MASCO CORP /DE/ - Quarter Report: 2025 March (Form 10-Q)

))) $ $() Proceeds from revolving credit borrowings, net Proceeds from the exercise of stock options Employee withholding taxes paid on stock-based compensation()()Decrease in debt, net ()Net cash for financing activities()()CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:Capital expenditures()()Other, net ()Net cash for investing activities()()Effect of exchange rate changes on cash and cash investments ()CASH AND CASH INVESTMENTS: Decrease for the period()()At January 1 At March 31$ $

See notes to condensed consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

For the Three Months Ended March 31, 2025 and 2024

(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, 2024

()

Total comprehensive income (loss)

—

()

Shares issued

—

Shares retired:

Repurchased

()

—

Surrendered (non-cash)

()

—

()

—

Cash dividends declared

()

—

()

—

Redemption of redeemable noncontrolling interest

—

Stock-based compensation

—

Balance, March 31, 2024

()

Balance, January 1, 2025

()

Total comprehensive income

—

Shares issued

—

Shares retired:

Repurchased

()

—

Surrendered (non-cash)

()

—

()

—

Cash dividends declared

()

—

()

—

Stock-based compensation

—

Balance, March 31, 2025

()

See notes to condensed consolidated financial statements.

Amounts may not add due to rounding.

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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.

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

$ $ International Total$ $ $

Three Months Ended March 31, 2024

Plumbing Products

Decorative Architectural Products

Total

Primary geographic areas:

North America

International

Total

We reversed $ million of revenue for the three months ended March 31, 2025 related to performance obligations settled in previous years.

Our contract asset balance was $ million at both March 31, 2025 and December 31, 2024. Our contract liability balance was $ million and $ million at March 31, 2025 and December 31, 2024, respectively.

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

million and $ million at March 31, 2025 and December 31, 2024, respectively, and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $ million (net of accumulated amortization of $ million) at March 31, 2025 and $ million (net of accumulated amortization of $ million) at December 31, 2024, and principally included customer relationships.

million and $ million at March 31, 2025 and December 31, 2024, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $ million and $ million at March 31, 2025 and December 31, 2024, respectively.

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 March 31, 2025.

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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

million was borrowed and outstanding at a weighted average interest rate of % at March 31, 2025.

billion, compared with the aggregate carrying value of $ billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2024 was approximately $ billion, compared with the aggregate carrying value of $ billion.

$ $

Operating expenses (B)

Corporate expenses (C)

Segment operating profit

$ $ $

General corporate expense, net (C)

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

Three Months Ended March 31, 2024

Plumbing Products

Decorative Architectural Products

Total

Net sales (A)

Operating expenses (B)

Corporate expenses (C)

Segment operating profit

General corporate expense, net (C)

()

Operating profit

Other income (expense), net

()

Income before income taxes

MASCO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

$ $ $ $ 1,801 $1,926 (6)%

Percent Change

286 $318 (10)%

The following discussion of business segment results refers to the three months ended March 31, 2025 compared to the same period of 2024. Changes in operating profit in the following business segment results discussion exclude general corporate expense, net.

BUSINESS SEGMENT RESULTS DISCUSSION

Plumbing Products

Sales

Net sales in the Plumbing Products segment decreased one percent for the three months ended March 31, 2025. In local currencies (including sales in currencies outside their respective functional currencies), net sales increased one percent. Higher net selling prices increased sales by one percent, partially offset by unfavorable sales mix which decreased sales by one percent.

Operating Results

Operating profit in the Plumbing Products segment for the three months ended March 31, 2025 was negatively impacted by higher commodity costs, higher marketing costs and unfavorable sales mix, partially offset by higher net selling prices and cost savings initiatives.

Decorative Architectural Products

Sales

Net sales in the Decorative Architectural Products segment decreased 16 percent for the three months ended March 31, 2025. The divestiture of our Kichler business decreased sales by eight percent and lower sales volume decreased sales by seven percent.

Operating Results

Operating profit in the Decorative Architectural Products segment for the three months ended March 31, 2025 was primarily negatively impacted by lower sales volume.

Liquidity and Capital Resources

Overview of Capital Structure

We had cash and cash investments of approximately $377 million and $634 million at March 31, 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 March 31, 2025 and December 31, 2024, $265 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.

We believe that our present cash balance and cash flows from operations, and borrowing availability under our revolving credit agreement, are sufficient to fund our near-term working capital and other investment needs. We believe that our longer-term working capital and other general corporate requirements will be satisfied through cash flows from operations and, to the extent necessary, from bank borrowings and future financial market activities. However, due to the changing market conditions and its impact on our customers and suppliers, we are unable to fully estimate the extent of the impact that the changing market conditions may have on our future financial condition.

Credit Agreement

On April 26, 2022, we entered into a revolving credit agreement (the “2022 Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of April 26, 2027.

Under the 2022 Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $500 million with the current lenders or new lenders. See Note H to the condensed consolidated financial statements for additional information.

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 $131 million was borrowed and outstanding at a weighted average interest rate of 5.554% at March 31, 2025.

Other Liquidity and Capital Resource Activities

As part of our ongoing efforts to improve our cash flow and related liquidity, we work with suppliers to optimize our terms and conditions, including extending payment terms. We also facilitate a voluntary supply chain finance program (the "program") to provide certain of our suppliers with the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The amounts confirmed as valid under the program and included in accounts payable were $46 million and $36 million at March 31, 2025 and December 31, 2024, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $24 million and $23 million at March 31, 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.

Share Repurchases

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 three months ended March 31, 2025, we repurchased and retired approximately 1.8 million shares of our common stock (including 0.3 million shares to offset the dilutive impact of restricted stock units granted in the three months ended March 31, 2025) for approximately $131 million, inclusive of excise tax of $1 million. At March 31, 2025, we had approximately $766 million remaining under the 2022 authorization.

Cash Flows

For the three months ended March 31, 2025, net cash used for operations was $158 million, primarily driven by changes in working capital, partially offset by operating profit.

For the three months ended March 31, 2025, net cash used for financing activities was $72 million, primarily due to $130 million for the repurchase and retirement of our common stock and $66 million for the payment of cash dividends, partially offset by $131 million of net proceeds from revolving credit loan borrowings.

For the three months ended March 31, 2025, net cash used for investing activities was $33 million, primarily driven by $32 million of capital expenditures.

Cautionary Statement Concerning Forward-Looking Statements

This Report contains statements that reflect our views about our future performance and constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "outlook," "believe," "anticipate," "appear," "may," "will," "should," "intend," "plan," "estimate," "expect," "assume," "seek," "forecast," and similar references to future periods. Our views about future performance involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements.

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.

These and other factors are discussed in detail in Item 1A. "Risk Factors" in our most recent Annual Report on Form 10-K, as well as in other filings we make with the Securities and Exchange Commission. Any forward-looking statement made by us speaks only as of the date on which it was made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.


MASCO CORPORATION
Item 4.
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 March 31, 2025, the Company's disclosure controls and procedures were effective.

b. 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 March 31, 2025, 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.

MASCO CORPORATION

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings involving us is set forth in Note L to our condensed consolidated financial statements included in Part I, Item 1 of this Report and is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes to the risk factors of the Company set forth in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding the repurchase of our common stock for the three months ended March 31, 2025 under the 2022 share repurchase authorization:


Period	Total Number Of Shares Purchased	Average Price Paid Per Common Share		Total Number Of Shares Purchased As Part Of Publicly Announced Plans or Programs	Maximum Value Of Shares That May Yet Be Purchased Under The Plans Or Programs
1/1/25 - 1/31/25	467,144	$	77.05	467,144	$	860,357,022
2/1/25 - 2/28/25	180,116	$	77.73	180,116	$	846,356,045
3/1/25 - 3/31/25	1,125,861	$	71.07	1,125,861	$	766,345,395
Total for the quarter	1,773,121	$	73.32	1,773,121	$	766,345,395

Item 5. Other Information

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

During the three months ended March 31, 2025, none of our officers or directors or any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

MASCO CORPORATION

PART II. OTHER INFORMATION, Continued

Item 6. Exhibits


1 0.a						Employment Offer Letter dated March 3, 2025 between Jonathan J. Nudi and Masco Corporation.
1 0.b						Retention Agreement dated March 5, 2025 between Jai Shah and Masco Corporation.
31.a						Certification by Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
31.b						Certification by Chief Financial Officer required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
32						Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.
101						The following financial information from Masco Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders' Equity, and (vi) Notes to Condensed Consolidated Financial Statements.
104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

MASCO CORPORATION

PART II. OTHER INFORMATION, Concluded

SIGNATURE

Pursuant to the requirements 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

April 23, 2025

MASCO CORP /DE/ - Quarter Report: 2025 March (Form 10-Q)

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