 10-K.
Plumbing Products
Sales
Net sales in the Plumbing Products segment increased four percent in 2020 due primarily to higher sales volume of North American operations, which increased sales by three percent. Favorable foreign currency translation further increased sales by one percent.
Operating Results
Operating profit in the Plumbing Products segment in 2020 was positively impacted by cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact, higher sales volume and favorable net selling prices. These positive impacts were partially offset by increased commodity costs, including tariffs, and an increase in other expenses (such as salaries and legal costs).
Decorative Architectural Products
Sales
Net sales in the Decorative Architectural Products segment increased 12 percent in 2020, due mostly to higher sales volume of paints and other coating products, and to a lesser extent, builders' hardware products. Such increases were slightly offset by unfavorable net selling prices of paints and other coating products.
    Operating Results
Operating profit in the Decorative Architectural Products segment in 2020 benefited primarily from higher sales volume, as well as cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact, and decreased commodity costs. Additionally, operating profit was positively impacted by the non-recurrence of a 2019 non-cash impairment charge related to an other indefinite-lived intangible asset for a trademark associated with lighting products. These positive impacts were partially offset by unfavorable net selling prices, higher fixed expenses in our lighting business, and an increase in other expenses (such as salaries, legal costs and advertising).
    Business Rationalizations and Other Initiatives
Over the last several years, we have taken several actions focused on the strategic rationalization of our businesses including business consolidations, plant closures, headcount reductions and other cost savings initiatives. In 2020, 2019 and 2018, we incurred net pre-tax costs and charges related to these initiatives of $11 million, $13 million, and $9 million, respectively.
We continue to realize the benefits of our business rationalizations and continuous improvement initiatives across our enterprise and expect to identify additional opportunities to improve our business operations.
During 2020, 2019 and 2018, our Plumbing Products segment incurred costs and charges of $7 million, $13 million and $9 million, respectively and our Decorative Architectural Products segment incurred costs and charges of $4 million in 2020. The 2020 costs primarily related to business and plant consolidation and severance costs in North America.

30


Geographic Area Results Discussion

North America
Sales
North American net sales in 2020 increased nine percent. Higher sales volume of paints and other coating products, plumbing products, and to a lesser extent, builders' hardware, in aggregate, increased sales by 10 percent. Such increases were slightly offset by unfavorable net selling prices of paints and other coating products, which decreased sales by one percent.
Operating Results
Operating profit from North American operations in 2020 was positively affected by higher sales volume, cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact and favorable sales mix of plumbing products. Additionally, operating profit was positively impacted by the non-recurrence of a 2019 non-cash impairment charge related to an other indefinite-lived intangible asset for a trademark associated with lighting products. These positive impacts were partially offset by unfavorable net selling prices and increased commodity costs, primarily attributable to tariffs. Additionally, operating profit was adversely impacted by higher fixed expenses in our lighting business, and an increase in other expenses (such as salaries, legal costs and advertising).
International, Principally Europe
Sales
Net sales from International operations in 2020 were flat. In local currencies (including sales in foreign currencies outside their respective functional currencies), net sales decreased one percent due to unfavorable sales mix of plumbing products that was partially offset by favorable net selling prices of plumbing products.
Operating Results
Operating profit from International operations in 2020 was positively impacted by cost savings initiatives, including actions taken to mitigate the COVID-19 pandemic impact, and favorable net selling prices. These positive impacts were partially offset by unfavorable sales mix.

31


Other Matters

Commitments and Contingencies

Litigation
Information regarding our legal proceedings is set forth in Note U to the consolidated financial statements, which is incorporated herein by reference.
Other Commitments
We enter into contracts, which include reasonable and customary indemnifications that are standard for the industries in which we operate. Such indemnifications include claims made against builders by homeowners for issues relating to our products and workmanship. In conjunction with divestitures and other transactions, we occasionally provide reasonable and customary indemnifications. We have never had to pay a material amount related to these indemnifications, and we evaluate the probability that amounts may be incurred and record an estimated liability when probable and reasonably estimable.
Recently Adopted and Issued Accounting Pronouncements

Refer to Note A to the consolidated financial statements for discussion of recently adopted and issued accounting pronouncements, which is incorporated herein by reference.
    
32


Contractual Obligations
The following table provides payment obligations related to current contracts at December 31, 2020, in millions:
 Payments Due by Period
 20212022-20232024-2025Beyond
2025
OtherTotal
Debt (A)
$$337 $506 $1,948 $— $2,794 
Interest (A)
130 231 209 614 — 1,184 
Operating leases46 64 36 89 — 235 
Currently payable income taxes16 — — — — 16 
Private equity funds (B)
— — — — 
Purchase commitments (C)
307 — — — — 307 
Uncertain tax positions, including interest and penalties (D)
— — — — 84 84 
Total$502 $632 $751 $2,651 $88 $4,624 
______________________________
(A)We assume that all debt would be held to maturity. Amounts include finance lease obligations.
(B)There is no schedule for the capital commitments to the private equity funds; accordingly, we are unable to make a reasonable estimate as to when capital commitments may be paid.
(C)Excludes contracts that do not require volume commitments and open or pending purchase orders.
(D)Due to the high degree of uncertainty regarding the timing of future cash outflows associated with uncertain tax positions, we are unable to make a reasonable estimate for the year in which cash settlements may occur with applicable tax authorities.
Refer to Note N to the consolidated financial statements for defined-benefit pension plan obligations.
33


Item 7A.    Quantitative and Qualitative Disclosures about Market Risk.
We have considered the provisions of accounting guidance regarding disclosure of accounting policies for derivative financial instruments and disclosure of quantitative and qualitative information about market risk inherent in derivative financial instruments and other financial instruments.
We are exposed to the impact of changes in interest rates and foreign currency exchange rates, particularly changes between the U.S. dollar and the European euro, British pound, Canadian dollar, and Chinese renminbi, and to market price fluctuations related to our financial investments. We have insignificant involvement with derivative financial instruments and use such instruments to the extent necessary to manage exposure to foreign currency fluctuations.
At December 31, 2020, we performed sensitivity analyses to assess the potential loss in the fair values of market risk sensitive instruments resulting from a hypothetical change of 10 percent in foreign currency exchange rates, a 10 percent decline in the market value of our long-term investments, or a 100 basis point change in interest rates. Based upon the analyses performed, such changes would not be expected to materially affect our consolidated financial position, results of operations or cash flows.
34


Item 8.Financial Statements and Supplementary Data.

Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
We assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control – Integrated Framework (2013). Based on this assessment, we have determined that our internal control over financial reporting was effective as of December 31, 2020.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2020, as stated in their report, which is presented herein. Their report expressed an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2020 and expressed an unqualified opinion on our 2020 consolidated financial statements. This report appears under 'Item 8. Financial Statements and Supplementary Data' under the heading "Report of Independent Registered Public Accounting Firm."
35


Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Masco Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Masco Corporation and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
36


assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessments

As described in Notes A and H to the consolidated financial statements, the Company’s consolidated goodwill balance was $563 million as of December 31, 2020. Management performs an annual impairment test of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would indicate the carrying value of goodwill may be impaired. Potential impairment is identified by comparing the fair value of a reporting unit to its carrying value, including goodwill. Management estimates fair value by using a discounted cash flow model. The determination of fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasted sales and operating profits, and the discount rate.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments is a critical audit matter are (i) the significant judgment by management when developing the fair value measurements of the reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s discounted cash flow model, including significant assumptions related to forecasted sales and the discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Company’s reporting units. These procedures also included, among others, testing management’s process for developing the fair value estimates; evaluating the appropriateness of the discounted cash flow model; testing the completeness, accuracy, and relevance of underlying data used in the model; and, evaluating the significant assumptions used by management, including forecasted sales and the discount rates. Professionals with specialized skill and knowledge were used to assist in evaluating the Company’s discount rate assumptions. Evaluating management’s assumption related to forecasted sales involved evaluating whether the assumptions used were reasonable considering (i) the current and past performance of the reporting units, (ii) the consistency with external market and industry data as relates to forecasted sales, and (iii) whether they were consistent with evidence obtained in other areas of the audit.


/s/ PricewaterhouseCoopers LLP

Detroit, Michigan
February 9, 2021
We have served as the Company’s auditor since 1959.


37


Financial Statements and Supplementary Data

MASCO CORPORATION and Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2019
(In Millions, Except Share Data)
 20202019
ASSETS  
Current Assets:  
Cash and cash investments$1,326 $697 
Receivables1,138 997 
Inventories876 754 
Prepaid expenses and other149 90 
Assets held for sale 173 
Total current assets3,489 2,711 
Property and equipment, net908 878 
Goodwill563 509 
Other intangible assets, net357 259 
Operating lease right-of-use assets166 176 
Other assets294 139 
Assets held for sale 355 
Total assets$5,777 $5,027 
LIABILITIES
Current Liabilities:
Accounts payable$893 $697 
Notes payable3 2 
Accrued liabilities1,038 700 
Liabilities held for sale 149 
Total current liabilities1,934 1,548 
Long-term debt2,792 2,771 
Noncurrent operating lease liabilities149 162 
Other liabilities481 589 
Liabilities held for sale 13 
Total liabilities5,356 5,083 
Commitments and contingencies (Note U)
EQUITY
Masco Corporation's shareholders' equity:
 Common shares, par value $1 per share
    Authorized shares: 1,400,000,000;
    Issued and outstanding: 2020 – 258,200,000; 2019 – 275,600,000
258 276 
  Preferred shares authorized: 1,000,000;
    Issued and outstanding: 2020 and 2019 – None
  
  Paid-in capital  
  Retained earnings (deficit)79 (332)
  Accumulated other comprehensive loss(142)(179)
Total Masco Corporation's shareholders' equity (deficit)195 (235)
  Noncontrolling interest226 179 
Total equity421 (56)
Total liabilities and equity$5,777 $5,027 

See notes to consolidated financial statements.
38


MASCO CORPORATION and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2020, 2019 and 2018
(In Millions, Except Per Common Share Data)
 202020192018
Net sales$7,188 $6,707 $6,654 
Cost of sales4,601 4,336 4,327 
Gross profit2,587 2,371 2,327 
Selling, general and administrative expenses1,292 1,274 1,250 
Impairment charge for other intangible assets 9  
Operating profit1,295 1,088 1,077 
Other income (expense), net:   
Interest expense(144)(159)(156)
Other, net(20)(15)(14)
(164)(174)(170)
Income from continuing operations before income taxes1,131 914 907 
Income tax expense269 230 221 
Income from continuing operations862 684 686 
Income from discontinued operations, net414 296 98 
Net income1,276 980 784 
Less: Net income attributable to noncontrolling interest52 45 50 
Net income attributable to Masco Corporation$1,224 $935 $734 
Income per common share attributable to Masco Corporation:  
Basic:   
Income from continuing operations$3.05 $2.21 $2.06 
Income from discontinued operations, net1.55 1.03 0.32 
Net income$4.60 $3.24 $2.38 
Diluted:   
Income from continuing operations$3.04 $2.20 $2.05 
Income from discontinued operations, net1.55 1.02 0.32 
Net income$4.59 $3.22 $2.37 
Amounts attributable to Masco Corporation:   
Income from continuing operations$810 $639 $636 
Income from discontinued operations, net414 296 98 
Net income$1,224 $935 $734 
   






See notes to consolidated financial statements.
39


MASCO CORPORATION and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2020, 2019 and 2018
(In Millions)
 202020192018
Net income$1,276 $980 $784 
Less: Net income attributable to noncontrolling interest52 45 50 
Net income attributable to Masco Corporation$1,224 $935 $734 
Other comprehensive income (loss), net of tax (Note P):   
Cumulative translation adjustment$72 $6 $(31)
Interest rate swaps1 2 2 
Pension and other post-retirement benefits(18)(64)9 
Other comprehensive income (loss), net of tax55 (56)(20)
Less: Other comprehensive income (loss) attributable to the noncontrolling interest:   
Cumulative translation adjustment$20 $(1)$(15)
Pension and other post-retirement benefits(2)(3)(2)
18 (4)(17)
Other comprehensive income (loss) attributable to Masco Corporation$37 $(52)$(3)
Total comprehensive income$1,331 $924 $764 
Less: Total comprehensive income attributable to noncontrolling interest          
70 41 33 
Total comprehensive income attributable to Masco Corporation$1,261 $883 $731 
   





























See notes to consolidated financial statements.
40


MASCO CORPORATION and Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2020, 2019 and 2018
(In Millions)
 202020192018
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:   
Net income$1,276 $980 $784 
Depreciation and amortization133 159 156 
Display amortization2 12 21 
Deferred income taxes(3)(41)4 
Employee withholding taxes paid on stock-based compensation25 23 42 
Gain on disposition of investments, net(3)(1)(4)
Gain on disposition of businesses, net(602)(298) 
Pension and other post-retirement benefits(32)(45)(47)
Impairment of goodwill and other intangible assets 16  
Stock-based compensation45 35 27 
Dividends paid-in-kind(10)  
Increase in receivables(141)(37)(46)