MASCO CORP /DE/

Previous wording

Due to changing market conditions, we are experiencing, and may continue to experience, lower market demand for our products. We have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. Additionally, we expect the recently-enacted and announced tariffs, particularly those related to China, to result in significantly higher costs to us, principally in our Plumbing Products segment. We seek to mitigate the impact of higher tariffs and other unfavorable impact to our costs over time with pricing, cost savings initiatives, sourcing changes, and other activities. Consumer demand for our products, however, could further diminish if consumer confidence erodes and the price of our products and other consumer goods increases.

Current wording

Due to changing market conditions, we are experiencing, and may continue to experience, lower market demand for our products. We have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. Additionally, we have been experiencing, and may continue to experience, significantly higher costs to us, principally in our Plumbing Products segment, due to the recently announced and enacted tariffs, particularly those related to China. We seek to mitigate the impact of higher tariffs and other unfavorable impact to our costs over time with pricing, cost savings initiatives, sourcing changes, and other activities. Consumer demand for our products, however, could further diminish if consumer confidence erodes and the price of our products and other consumer goods increases.

Previous wording

SECOND QUARTER 2025 AND THE FIRST SIX MONTHS 2025 VERSUS

Current wording

THIRD QUARTER 2025 AND THE FIRST NINE MONTHS 2025 VERSUS

Previous wording

SECOND QUARTER 2024 AND THE FIRST SIX MONTHS 2024

Current wording

THIRD QUARTER 2024 AND THE FIRST NINE MONTHS 2024

Previous wording

The following discussion of consolidated results of operations refers to the three and six months ended June 30, 2025 compared to the same periods of 2024.

Current wording

The following discussion of consolidated results of operations refers to the three and nine months ended September 30, 2025 compared to the same periods of 2024.

Previous wording

Below is a summary of our net sales, in millions, for the three and six months ended June 30, 2025 and 2024:

Current wording

Below is a summary of our net sales, in millions, for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Our net sales for the three months ended June 30, 2025 were $2,051 million, which decreased two percent compared to the three months ended June 30, 2024. Excluding divestitures and the effect of currency translation, net sales were flat primarily due to higher net selling prices of plumbing products which increased sales by two percent, partially offset by lower sales volume of paints and other coating products which decreased sales by one percent.

Current wording

Our net sales for the three months ended September 30, 2025 were $1,917 million, which decreased three percent compared to the three months ended September 30, 2024. Excluding divestitures and the effect of currency translation, net sales decreased two percent primarily due to lower sales volume across the entire company which decreased sales by four percent, partially offset by higher net selling prices of plumbing products which increased sales by two percent.

Previous wording

Our net sales for the six months ended June 30, 2025 were $3,852 million, which decreased four percent compared to the six months ended June 30, 2024. Excluding divestitures and the effect of currency translation, net sales decreased one percent. Our net sales for six months ended June 30, 2025 decreased primarily due to lower sales volume of paints and other coating products which decreased sales by two percent, partially offset by higher net selling prices of plumbing products which increased sales by one percent.

Current wording

Our net sales for the nine months ended September 30, 2025 were $5,769 million, which decreased four percent compared to the nine months ended September 30, 2024. Excluding divestitures and the effect of currency translation, net sales decreased one percent primarily due to lower sales volume across the entire company which decreased sales by three percent, partially offset by higher net selling prices of plumbing products which increased sales by two percent.

Previous wording

Below is a summary of our results of operations for the three and six months ended June 30, 2025 and 2024:

Current wording

Below is a summary of our results of operations for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Our gross profit for the three months ended June 30, 2025 was $772 million, which decreased two percent, and was primarily impacted by higher commodity and tariff costs, three percent due to the divestiture of our Kichler Lighting ("Kichler") business, as well as an increase in other expenses, partially offset by five percent due to higher net selling prices of plumbing products, as well as cost savings initiatives.

Current wording

Our gross profit for the three months ended September 30, 2025 was $656 million, which decreased 10 percent, and was negatively impacted by higher commodity and tariff costs, four percent due to lower sales volume, an increase in other expenses (including inventory-related reserves), and two percent due to the divestiture of our Kichler Lighting ("Kichler") business. These amounts were partially offset by seven percent due to higher net selling prices, as well as cost savings initiatives.

Previous wording

Our selling, general and administrative expenses for the six months ended June 30, 2025 were $719 million, which decreased five percent, and were impacted by the divestiture of Kichler.

Current wording

Our selling, general and administrative expenses for the three months ended September 30, 2025 were $353 million, which decreased four percent, and were positively impacted by four percent due to the divestiture of Kichler and two percent due to lower marketing costs, partially offset by one percent due to unfavorable foreign currency translation.

Previous wording

Our operating profit for the three months ended June 30, 2025 was $412 million, which increased four percent, and was impacted by lower selling, general and administrative expenses, partially offset by decreased gross profit.

Current wording

Our operating profit for the three months ended September 30, 2025 was $303 million, which decreased 15 percent, and was negatively impacted by decreased gross profit, partially offset by lower selling, general and administrative expenses.

Previous wording

Our gross profit for the six months ended June 30, 2025 was $1,416 million, which decreased four percent, and was primarily impacted by higher commodity and tariff costs, three percent due to the divestiture of Kichler, two percent due to lower sales volume, as well as an increase in other expenses, partially offset by four percent due to higher net selling prices of plumbing products, as well as cost saving initiatives.

Current wording

Our gross profit for the nine months ended September 30, 2025 was $2,073 million, which decreased six percent, and was negatively impacted by higher commodity and tariff costs and three percent each due to lower sales volume and the divestiture of Kichler, as well as an increase in other expenses (including inventory-related reserves). These amounts were partially offset by five percent due to higher net selling prices of plumbing products, as well as cost savings initiatives.

Previous wording

Our selling, general and administrative expenses for the three months ended June 30, 2025 were $361 million, which decreased seven percent, and were impacted by four percent due to the divestiture of Kichler and two percent due to lower employee-related costs.

Current wording

Our selling, general and administrative expenses for the nine months ended September 30, 2025 were $1,072 million, which decreased five percent, and were positively impacted by four percent due to the divestiture of Kichler and one percent due to lower employee-related costs.

Previous wording

Our operating profit for the six months ended June 30, 2025 was $698 million, which decreased two percent, and was impacted by decreased gross profit, partially offset by lower selling, general and administrative expenses.

Current wording

Our operating profit for the nine months ended September 30, 2025 was $1,001 million, which decreased seven percent, and was negatively impacted by decreased gross profit, partially offset by lower selling, general and administrative expenses.

Previous wording

Below is a summary of our other income (expense), net, in millions, for the three and six months ended June 30, 2025 and 2024:

Current wording

Below is a summary of our other income (expense), net, in millions, for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Below is a summary of our income tax expense, in millions, and our effective tax rate for the three and six months ended June 30, 2025 and 2024:

Current wording

Below is a summary of our income tax expense, in millions, and our effective tax rate for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Below is a summary of our net income, in millions, and diluted income per common share for the three and six months ended June 30, 2025 and 2024:

Current wording

Below is a summary of our net income, in millions, and diluted income per common share for the three and nine months ended September 30, 2025 and 2024:

Previous wording

The following discussion of business segment results refers to the three and six months ended June 30, 2025 compared to the same periods of 2024. Changes in operating profit in the following business segment results discussion exclude general corporate expense, net.

Current wording

The following discussion of business segment results refers to the three and nine months ended September 30, 2025 compared to the same periods of 2024. Changes in operating profit in the following business segment results discussion exclude general corporate expense, net.

Previous wording

Net sales in the Plumbing Products segment increased five percent and two percent for the three and six months ended June 30, 2025, respectively. In local currencies (including sales in currencies outside their respective functional currencies), net sales increased four percent and two percent for the three and six months ended June 30, 2025, respectively. For the three months and six months ended June 30, 2025, higher net selling prices increased sales by three percent and two percent, respectively.

Current wording

Net sales in the Plumbing Products segment increased two percent for both the three and nine months ended September 30, 2025. In local currencies (including sales in currencies outside their respective functional currencies), net sales increased one percent and two percent for the three and nine months ended September 30, 2025, respectively. For the three months ended September 30, 2025, net sales increased three percent due to higher net selling prices, partially offset by three percent due to lower sales volume. For the nine months ended September 30, 2025, net sales increased three percent due to higher net selling prices, partially offset by one percent due to lower sales volume.

Previous wording

Operating profit in the Plumbing Products segment for the three and six months ended June 30, 2025 was positively impacted by higher net selling prices and cost savings initiatives. For the three months ended June 30, 2025, these amounts were partially offset by higher commodity and tariff costs and an increase in other expenses. For the six months ended June 30, 2025, these amounts were partially offset by higher commodity and tariff costs, higher marketing costs, unfavorable sales mix, and an increase in other expenses.

Current wording

Operating profit in the Plumbing Products segment for the three and nine months ended September 30, 2025 was negatively impacted by higher commodity and tariff costs, an increase in other expenses (including inventory-related reserves), and lower sales volume, partially offset by higher net selling prices and cost savings initiatives. For the nine months ended September 30, 2025, operating profit was also negatively impacted by unfavorable sales mix and higher marketing costs.

Previous wording

Net sales in the Decorative Architectural Products segment decreased 12 percent and 14 percent for the three and six months ended June 30, 2025, respectively. The divestiture of our Kichler business decreased sales by eight percent for both periods and lower sales volume decreased sales by four percent and five percent for the three and six months ended June 30, 2025, respectively.

Current wording

Net sales in the Decorative Architectural Products segment decreased 12 percent and 13 percent for the three and nine months ended September 30, 2025, respectively. For the three months ended September 30, 2025, net sales decreased seven percent due to the divestiture of Kichler and seven percent due to lower sales volume, partially offset by one percent due to higher net selling prices. For the nine months ended September 30, 2025, net sales decreased eight percent due to the divestiture of Kichler and six percent due to lower sales volume.

Previous wording

Operating profit in the Decorative Architectural Products segment for the three and six months ended June 30, 2025 was negatively impacted by lower sales volume and higher commodity costs, partially offset by cost saving initiatives.

Current wording

Operating profit in the Decorative Architectural Products segment for the three and nine months ended September 30, 2025 was negatively impacted by lower sales volume and higher commodity and tariff costs, partially offset by cost savings initiatives. For the three months ended September 30, 2025, negative impacts to operating profit were also partially offset by higher net selling prices.

Previous wording

We had cash and cash investments of approximately $390 million and $634 million at June 30, 2025 and December 31, 2024, respectively. 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 cash and cash investments we held at June 30, 2025 and December 31, 2024, $276 million and $321 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.

Current wording

We had cash and cash investments of approximately $559 million and $634 million at September 30, 2025 and December 31, 2024, respectively. 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 cash and cash investments we held at September 30, 2025 and December 31, 2024, $303 million and $321 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.

Previous wording

The 2022 Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0. We were in compliance with all covenants and $46 million was borrowed and outstanding at a weighted average interest rate of 5.551% at June 30, 2025. Subsequent to June 30, 2025, the entire borrowing was repaid.

Current wording

The 2022 Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0. We were in compliance with all covenants and no borrowings were outstanding at September 30, 2025.

Previous wording

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. The amounts confirmed as valid under the program and included in accounts payable were $44 million and $36 million at June 30, 2025 and December 31, 2024, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $26 million and $23 million at June 30, 2025 and December 31, 2024, respectively. All payments made under the program are recorded as a decrease in accounts payable and accrued liabilities, net, in our condensed consolidated statements of cash flows. 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.

Current wording

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. The amounts confirmed as valid under the program and included in accounts payable were $32 million and $36 million at September 30, 2025 and December 31, 2024, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $22 million and $23 million at September 30, 2025 and December 31, 2024, respectively. All payments made under the program are recorded as a decrease in accounts payable and accrued liabilities, net, in our condensed consolidated statements of cash flows. 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.

Previous wording

Effective October 20, 2022, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock, exclusive of excise tax, in open-market transactions or otherwise. During the six months ended June 30, 2025, we repurchased and retired approximately 3.4 million shares of our common stock (including 0.3 million shares to offset the dilutive impact of restricted stock units granted in the six months ended June 30, 2025) for approximately $233 million, inclusive of excise tax of $2 million. At June 30, 2025, we had approximately $666 million remaining under the 2022 authorization. Consistent with our past practice and as part of our long-term capital allocation strategy, outside of any potential acquisitions, we anticipate using at least $450 million of cash for share repurchases in 2025.

Current wording

Effective October 20, 2022, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock, exclusive of excise tax, in open-market transactions or otherwise. During the nine months ended September 30, 2025, we repurchased and retired approximately 5.1 million shares of our common stock (including 0.3 million shares to offset the dilutive impact of restricted stock units granted in the nine months ended September 30, 2025) for approximately $357 million, inclusive of excise tax of $3 million. At September 30, 2025, we had approximately $542 million remaining under the 2022 authorization. Consistent with our past practice and as part of our long-term capital allocation strategy, outside of any potential acquisitions, we anticipate using approximately $500 million of cash for share repurchases in 2025.

Previous wording

For the six months ended June 30, 2025, net cash provided by operations was $148 million, primarily driven by operating profit, partially offset by changes in working capital.

Current wording

For the nine months ended September 30, 2025, net cash provided by operations was $604 million, primarily driven by operating profit and the change in deferred taxes as a result of the cash tax benefit associated with immediate expensing of qualified fixed assets and research and development expenditures from the enactment of the One Big Beautiful Bill Act, partially offset by changes in working capital.

Previous wording

For the six months ended June 30, 2025, net cash used for financing activities was $344 million, primarily due to $231 million for the repurchase and retirement of our common stock, $132 million for the payment of cash dividends, and $15 million for dividends paid to noncontrolling interest, partially offset by $46 million of net proceeds from revolving credit loan borrowings.

Current wording

For the nine months ended September 30, 2025, net cash used for financing activities was $592 million, primarily due to $354 million for the repurchase and retirement of our common stock, $197 million for the payment of cash dividends, and $30 million for dividends paid to noncontrolling interest.

Previous wording

For the six months ended June 30, 2025, net cash used for investing activities was $70 million, primarily driven by $68 million of capital expenditures.

Current wording

For the nine months ended September 30, 2025, net cash used for investing activities was $111 million, primarily driven by $109 million of capital expenditures.

Previous wording

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, to develop innovative products and respond to changing consumer purchasing practices and preferences, our ability to maintain our public image and reputation, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of materials, our dependence on suppliers and service providers, extreme weather events and changes in climate, risks associated with our international operations and global strategies, the impact on demand, pricing and product costs resulting from tariffs, 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 acquired and may in the future acquire, our ability to attract, develop and retain a talented and diverse workforce, risks associated with cybersecurity vulnerabilities, threats and attacks and risks associated with our reliance on information systems and technology.

Current wording

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, to develop innovative products and respond to changing consumer purchasing practices and preferences, our ability to maintain our public image and reputation, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of materials, our dependence on suppliers and service providers, extreme weather events and changes in climate, risks associated with our international operations and global strategies, the impact on demand, pricing and product costs resulting from tariffs, 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 acquired and may in the future acquire, our ability to attract, develop and retain a talented workforce, risks associated with cybersecurity vulnerabilities, threats and attacks and risks associated with our reliance on information systems and technology.