MASCO CORP /DE/ - Annual Report: 2024 (Form 10-K)

Proceeds from short-term borrowings— 77 Payment of short-term borrowings— (77)Payment of term loan— (200)Proceeds from the exercise of stock options79 38 Employee withholding taxes paid on stock-based compensation(35)(29)Payment of debt(3)(5)Capital expenditures(168)(243)

Acquisition of businesses, net of cash acquired

(4)(136)Proceeds from disposition of business, net of cash disposed126 — Effect of exchange rate changes on cash and cash investments(9)6 Other, net(4)(4)Cash (decrease) increase$(1)$182

Our working capital days were as follows:


	At December 31,
	2024		2023
Receivable days	51		52
Inventory days	72		77
Accounts payable days	70		70
Working capital (receivables plus inventories, less accounts payable) as a percentage of net sales	15.1	%	16.0	%

Operating Activities

Net cash provided by operations was $1,075 million, primarily driven by operating profit, partially offset by changes in working capital.

Financing Activities

Net cash used for financing activities was $1,017 million, primarily due to $751 million for the repurchase and retirement of our common stock, $254 million for the payment of cash dividends, $37 million for dividends paid to noncontrolling interest, $35 million for employee withholding taxes paid on stock-based compensation, and $15 million for the purchase of the remaining equity interest in Easy Sanitary Solutions B.V. These uses of cash were partially offset by $79 million of proceeds from the exercise of stock options.

Investing Activities

Net cash used for investing activities was $50 million, primarily driven by $168 million of capital expenditures, partially offset by $126 million of proceeds from the sale of Kichler.

Commitments and Contingencies

Litigation

Information regarding our legal proceedings is set forth in Note R 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 not paid 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.

Contractual Obligations

The following table provides payment obligations related to current contracts at December 31, 2024, in millions:


	Payments Due by Period
	2025		2026-2027		2028-2029		Beyond 2029		Other		Total
Debt (A)	$	3	$	304	$	839	$	1,806	$	—	$	2,952
Interest (A)	98		193		158		580		—		1,028
Operating leases	55		88		57		142		—		341
Currently payable income taxes	28		—		—		—		—		28
Purchase commitments (B)	363		100		41		—		—		505
Uncertain tax positions, including interest and penalties (C)	—		—		—		—		97		97
Total	$	546	$	685	$	1,095	$	2,527	$	97	$	4,950

______________________________

(A)We assume that all debt would be held to maturity. Amounts include finance lease obligations.

(B)Includes purchase commitments for vendor contracts and contracts for the purchase of renewable energy credits and transferable tax credits. Excludes contracts that do not require volume commitments and open or pending purchase orders.

(C)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 M to the consolidated financial statements for defined-benefit pension plan obligations.

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 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 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

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.

Goodwill and Other Intangible Assets

We record the excess of purchase price 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.

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 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. and Eurozone Gross Domestic Product growing at approximately 1.8 percent and 1.4 percent, respectively, in 2025, and 2.0 percent and 1.4 percent, respectively, per annum over the remainder of the five-year forecast.

We utilize our weighted average cost of capital of approximately 8.50 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2024, 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 10.50 percent to 12.50 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 2024, 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 not have resulted in any goodwill impairment.

We utilize our weighted average cost of capital of approximately 8.50 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2024, based upon our assessment of the risks impacting each of our businesses and the nature of the other indefinite-lived intangible assets (i.e., trade name), we applied a risk premium to increase the discount rate to a range of 11.50 percent to 13.50 percent for our other indefinite-lived intangible assets.

If the carrying amount of an other indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized to the extent that an other indefinite-lived intangible asset's recorded carrying value exceeds its fair value, not to exceed the carrying amount of the other indefinite-lived intangible asset.

In the fourth quarter of 2024, we estimated that the future discounted cash flows projected for all of 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 $1 million impairment of one of our other indefinite-lived intangible assets.

Refer to Note H for additional information.

Income Taxes

We record deferred taxes on the future tax consequences of differences between the financial statement carrying value of our assets and liabilities and their respective tax basis. The realization of deferred tax assets depends on sufficient sources of 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 and projected future taxable income.

If, based upon all available evidence, both positive and negative, it is more likely than not such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to evidence that is objectively verifiable such as cumulative losses in recent years, however, some evidence may be based on estimates and assumptions regarding potential sources of future taxable income. Changes in these estimates and assumptions may result in a change in judgment regarding the realizability of deferred tax assets.

Refer to Note P for additional information.

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.

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 foreign currency exchange rates, market price fluctuations related to our financial investments, and changes in interest rates. 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, 2024, 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.

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, 2024 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, 2024.

(PCAOB ID ), an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2024, 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, 2024 and expressed an unqualified opinion on our 2024 consolidated financial statements. This report is included herein under the heading "Report of Independent Registered Public Accounting Firm."

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, 2024 and 2023, 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, 2024, 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, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 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, 2024, 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 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 $597 million as of December 31, 2024. Management performs an annual impairment test of goodwill 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. Management compares the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. 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 carrying value exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit. Management determines fair value using a discounted cash flow method, which requires management to make significant estimates and assumptions related to forecasted sales and operating profits, long-term assumed annual growth rate, 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 estimate of the reporting units and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to forecasted sales for certain reporting units.

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 reporting units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the discounted cash flow method; (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow method; and (iv) evaluating the reasonableness of the significant assumption used by management related to forecasted sales for certain reporting units. Evaluating management’s assumption related to forecasted sales for certain reporting units involved evaluating whether the assumption used was reasonable considering (i) the current and past performance of certain reporting units; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

February 11, 2025

We have served as the Company’s auditor since 1959.

Financial Statements and Supplementary Data

MASCO CORPORATION and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2024 and 2023

(In Millions, Except Share Data)


	2024	2023
ASSETS
Current assets:
Cash and cash investments	$	$
Receivables
Inventories
Prepaid expenses and other
Total current assets
Property and equipment, net
Goodwill
Other intangible assets, net
Operating lease right-of-use assets
Other assets
Total assets	$	$

LIABILITIES
Current liabilities:
Accounts payable	$	$
Notes payable
Accrued liabilities
Total current liabilities
Long-term debt
Noncurrent operating lease liabilities
Other liabilities
Total liabilities	$	$

Commitments and contingencies (Note R)
Redeemable noncontrolling interest

EQUITY
Masco Corporation's shareholders' equity:
Common shares, par value $ per share Authorized shares: ; Issued and outstanding: 2024 – ; 2023 –
Preferred shares authorized: ; Issued and outstanding: 2024 and 2023 –
Paid-in capital
Retained deficit	()	()
Accumulated other comprehensive income
Total Masco Corporation's shareholders' deficit	()	()
Noncontrolling interest
Total equity	()
Total liabilities and equity	$	$

See notes to consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2024, 2023 and 2022

(In Millions, Except Per Common Share Data)


	2024	2023	2022
Net sales	$	$	$
Cost of sales
Gross profit
Selling, general and administrative expenses

Impairment charges for goodwill and other intangible assets
Operating profit
Other income (expense), net:
Interest expense	()	()	()
Other, net	()	()
	()	()	()
Income before income taxes
Income tax expense
Net income


Less: Net income attributable to noncontrolling interest
Net income attributable to Masco Corporation	$	$	$

Income per common share attributable to Masco Corporation:
Basic:


Net income	$	$	$
Diluted:


Net income	$	$	$

See notes to consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2024, 2023 and 2022

(In Millions)


	2024		2023	2022
Net income	$		$	$
Less: Net income attributable to noncontrolling interest
Net income attributable to Masco Corporation	$		$	$
Other comprehensive (loss) income, net of tax
Currency translation adjustment	$	()	$	$	()

Pension and other post-retirement benefits			()

Other comprehensive (loss) income, net of tax	()			()
Less: Other comprehensive (loss) income attributable to noncontrolling interest:
Currency translation adjustment	$	()	$	$	()
Pension and other post-retirement benefits			()
	()
Other comprehensive (loss) income attributable to Masco Corporation	$	()	$	$	()
Total comprehensive income	$		$	$
Less: Total comprehensive income attributable to noncontrolling interest
Total comprehensive income attributable to Masco Corporation	$		$	$

See notes to consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2024, 2023 and 2022

(In Millions)


	2024	2023	2022
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Net income	$	$	$
Depreciation and amortization
Fair value adjustment to contingent earnout obligation			()

Deferred income taxes		()	()
Employee withholding taxes paid on stock-based compensation

Loss on disposition of businesses, net
Pension and other post-retirement benefits	()	()	()

Impairment of goodwill and other intangible assets
Stock-based compensation

(Increase) decrease in receivables	()		()
Decrease (increase) in inventories			()
Decrease in accounts payable and accrued liabilities, net	()	()	()

Other, net
Net cash from operating activities

CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:

Purchase of Company common stock	()	()	()
Excise tax paid on the purchase of Company common stock	()
Cash dividends paid	()	()	()
Purchase of redeemable noncontrolling interest	()
Dividends paid to noncontrolling interest	()	()	()


Proceeds from short-term borrowings
Payment of short-term borrowings		()
Proceeds from term loan
Payment of term loan		()	()

Proceeds from the exercise of stock options
Employee withholding taxes paid on stock-based compensation	()	()	()

Payment of debt	()	()	()


Net cash for financing activities	()	()	()

CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
Capital expenditures	()	()	()
Acquisition of businesses, net of cash acquired	()	()

Proceeds from disposition of business, net of cash disposed






Other, net	()	()	()
Net cash for investing activities	()	()	()

Effect of exchange rate changes on cash and cash investments	()		()

CASH AND CASH INVESTMENTS:
(Decrease) increase for the year	()		()
At January 1
At December 31	$	$	$

See notes to consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the Years Ended December 31, 2024, 2023 and 2022

(In Millions, Except Per Common Share Data)

Total

Common

($ par value)

Paid-In
Capital

Retained (Deficit) Earnings

Accumulated Other Comprehensive Income (Loss)

Noncontrolling
Interest

Balance, January 1, 2022

()

Total comprehensive income (loss)

—

()

Shares issued

—

Shares retired:

Repurchased

()

—

Surrendered (non-cash)

()

—

()

—

Cash dividends declared

()

—

()

—

Dividends declared to noncontrolling interest

()

—

()

Redeemable noncontrolling interest - redemption adjustment

—

Stock-based compensation

—

Balance, December 31, 2022

()

Total comprehensive income

—

Shares issued

—

Shares retired:

Repurchased

()

—

Surrendered (non-cash)

()

—

()

—

Cash dividends declared

()

—

()

—

Dividends declared to noncontrolling interest

()

—

()

Stock-based compensation

—

Balance, December 31, 2023

()

Total comprehensive income (loss)

—

()

Shares issued

—

Shares retired:

Repurchased

()

—

Surrendered (non-cash)

()

—

()

—

Cash dividends declared

()

—

()

—

Dividends declared to noncontrolling interest

()

—

()

Redemption of redeemable noncontrolling interest

—

Stock-based compensation

—

Balance, December 31, 2024

()

See notes to consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to days.

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.

Certain product sales include a right of return. We estimate future product returns at the time of sale based on historical experience and record a corresponding refund liability. We additionally record an asset, based on historical experience, for the amount of product we expect to return to inventory as a result of the return, which is recorded in prepaid expenses and other in the consolidated balance sheets.

We consider shipping and handling activities performed by us as activities to fulfill the sales of our products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales. We capitalize incremental costs of obtaining a contract and expense the costs on a straight-line basis over the contractual period if the cost is recoverable, the cost would not have been incurred without the contract and the term of the contract is greater than one year; otherwise, we expense the amounts as incurred. We do not adjust the promised amount of consideration for the effects of a financing component if the period between when we transfer our products or services and when our customers pay for our products or services is expected to be one year or less.

; related amortization expense is classified as a selling expense in the consolidated statements of operations.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

million and $ million at December 31, 2024 and 2023, respectively. Our receivables balances are generally due in less than one year.

to years, computer hardware and software, three to , and machinery and equipment, three to years. Depreciation expense was $ million in 2024, $ million in 2023 and $ million in 2022.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

percent long-term assumed annual growth rate of cash flows for periods after the forecast. For 2024, we utilized a weighted average cost of capital of approximately percent as the basis to determine the discount rate to apply to the estimated future cash flows. 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 percent to 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 carrying value exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.

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 percent as the basis to determine the discount rate to apply to the estimated future cash flows. In 2024, based upon our assessment of the risks impacting each of our businesses and the nature of the other indefinite-lived intangible asset (i.e., trade name), we applied a risk premium to increase the discount rate to a range of percent to percent for our other indefinite-lived intangible assets.

While we believe that the estimates and assumptions underlying the valuation methodologies are reasonable, different estimates and assumptions could result in different outcomes.

Refer to Note H for additional information regarding goodwill and other intangible assets.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Refer to Note B for additional information regarding acquisitions.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

years of continuous service for newly issued RSUs, stock options, phantom stock awards and SARs. Compensation expense for equity awards granted in 2020 and thereafter is recognized ratably over the shorter of the vesting period, typically , or the length of time until the grantee becomes retirement eligible. For grants prior to 2020, expense was recognized ratably over the shorter of the vesting period of the long-term stock awards, stock options and phantom stock awards, typically , or the length of time until the grantee became retirement-eligible, generally at age 65. Expense for PRSUs is recognized ratably over the vesting period of the units.

Refer to Note L for additional information on stock-based compensation.

percent of Hansgrohe SE at both December 31, 2024 and 2023. The aggregate noncontrolling interest, net of dividends, at December 31, 2024 and 2023 has been recorded as a component of equity on our consolidated balance sheets.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

million ($ million), net of cash acquired. Sauna360 has a portfolio of products that includes traditional, infrared, and wood-burning saunas as well as steam showers. The business is included within the Plumbing Products segment. In connection with this acquisition, we recognized $ million of indefinite-lived intangible assets, which is related to trademarks, and $ million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of years. We also recognized $ million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business. During the fourth quarter of 2023 and third quarter of 2024, we updated the allocation of the purchase price to certain identifiable assets and liabilities based on analysis of information as of the acquisition date, which resulted in a $ million decrease and a $ million increase to goodwill, respectively.

In the first quarter of 2021, our Hansgrohe SE subsidiary acquired a percent equity interest in Easy Sanitary Solutions B.V. ("ESS"). The remaining percent equity interest in ESS was subject to a call and put option that was exercisable by Hansgrohe SE or the sellers, respectively, any time after December 31, 2023. The redemption value of the call and put option was the same and based on a floating EBITDA value. The call and put options were determined to be embedded within the redeemable noncontrolling interest and were recorded as temporary equity in the condensed consolidated balance sheets. We elected to adjust the redeemable noncontrolling interest to its full redemption amount directly into retained deficit.

In the first quarter of 2024, the sellers exercised their put option to sell the remaining percent equity interest in ESS for € million ($ million). The transaction was accounted for as an equity purchase transaction.

million, net of cash disposed, and subject to final closing adjustments. Post-closing adjustments were finalized with the buyer in the fourth quarter of 2024. In connection with the divestiture, we recognized a loss of $ million, inclusive of costs to sell, for the year ended December 31, 2024, which is included in other, net in our consolidated statement of operations. The sale of Kichler did not represent a strategic shift that will have a major effect on our operations and financial results and therefore was not presented as discontinued operations. Prior to the divestiture, the results of the business were included in our Decorative Architectural Products segment.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ International Total$ $ $

Year Ended December 31, 2023

Plumbing Products

Decorative Architectural Products

Total

Primary geographic areas:

North America

International

Total

Year Ended December 31, 2022

Plumbing Products

Decorative Architectural Products

Total

Primary geographic areas:

North America

International

Total

We recognized increases to revenue of $ million, $ million, and $ million in 2024, 2023, and 2022, respectively, for variable consideration related to performance obligations settled in previous periods.

We record contract assets for items for which we have satisfied our performance obligation but our receipt of payment is contingent upon delivery or other circumstances other than the passage of time. Our contract assets are recorded in prepaid expenses and other in our consolidated balance sheets. Our contract assets generally become unconditional and are reclassified to receivables in the quarter subsequent to each balance sheet date. Our contract asset balance was $ million and $ million at December 31, 2024 and 2023, respectively.

We record contract liabilities primarily for deferred revenue. Our contract liabilities are recorded in accrued liabilities in our consolidated balance sheets. Our contract liabilities are generally recognized to net sales in the immediately subsequent reporting period. Our contract liability balance was $ million at both December 31, 2024 and 2023.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ Provision for expected credit losses during the period Write-offs charged against the allowance()()Recoveries of amounts previously written off $

(B) In the third quarter of 2023, we acquired Sauna360 and during the third quarter of 2024, we recognized $ million of goodwill in our Plumbing Products segment related to this acquisition (refer to Note B for additional information). In the second quarter of 2024, we recognized $ million of goodwill in our Decorative Architectural Products segment related to an immaterial acquisition.

Other indefinite-lived intangible assets were $ million and $ million at December 31, 2024 and 2023, respectively, and principally included registered trademarks.

We completed our annual impairment testing of goodwill and other indefinite-lived intangible assets in the fourth quarters of 2024, 2023 and 2022. We recognized a $ million non-cash impairment charge within our Decorative Architectural Products segment to other indefinite-lived intangible assets in the fourth quarter of 2023 due to competitive market conditions and increased cost of capital in our lighting business. We recognized a $ million and $ million non-cash impairment charge within our Decorative Architectural Products segment to goodwill and other indefinite-lived intangible assets, respectively, in the fourth quarter of 2022 due to competitive market conditions, higher inflationary costs and increased cost of capital in our lighting business. There was impairment of goodwill for any of our reporting units or of our other indefinite-lived intangible assets in any of these years, other than as disclosed above.

The carrying value of our definite-lived intangible assets was $ million (net of accumulated amortization of $ million) at December 31, 2024 and $ million (net of accumulated amortization of $ million) at December 31, 2023 and principally included customer relationships with a weighted average amortization period of years in 2024 and years in 2023. Amortization expense related to the definite-lived intangible assets was $ million, $ million and $ million in 2024, 2023 and 2022, respectively.

At December 31, 2024, amortization expense related to the definite-lived intangible assets during each of the next five years will be as follows: 2025 – $ million; 2026 – $ million; 2027 – $ million; 2028 – $ million and 2029 – $ million.

The decrease in our indefinite-lived intangible assets and definite-lived intangible assets is primarily a result of the divestiture of Kichler.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

to days. 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 confirmed as valid under the program and included in accounts payable were $ million and $ million at December 31, 2024 and 2023, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $ million and $ million at December 31, 2024 and 2023, respectively. All payments made under the program are recorded as a decrease in accounts payable and accrued liabilities, net, in our consolidated statements of cash flows.

Invoices confirmed Confirmed invoices paid()Other (including currency translation and divestitures)()Confirmed obligations outstanding at December 31$

$ Salaries, wages and commissions Employee retirement plans Deferred revenue Operating lease liabilities (Note F) Warranty (Note R) Interest Income taxes payable Product returns Property, payroll and other taxes Insurance reserves Other Total$ $

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

%, due November 15, 2027$ $

%, due February 15, 2028

%, due August 1, 2029

%, due October 1, 2030

%, due February 15, 2031

%, due August 15, 2032

%, due May 15, 2047

%, due February 15, 2051

Other Prepaid debt issuance costs()() Less: Current portion Total long-term debt$ $

All of the notes and debentures above are senior indebtedness and, other than the % Notes due 2029, are redeemable at our option.

At December 31, 2024, the debt maturities during each of the next five years were as follows: 2025 – $ million; 2026 – $ million; 2027 – $ million; 2028 – $ million and 2029 – $ million.

On April 26, 2022, we entered into a revolving credit agreement (the “2022 Credit Agreement”) with an aggregate commitment of $ billion and a maturity date of April 26, 2027. Under the 2022 Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $ million with the current lenders or new lenders.

The 2022 Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries in U.S. dollars, European euros, British pounds sterling, and certain other currencies for revolving credit loans, swingline loans and letters of credit. Borrowings under the revolving credit loans denominated in any agreed upon currency other than U.S. dollars are limited to the equivalent of $ million. We can also borrow swingline loans up to $ million and obtain letters of credit of up to $ million. Outstanding letters of credit under the 2022 Credit Agreement reduce our borrowing capacity and we had outstanding letters of credit under the 2022 Credit Agreement at December 31, 2024.

Revolving credit loans denominated in U.S. dollars bear interest under the 2022 Credit Agreement at our option, at (A) SOFR rate for the interest period in effect for the borrowing, plus %, plus an applicable margin based upon our then-applicable corporate credit ratings; or (B) a rate per annum equal to the greatest of (i) the U.S. prime rate, (ii) the Federal Reserve Bank of New York effective rate plus % and (iii) the adjusted term SOFR rate for a one month interest period, plus %; plus an applicable margin based upon our then-applicable corporate credit ratings. Foreign currency revolving credit loans denominated in British pounds sterling bear interest at a rate per annum equal to the Daily Simple SONIA, plus an applicable margin based upon our then-applicable corporate credit ratings. Foreign currency revolving credit loans denominated in European euros bear interest at the adjusted EURIBOR rate, plus an applicable margin based upon our then-applicable corporate credit ratings. The various benchmarks are subject to applicable floors.

The 2022 Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding to 1.0, and (B) an interest coverage ratio, as adjusted for certain items, not less than to 1.0.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

borrowings were outstanding at December 31, 2024.

On May 9, 2023, our Hansgrohe SE subsidiary entered into € million ($ million) of short-term borrowings to support working capital needs. The loans contained no financial covenants and the entire balance was repaid at December 31, 2023.

On April 26, 2022, we entered into a -day $ million senior unsecured delayed draw term loan (the "term loan") due April 26, 2023 with a syndicate of lenders. The term loan and commitments thereunder were subject to prepayment or termination at our option and the loans bore interest at SOFR plus a spread adjustment and %. The covenants, including the financial covenants, were substantially the same as those in the 2022 Credit Agreement. We repaid $ million during 2022 and the remaining $ million upon the maturity of the term loan on April 26, 2023.

Interest paid was $ million in 2024 and $ million in both 2023 and 2022.

Fair Value of Debt. The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues, which are Level 1 inputs. At both December 31, 2024 and 2023, the aggregate estimated market value of our short-term and long-term debt was approximately $ billion, compared with the aggregate carrying value of $ billion.

$ $ Performance restricted stock units Stock options Long-term stock awards Phantom stock awards and stock appreciation rights Total$ $ $

At December 31, 2024, million shares of our common stock were available under the 2024 Plan for the granting of restricted stock units, performance restricted stock units, stock options and long-term stock awards.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ $ Granted Vested() () () Forfeited() () () Unvested restricted stock units at December 31 $ $ $

At December 31, 2024, 2023, and 2022, there was $ million, $ million, and $ million, respectively, of unrecognized compensation expense related to unvested restricted stock units; such units had a weighted average remaining vesting period of at December 31, 2024, 2023, and 2022.

The total market value (at the vesting date) of restricted stock units which vested was $ million, $ million, and $ million during 2024, 2023 and 2022, respectively.

Performance Restricted Stock Units. Under our Long Term Incentive Program, we grant performance restricted stock units to certain senior executives. These performance restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement over a period of specified return on invested capital performance goals, an earning per share metric, and, beginning with the 2023 grant, a relative total shareholder return metric that have been established by our Compensation Committee for the performance period. To receive the award, the recipient must be employed through the share award date. Performance restricted stock units are granted at a target number; based on our performance, the number of performance restricted stock units that vest can be adjusted downward to and upward to a maximum of percent of the target number.

During 2024, we granted approximately performance restricted stock units with a grant date fair value of approximately $ per share, approximately performance restricted stock units were issued and performance restricted stock units were forfeited. During 2023, we granted approximately performance restricted stock units with a grant date fair value of approximately $ per share, approximately performance restricted stock units were issued and no performance restricted stock units were forfeited. At December 31, 2023, there were approximately shares vested but unissued. During 2022, we granted approximately performance restricted stock units with a grant date fair value of approximately $ per share, approximately performance restricted stock units were issued and performance restricted stock units were forfeited. At December 31, 2022, there were approximately shares vested but unissued.

Stock Options. Stock options are granted to certain senior executives. The exercise price equals the market price of our common stock at the grant date and the stock options expire no later than years after the grant date.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ $ Granted Exercised() () () Forfeited() () () Outstanding stock options at December 31 $ $ $

The aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares. The aggregate intrinsic value for options exercised during 2024, 2023 and 2022 was $ million, $ million and $ million, respectively. The weighted-average remaining term for options outstanding at December 31, 2024, 2023 and 2022 was , and , respectively.

Weighted average exercise price$$$$$$Aggregate intrinsic value$ million$ million$ million$ million$ million$ millionWeighted-average remaining term years years years years years years

At December 31, 2024, 2023 and 2022, there was $ million of unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options; such options had a weighted average remaining vesting period of at both December 31, 2024 and 2023 and at December 31, 2022.

$ $ Risk-free interest rate % % %Dividend yield % % %Volatility factor % % %Expected option life years years years

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ $ Vested() () () Forfeited () () Unvested stock award shares at December 31 $ $ $

The total market value (at the vesting date) of stock award shares which vested was $ million, $ million and $ million during 2024, 2023 and 2022, respectively.

Phantom Stock Awards and Stock Appreciation Rights. Certain non-U.S. employees are granted phantom stock awards and SARs.

In 2024, 2023 and 2022, we granted approximately , , and shares, respectively, of phantom stock awards with an aggregate fair value of $ million in both 2024 and 2023 and $ million in 2022 and paid cash of $ million in 2024 and $ million in both 2023 and 2022 to settle phantom stock awards.

$ Unrecognized compensation cost$ $ Equivalent common shares

We granted shares of SARs in 2023 and SARs were granted in 2024 and 2022.

$ $ Defined-benefit pension plans $ $ $

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ $ Service cost Interest cost Actuarial (gain) loss, net()() Foreign currency exchange() Benefit payments()()()()Projected benefit obligation at December 31$ $ $ $ Changes in fair value of plan assets: Fair value of plan assets at January 1$ $ $ $ Actual return on plan assets Foreign currency exchange() Company contributions Benefit payments()()()()Fair value of plan assets at December 31$ $ $ $ Funded status at December 31$()$()$()$() $ $ $ Accrued liabilities () ()Other liabilities()()()()Total net liability$()$()$()$() $ $ $ Net prior service cost Total$ $ $ $

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ $ Accumulated benefit obligation Fair value of plan assets

The projected benefit obligation was in excess of plan assets for all of our qualified defined-benefit pension plans at December 31, 2024 and 2023 which had an accumulated benefit obligation in excess of plan assets.

Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our consolidated statements of operations.

$ $ $ $ $ Interest cost Expected return on plan assets() () () Recognized net loss Recognized prior service cost Net periodic pension cost$ $ $ $ $ $

$ Currency translation() Fair value, December 31$ $

Assumptions.

% % %Expected return on plan assets % % %Rate of compensation increase % % %Discount rate for net periodic pension cost % % %

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

percent to percent, with the most significant portion of the liabilities having a discount rate for obligations of percent or higher. At December 31, 2023, such rates for our defined-benefit pension plans ranged from percent to percent, with the most significant portion of the liabilities having a discount rate for obligations of percent or higher. At December 31, 2022, such rates for our defined‑benefit pension plans ranged from percent to percent, with the most significant portion of the liabilities having a discount rate for obligations of percent or higher. The increase in the weighted average discount rate from 2023 to 2024 is principally due to higher long-term interest rates in the bond markets. The decrease in the weighted average discount rate from 2022 to 2023 is principally due to lower long-term interest rates in the bond markets.

The asset allocation of the investment portfolio was developed with the objective of achieving our expected rate of return and reducing volatility of asset returns, and considered the freezing of future benefits. The fixed-income portfolio is invested in corporate bonds, bond index funds and U.S. Treasury securities. Although we would expect alternative investments to yield a higher rate of return than the targeted overall long-term return, these investments are subject to greater volatility and would be less liquid than financial instruments that trade on public markets.

The fair value of our plan assets is subject to risk including significant concentrations of risk in our plan assets related to equity, interest rate and operating risk. In order to ensure plan assets are sufficient to pay benefits, a portion of our foreign qualified plans' assets are allocated to equity investments and real assets that are expected, over time, to earn higher returns with more volatility than fixed-income investments which more closely match pension liabilities. Within equity, risk is mitigated by targeting a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process.

In order to minimize asset volatility relative to the liabilities, a significant portion of plan assets are allocated to fixed-income investments that are exposed to interest rate risk. Rate increases generally will result in a decline in fixed-income assets, while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities.

Potential events or circumstances that could have a negative effect on estimated fair value include the risks of inadequate diversification and other operating risks. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight, plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance and audit reviews to ensure adherence to these policies. In addition, we periodically seek the input of our independent advisor to ensure the investment policy is appropriate.

Cash Flows. At December 31, 2024, we expect to contribute approximately $ million in 2025 to our non-qualified (domestic) defined-benefit pension plans.

$ 2026 2027 2028 2029 2030 - 2034

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

billion of shares of our common stock, exclusive of excise tax, in open-market transactions or otherwise. During 2024, we repurchased and retired million shares of our common stock (including million shares to offset the dilutive impact of restricted stock units granted in 2024) for $ million, inclusive of excise tax of $ million. At December 31, 2024, we had $ million remaining under the 2022 authorization.

During 2023, we repurchased and retired million shares of our common stock (including million shares to offset the dilutive impact of restricted stock units granted in 2023) for $ million, inclusive of excise tax of $ million.

During 2022, we repurchased and retired million shares of our common stock (including million shares to offset the dilutive impact of restricted stock units granted in 2022) for $ million.

We have declared and paid cash dividends per common share of $ in 2024, $ in 2023 and $ in 2022.

Accumulated Other Comprehensive Income. $ Unrecognized net loss and prior service cost, net()()Accumulated other comprehensive income$ $

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $

Operating expenses (D)

Impairment charges for goodwill and other intangible assets

Corporate expenses (E)

Segment operating profit

$ $ $

General corporate expense, net (E)

()Operating profit Other income (expense), net()Income before income taxes$

Year Ended December 31, 2023

Plumbing Products

Decorative Architectural Products

Total

Net sales (A) (B) (C)

Operating expenses (D)

Impairment charges for goodwill and other intangible assets

Corporate expenses (E)

Segment operating profit

General corporate expense, net (E)

()

Operating profit

Other income (expense), net

()

Income before income taxes

Year Ended December 31, 2022

Plumbing Products

Decorative Architectural Products

Total

Net sales (A) (B) (C)

Operating expenses (D)

Impairment charges for goodwill and other intangible assets

Corporate expenses (E)

Segment operating profit

General corporate expense, net (E)

()

Operating profit

Other income (expense), net

()

Income before income taxes

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ $ $ $ $ $ $ Decorative Architectural Products

Corporate

Total$ $ $ $ $ $ $ $ $

(A)Intra-company sales between segments were not material and have been excluded from net sales.

(B)Included in net sales were sales to one customer of $ million, $ million and $ million in 2024, 2023 and 2022, respectively. Such net sales were included in each of our segments.

(C)Net sales from our operations in the U.S. were $ million, $ million and $ million in 2024, 2023 and 2022, respectively.

(D)Operating expenses included cost of sales and selling, general and administrative expenses.

(E)Corporate expenses included specific corporate overhead allocated to each segment. General corporate expense, net included those expenses not specifically attributable to our segments.

(F)Property additions exclude amounts paid for long-lived assets as part of acquisitions.

(G)Long-lived assets of our operations in the U.S. and Europe were $ million and $ million, $ million and $ million, and $ million and $ million at December 31, 2024, 2023 and 2022, respectively.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ Foreign $ $ $ Income tax expense:Currently payable:U.S. Federal$ $ $ State and local Foreign Deferred:U.S. Federal ()State and local () Foreign ()$ $ $ Deferred tax assets at December 31:Receivables$ $ Inventories Other assets, including stock-based compensation Accrued liabilities Noncurrent operating lease liabilities Other long-term liabilities Capitalized research expenditures Net operating loss carryforward Tax credit carryforward Valuation allowance()() Deferred tax liabilities at December 31:Property and equipment Operating lease right-of-use assets Intangibles Investment in foreign subsidiaries Other Net deferred tax asset at December 31$ $

The net deferred tax asset consisted of net deferred tax assets (included in other assets) of $ million and $ million, and net deferred tax liabilities (included in other liabilities) of $ million and $ million, at December 31, 2024 and 2023, respectively.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

million state income tax benefit, net of federal expense, due to a legal restructuring of certain U.S. businesses that occurred in early 2024 which allowed for the utilization of certain loss carryforwards that were not previously recognized.

We continue to maintain a valuation allowance of $ million and $ million on certain state and foreign deferred tax assets as of December 31, 2024 and 2023, respectively, due primarily to cumulative loss positions in those jurisdictions.

Our capital allocation strategy includes reinvesting in our business, maintaining an investment grade credit rating, maintaining a relevant dividend and deploying excess free cash flow to share repurchases or acquisitions. In order to provide greater flexibility in the execution of our capital allocation strategy, we may repatriate earnings from certain foreign subsidiaries. Our deferred tax balance on investment in foreign subsidiaries reflects the impact of all taxable temporary differences, including those related to substantially all undistributed foreign earnings, except those that are legally restricted, and consists primarily of foreign withholding taxes.

Of the $ million and $ million deferred tax assets related to the net operating loss and tax credit carryforwards at December 31, 2024 and 2023, respectively, $ million and $ million, respectively, will expire within approximately years and $ million and $ million, respectively, have no expiration.

% % %State and local taxes, net of U.S. Federal tax benefit Higher taxes on foreign earnings Valuation allowances () Stock-based compensation()() Other, net ()()Effective tax rate % % %

Income taxes paid were $ million, $ million and $ million in 2024, 2023 and 2022, respectively.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ Current year tax positions:Additions Reductions()()Prior year tax positions:Additions Lapse of applicable statutes of limitation()()Settlement with tax authorities ()Balance at December 31$ $ Liability for interest and penalties Balance at December 31, including interest and penalties$ $

If recognized, $ million and $ million of the liability for uncertain tax positions at December 31, 2024 and 2023, respectively, net of any U.S. Federal tax benefit, would impact our effective tax rate.

Interest and penalties recognized in income tax expense were insignificant in years ended December 31, 2024, 2023 and 2022.

Of the $ million and $ million total liability for uncertain tax positions (including related interest and penalties) at December 31, 2024 and 2023, respectively, $ million and $ million are recorded in other liabilities, respectively, and $ million and $ million are recorded as a net offset to other assets, respectively.

We file income tax returns in the U.S. Federal jurisdiction, and various local, state and foreign jurisdictions. We continue to participate in the Compliance Assurance Process ("CAP"). CAP is a real-time audit of the U.S. Federal income tax return that allows the Internal Revenue Service ("IRS"), working in conjunction with us, to determine tax return compliance with the U.S. Federal tax law prior to filing the return. This program provides us with greater certainty about our tax liability for a given year within months, rather than years, of filing our annual tax return and greatly reduces the need for recording a liability for U.S. Federal uncertain tax positions. The IRS has completed their examination of our consolidated U.S. Federal tax returns through 2023. With few exceptions, we are no longer subject to state or foreign income tax examinations on filed returns for years before 2020.

As a result of tax audit closings, settlements and the expiration of applicable statutes of limitation in various jurisdictions within the next 12 months, we anticipate that it is reasonably possible the liability for uncertain tax positions could be reduced by approximately $ million.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

$ $ Less: Allocation to redeemable noncontrolling interest ()Less: Allocation to unvested restricted stock awards Net income attributable to common shareholders$ $ $ Denominator:Basic common shares (based upon weighted average) Add: Dilutive effect of stock options and other stock-based incentives Diluted common shares

We follow accounting guidance regarding determining whether instruments granted in share-based payment transactions are participating securities. This accounting guidance clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends prior to vesting should be considered participating securities. The dividends associated with the unvested restricted stock units are forfeitable, and consequently, the restricted stock units are not considered a participating security and are not accounted for under the two-class method. We have also granted restricted stock awards that contain non-forfeitable rights to dividends on unvested shares; such unvested restricted stock awards are considered participating securities. As participating securities, the unvested shares are required to be included in the calculation of our basic income per common share, using the two-class method. The two-class method of computing income per common share is an allocation method that calculates income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. For the years ended December 31, 2024, 2023 and 2022, we allocated dividends and undistributed earnings to the participating securities.

Number of restricted stock units Number of performance restricted stock units

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)

$ Accruals for warranties issued during the year Accruals related to pre-existing warranties Settlements made (in cash or kind) during the year()()Other, net (including currency translation, acquisitions, and divestitures)() Balance at December 31$ $

Other Matters. 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 not paid a material amount related to these indemnifications, and we evaluate the probability that amounts may be incurred and record an estimated liability when it is probable and reasonably estimable.

million for the year ended December 31, 2023.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

a.Evaluation of Disclosure Controls and Procedures.

The Company's Principal Executive Officer and Principal Financial Officer have concluded, based on an evaluation of the Company's disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15 that, as of December 31, 2024, the Company's disclosure controls and procedures were effective.

b.Management's Report on Internal Control over Financial Reporting.

Management's report on the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) is included in this Report under Item 8. Financial Statements and Supplementary Data, under the heading, "Management's Report on Internal Control over Financial Reporting" and is incorporated herein by reference. The report of our independent registered public accounting firm is also included under Item 8, under the heading, "Report of Independent Registered Public Accounting Firm" and is incorporated herein by reference.

c.Changes in Internal Control over Financial Reporting.

In connection with the evaluation of the Company's internal control over financial reporting that occurred during the quarter ended December 31, 2024, which is required under the Securities Exchange Act of 1934 by paragraph (d) of Exchange Rules 13a-15 or 15d-15 (as defined in paragraph (f) of Rule 13a-15), management determined that there was no change that materially affected or is reasonably likely to materially affect internal control over financial reporting.

During the second quarter of 2025, we plan to upgrade the enterprise resource planning system in one of our operating units within our Plumbing Products segment. The current system will be upgraded to a newer version and is not in response to any identified deficiency or weakness in the Company's internal control over financial reporting. However, this upgrade may involve complexities that could result in modification to certain internal controls at the operating unit.

Item 9B. Other Information.

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements

, , our , a new 10b5-1 Trading Plan that is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act (the "Plan"). Trades under the Plan are permitted to begin on February 18, 2025 and the Plan's maximum duration is until October 31, 2025. The Plan is intended to allow for: (i) the sale of shares, (ii) the exercise and sale of up to stock options, and (iii) the sale of shares acquired by Mr. Allman upon the vesting of performance restricted stock units ("PRSUs") granted to him under our 2022-2024 Long Term Incentive Program (the number of PRSUs that vest is subject to certain performance conditions under the Long Term Incentive Program, with a maximum of PRSUs).

During the three months ended December 31, 2024, none of our other officers or directors or any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Our Code of Ethics applies to all employees, officers and directors including our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer, and is posted on our website at www.masco.com. Amendments to or waivers of our Code of Ethics for directors and executive officers, if any, will be posted on our website.

We insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the exchange listing standards applicable to us. In addition, it is our policy to comply with applicable securities and state laws, including insider trading laws, when engaging in transactions in our securities. A copy of our insider trading policy is filed as Exhibit 19 to this annual report on Form 10-K.

Other information required by this Item will be contained in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, to be filed before April 29, 2025, and such information is incorporated herein by reference.

Item 11. Executive Compensation.

Information required by this Item will be contained in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, to be filed before April 29, 2025, and such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

We grant equity under our 2024 Long Term Stock Incentive Plan (the "2024 Plan"). The following table sets forth information as of December 31, 2024 concerning the 2024 Plan, which was approved by our stockholders. We do not have any equity compensation plans that have not been approved by our stockholders.


Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
Equity compensation plans approved by stockholders	1,048,291	$	55.92	7,458,230

The remaining information required by this Item will be contained in our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders, to be filed before April 29, 2025, and such information is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

a. Listing of Documents.

(1)Financial Statements. Our consolidated financial statements included in Item 8 hereof, as required at December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022, consist of the following:


Consolidated Balance Sheets			35
Consolidated Statements of Operations			36
Consolidated Statements of Comprehensive Income (Loss)			37
Consolidated Statements of Cash Flows			38
Consolidated Statements of Shareholders' Equity			39
Notes to Consolidated Financial Statements			40

(2)Financial Statement Schedule.

a. Our Financial Statement Schedule appended hereto, as required for the years ended December 31, 2024, 2023 and 2022, consists of the following:


II. Valuation and Qualifying Accounts			79

(3)Exhibits.

Exhibit
No.

Incorporated By Reference

Filed
Herewith

Exhibit Description

Form

Exhibit

Filing Date

3.a

Restated Certificate of Incorporation of Masco Corporation.

2015 10-K

3.i

02/12/2016

3.b

Bylaws of Masco Corporation, as Amended and Restated on February 5, 2021.

2020 10-K

3.b

02/09/2021

4.a

Indenture dated as of December 1, 1982 between Masco Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee under agreement originally with Morgan Guaranty Trust Company of New York, as Trustee, and Supplemental Indenture thereto dated as of July 26, 1994; and Directors' resolutions establishing Masco Corporation's:

2016 10-K

4.a

02/09/2017

4.a i

7-3/4% Debentures Due August 1, 2029.

2014 10-K

4.a.i(ii)

02/13/2015

4.b

Indenture dated as of February 12, 2001 between Masco Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee under agreement originally with Bank One Trust Company, National Association, as Trustee, and Supplemental Indenture thereto dated as of November 30, 2006; and Directors' Resolutions establishing Masco Corporation's:

2016 10-K

4.b

02/09/2017

4.b i

6-1/2% Notes Due August 15, 2032;

2017 10-K

4.b.i

02/08/2018

4.b ii

3.500% Notes Due November 15, 2027; and

8-K

4.1

06/15/2017

4.b iii

4.500% Notes Due May 15, 2047.

8-K

4.2

06/15/2017

Exhibit
No.

Incorporated By Reference

Filed
Herewith

Exhibit Description

Form

Exhibit

Filing Date

4.b iv

Second Supplemental Indenture, dated as of September 18, 2020, between Masco Corporation and The Bank of New York Mellon Trust Company, N.A., as successor trustee.

8-K

4.3

09/18/2020

4.b v

4.500% Notes Due May 15, 2047

8-K

4.2

09/18/2020

4.b vi

2.000% Notes Due October 1, 2030

8-K

4.1

09/18/2020

4.b vii

1.500% Notes Due February 15, 2028

8-K

4.1

03/04/2021

4.b viii

2.000% Notes Due February 15, 2031

8-K

4.2

03/04/2021

4.b ix

3.125% Notes Due February 15, 2051

8-K

4.3

03/04/2021

Note 2:

Other instruments, notes or extracts from agreements defining the rights of holders of long-term debt of Masco Corporation or its subsidiaries have not been filed since (i) in each case the total amount of long-term debt permitted thereunder does not exceed 10 percent of Masco Corporation's consolidated assets, and (ii) such instruments, notes and extracts will be furnished by Masco Corporation to the Securities and Exchange Commission upon request.

4.c

Description of securities.

2023 10-K

4.c

02/08/2024

10.a

Credit Agreement dated as of April 26, 2022 by and among Masco Corporation and Masco Europe S.à r.l. as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. and PNC Bank, National Association, as Co-Syndication Agents, and Deutsche Bank Securities, Inc., Royal Bank of Canada, Truist Bank, Bank of America, N.A., Fifth Third Bank and Wells Fargo Bank, National Association, as Co-Documentation Agents.

10-Q

10a

04/27/2022

Note 3:

Exhibits 10.b through 10.l constitute the management contracts and executive compensatory plans or arrangements in which certain of the directors and executive officers of the Company participate.

10.b

Masco Corporation 2014 Long Term Stock Incentive Plan (Amended and Restated May 9, 2016):

10-Q

10.a

07/26/2016

Form of Restricted Stock Unit Award Agreements:

10.b i

for awards between December 17, 2019 and February 2, 2022

2019 10-K

10.c.iii

02/11/2020

10.b i i

for awards on or after February 3, 2022

2021 10-K

10.c.iv

02/08/2022

Form of Stock Option Grant Agreements:

1 0.b iii

for grants prior to July 1, 2018

8-K

10.d

05/06/2014

10.b iv

for grants between July 1, 2018 and December 17, 2019

2018 10-K

10.c.iv

02/07/2019

10.b v

for grants between December 17, 2019 and February 3, 2022

2019 10-K

10.c.vi

02/11/2020

10.b vi

for grants on or after February 3, 2022

2021 10-K

10.c.viii

02/08/2022

1 0.b vi i

Form of Phantom Share Award Agreements

1 0.b vii i

Form of Stock Appreciation Rights Agreements

10.b ix

Long Term Incentive Program under Masco Corporation's 2014 Long Term Stock Incentive Plan (Amended and Restated February 3, 2022) and form of Performance Restricted Stock Unit Award Agreement thereunder.

2021 10-K

10.c.xi

02/08/2022

Exhibit
No.

Incorporated By Reference

Filed
Herewith

Exhibit Description

Form

Exhibit

Filing Date

10.b x

Non-Employee Directors Equity Program under Masco Corporation's 2014 Long Term Stock Incentive Plan (Amended and Restated February 7, 2020).

2019 10-K

10.c.xiii

02/11/2020

Form of Restricted Stock Unit Award Agreement for Non-Employee Directors:

10.b xi

for awards between February 7, 2020 and February 3, 2022

2019 10-K

10.c.xiv

02/11/2020

10.b x ii

for awards on or after February 4, 2022

2021 10-K

10.c.xvii

02/08/2022

10.c

Masco Corporation 2024 Long Term Stock Incentive Plan

1 0 .c i

Terms and Conditions of Awards Granted Under the Masco Corporation 2024 Long Term Stock Incentive Plan

1 0.c ii

Long Term Stock Incentive Program under Masco Corporation's 2024 Long Term Stock Incentive Plan and form of Performance Restricted Stock Unit Award Agreement thereunder.

1 0 .c iii

Non-Employee Directors Equity Program under Masco Corporation's 2024 Long Term Stock Incentive Plan

10-Q

10.a

07/25/2024

1 0.c iv

Form of Restricted Stock Unit Award Agreement for Non-Employee Directors

10-Q

10.b

07/25/2024

10 .d

Form of Masco Corporation Supplemental Executive Retirement and Disability Plan and amendments thereto (includes amendment freezing benefit accruals) for John G. Sznewajs.

2015 10-K

10.d.i(ii)

02/12/2016

10 .e

Other compensatory arrangements for executive officers.

2016 10-K

10.f

02/09/2017

10.f

Compensation of Non-Employee Directors.

10 .g

Masco Corporation Retirement Benefit Restoration Plan effective January 1, 1995 (as amended and restated December 22, 2010), and amendments thereto effective February 6, 2012 and January 1, 2014.

2016 10-K

10.i

02/09/2017

10 .h

Employment Offer Letter dated May 3, 2021 between Richard Marshall and Masco Corporation

10-Q

07/29/2021

10 .i

Employment Offer Letter dated August 28, 2023 between Richard Westenberg and Masco Corporation

10-Q

10.a

10/26/2023

10 .j

Amended and Restated Severance and Release Agreement dated December 21, 2023 between Masco Corporation and John G. Sznewajs

2023 10-K

10.k

02/08/2024

10 .k

Amended and Restated Severance and Release Agreement dated December 30, 2023 between Masco Corporation and Richard A. O'Reagan

2023 10-K

10.l

02/08/2024

10 .l

Amended and Restated Transition and Severance Agreement and Release of All Liability dated October 25, 2023 between Masco Corporation and David A. Chaika.

10-Q

10.b

10/26/2023

Exhibit
No.

Incorporated By Reference

Filed
Herewith

Exhibit Description

Form

Exhibit

Filing Date

Insider Trading Policies and Procedures

List of Subsidiaries.

Consent of Independent Registered Public Accounting Firm relating to Masco Corporation's Consolidated Financial Statements and Financial Statement Schedule.

31.a

Certification by Chief Executive Officer required by Rule 13a-14(a)/15d-14(a).

31.b

Certification by Chief Financial Officer required by Rule 13a-14(a)/15d-14(a).

Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Policy Relating to Recovery of Erroneously Awarded Compensation

2023 10-K

02/08/2024

101

The following financial information from Masco Corporation's Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders' Equity, and (vi) Notes to Consolidated Financial Statements.

104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

The Company will furnish to its stockholders a copy of any of the above exhibits not included herein upon the written request of such stockholder and the payment to the Company of the reasonable expenses incurred by the Company in furnishing such copy or copies.

Item 16. Form 10-K Summary.

The optional summary in Item 16 has not been included in this Form 10-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


			MASCO CORPORATION
			By:			/s/ Richard J. Westenberg
						Richard J. Westenberg Vice President, Chief Financial Officer and Treasurer

February 11, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Principal Executive Officer:

/s/ Keith J. Allman

President and Chief Executive Officer and Director

Keith J. Allman

Principal Financial Officer:

/s/ Richard J. Westenberg

Vice President, Chief Financial Officer and Treasurer

Richard J. Westenberg

Principal Accounting Officer:

/s/ Bonnie S. Van Etten

Vice President, Controller and Chief Accounting Officer

Bonnie S. Van Etten

/s/ Lisa A. Payne

Chair of the Board

Lisa A. Payne

/s/ Mark R. Alexander

Director

Mark R. Alexander

/s/ Aine L. Denari

Director

Aine L. Denari

/s/ Marie A. Ffolkes

Director

Marie A. Ffolkes

/s/ Jonathon J. Nudi

Director

Jonathon J. Nudi

/s/ Christopher A. O'Herlihy

Director

Christopher A. O'Herlihy

/s/ Donald R. Parfet

Director

Donald R. Parfet

/s/ John C. Plant

Director

John C. Plant

/s/ Sandeep Reddy

Director

Sandeep Reddy

/s/ Charles K. Stevens, lll

Director

Charles K. Stevens, III

February 11, 2025

MASCO CORPORATION

$ $ $()(a)$ 2023$ $ $ $()(a)$ 2022$ $ $ $()

(a)

$ Valuation allowance on deferred tax assets: 2024$ $ $ $()

(b)

$ 2023$ $ $

$()

(e)

$ 2022$ $ $ $()

(f)

______________________________

(a)Deductions, representing uncollectible accounts written off and divestitures, less recoveries of accounts written off in prior years.

(b)Primarily other activity not affecting income tax expense.

(c)As a result of the acquisition of Sauna360 Group Oy in the third quarter of 2023, $ million was added to valuation allowance on deferred tax assets.

(d)$ million was added to valuation allowance resulting from the establishment of certain state deferred tax assets for which the likelihood of utilization is no longer considered remote.

(e)Due to a legal restructuring of certain U.S. businesses that occurred in early 2024, a $ million reduction in valuation allowance was recorded as a $ million state income tax benefit, net of federal expense.

(f)Net reduction to valuation allowance recorded as an income tax benefit.

MASCO CORP /DE/ - Annual Report: 2024 (Form 10-K)

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