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What changed in Masco's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Masco's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+158 added−170 removedSource: 10-K (2025-02-11) vs 10-K (2024-02-08)

Top changes in Masco's 2024 10-K

158 paragraphs added · 170 removed · 144 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

21 edited+0 added−3 removed35 unchanged
Biggest changeIn 2023, we acquired all of the share capital of Sauna360 Group Oy ("Sauna360") for approximately €124 million ($136 million), net of cash acquired. In addition, we continued to return value to our shareholders by repurchasing approximately 6.2 million shares of our common stock and increasing our quarterly dividend by approximately two percent compared to 2022.
Biggest changeIn 2024, we continued to return value to our shareholders by repurchasing approximately 10.0 million shares of our common stock and increasing our quarterly dividend by approximately two percent compared to 2023. In addition, in the third quarter of 2024, we completed the divestiture of our Kichler Lighting business.
We primarily sell these products to home center retailers, online retailers, mass merchandisers, wholesalers and distributors that, in turn, sell them to plumbers, building contractors, remodelers, smaller retailers and consumers, and homebuilders.
We primarily sell these products to home center retailers, online retailers, mass merchandisers, wholesalers and distributors that, in turn, sell them to plumbers, building contractors, remodelers, smaller retailers, consumers and homebuilders.
The majority of our faucet, bathing and showering products are sold primarily in North America, Europe and China under the brand names DELTA ® , BRIZO ® , PEERLESS ® , HANSGROHE ® , AXOR ® , KRAUS ® , EASY DRAIN ® , GINGER ® , NEWPORT BRASS ® , BRASSTECH ® and WALTEC ® .
The majority of our faucet, bathing and showering products are sold primarily in North America, Europe and China under the brand names DELTA ® , BRIZO ® , PEERLESS ® , HANSGROHE ® , AXOR ® , KRAUS ® , EASY DRAIN ® , NEWPORT BRASS ® , GINGER ® , BRASSTECH ® and WALTEC ® .
Our competitors in this segment include large national and international brands such as Benjamin Moore & Co., PPG Industries, Inc.'s Glidden, Olympic, Pittsburgh Paints and PPG brands, RPM International, Inc.'s Rust-Oleum and Zinsser brands, The Sherwin‑Williams Company's Minwax, Sherwin-Williams, Thompson’s Water Seal, Valspar and Purdy brands and the Wooster Brush Company, as well as many regional and other national brands.
Our competitors in this segment include large national and international brands such as Benjamin Moore & Co., Pittsburgh Paints Co.'s Glidden, Olympic, Pittsburgh Paints and Stains and PPG Paints brands, RPM International, Inc.'s Rust-Oleum and Zinsser brands, The Sherwin‑Williams Company's Minwax, Sherwin-Williams, Thompson’s Water Seal, Valspar and Purdy brands and the Wooster Brush Company, as well as many regional and other national brands.
We view our trademarks and other intellectual property rights as important, but do not believe that there is any reasonable likelihood of a loss of such rights that would have a material adverse effect on our present business as a whole. Laws and Regulations Affecting Our Business We are subject to federal, state, local and foreign government laws and regulations.
We view our trademarks and other intellectual property rights as important, but do not believe that there is any reasonable likelihood of a loss of such rights that would have a material adverse effect on our present business as a whole. Laws and Regulations Affecting Our Business We are subject to federal, state, local and international government laws and regulations.
Our Decorative Architectural Products segment is impacted by seasonality and normally experiences stronger sales during the second and third calendar quarters, corresponding with the peak season for repair and remodel activity. 2 Plumbing Products The businesses in our Plumbing Products segment sell a wide variety of products that are manufactured or sourced by us. • Our plumbing products include faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, shower drains, steam shower systems, sinks, kitchen accessories and toilets.
Our Decorative Architectural Products segment is impacted by seasonality and normally experiences stronger sales during the second and third calendar quarters, corresponding with the peak season for repair and remodel activity. 2 Plumbing Products The businesses in our Plumbing Products segment sell a wide variety of products that are manufactured or sourced by us. • Our plumbing products include faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, shower drains, steam shower systems, water filtration systems, sinks and kitchen accessories.
We monitor applicable laws and regulations, including environmental laws and regulations, and incur ongoing expense relating to compliance, however we do not expect that compliance with federal, state, local and foreign regulations will result in material capital expenditures or have a material adverse effect on our results of operations and financial position.
We monitor applicable laws and regulations, including environmental laws and regulations, and incur ongoing expense relating to compliance, however we do not expect that compliance with federal, state, local and international regulations will result in material capital expenditures or have a material adverse effect on our results of operations and financial position.
We believe that our solid results of operations and financial position for 2023 resulted from our continued focus on our three strategic pillars: • drive the full potential of our core businesses; • leverage opportunities across our enterprise; and • actively manage our portfolio.
We believe that our solid results of operations and financial position for 2024 resulted from our continued focus on our three strategic pillars: • drive the full potential of our core businesses; • leverage opportunities across our enterprise; and • actively manage our portfolio.
Item 1. Business. Masco Corporation and its subsidiaries (the “Company”) is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes BEHR® paint; DELTA® and HANSGROHE® faucets, bath and shower fixtures; KICHLER® decorative and outdoor lighting; LIBERTY® branded decorative and functional hardware; and HOT SPRING® spas.
Item 1. Business. Masco Corporation and its subsidiaries (the “Company”) is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes BEHR® paint; DELTA® and HANSGROHE® faucets, bath and shower fixtures; LIBERTY® branded decorative and functional hardware; and HOT SPRING® spas.
Our MIROLIN products are also sold to wholesalers and distributors in Canada. • Our spas, exercise pools, aquatic fitness systems and saunas are manufactured and sold under our HOT SPRING ® , CALDERA ® , FREEFLOW SPAS ® , FANTASY SPAS ® , ENDLESS POOLS ® , TYLO and FINNLEO brands, as well as under other trademarks.
Our MIROLIN products are also sold to wholesalers and distributors in Canada. • Our spas, exercise pools, aquatic fitness systems and saunas are manufactured and sold under our HOT SPRING ® , CALDERA ® , FREEFLOW SPAS ® , FANTASY SPAS ® , AQUATERRA ® , LIFESMART ® , ENDLESS POOLS ® , TYLO ® , FINNLEO ® and HELO ® brands, as well as under other trademarks.
These products are sold in North America and South America under the brand names BEHR ® , KILZ ® , WHIZZ ® , Elder & Jenks ® and other trademarks to “do‑it‑yourself” and professional customers through home center retailers and other retailers.
These products are sold primarily in North America as well as in South America under the brand names BEHR ® , KILZ ® , WHIZZ ® , Elder & Jenks ® and other trademarks to “do‑it‑yourself” and professional customers through home center retailers and other retailers.
We are focused on the following three key areas: • Our workplace: who we are and how it feels to work at Masco • Our marketplace: how we deliver innovative solutions that meet the needs of all our consumers and customers • Our communities: how we can help increase access, equity, and inclusion through strong community partners and business partnerships 5 We have developed enterprise-wide initiatives in each strategic focus area and our businesses have developed plans designed to meet their specific needs that are aligned with these initiatives.
We are focused on the following three key areas: • Our workplace: who we are and how it feels to work at Masco • Our marketplace: how we deliver innovative solutions that meet the needs of all our consumers and customers • Our communities: how we help increase access, equity, and inclusion with our diverse community partners 5 We have developed enterprise-wide initiatives in each strategic focus area and our businesses have developed plans designed to meet their specific needs that are aligned with these initiatives.
In addition, the prices of crude oil, natural gas, propylene and certain petroleum by-products can impact our costs and results of operations in this segment. We have multiple sources, both domestic and foreign, for the raw materials used in this segment. We have encountered price volatility for propylene and certain petroleum by-products.
In addition, the prices of crude oil, natural gas, propylene and certain petroleum by-products can impact our costs and results of operations in this segment. We have multiple sources, both domestic and foreign, for the raw materials used in this segment and have encountered price volatility with respect to certain of these materials.
Our Workforce At December 31, 2023, we employed approximately 18,000 people. Available Information Our website is www.masco.com.
Our Workforce At December 31, 2024, we employed approximately 18,000 people. Available Information Our website is www.masco.com.
Our spas, exercise pools and saunas are sold worldwide to independent specialty retailers and distributors and our spas and exercise pools are also sold to online mass merchant retailers.
Our spas, exercise pools and saunas are sold worldwide to independent specialty retailers and distributors and our spas and saunas are also sold to online mass merchandisers.
The EEO-1 leadership benchmark includes executive-level/senior-officials and managers, and first-level officials and managers. • In the U.S., our salaried workforce is comprised of approximately 36 percent women and 30 percent racially / ethnically diverse individuals, as compared to the EEO-1 benchmark of 28 percent and 29 percent, respectively.
The EEO-1 leadership benchmark includes executive-level/senior-officials and managers, and first-level officials and managers. • In the U.S., our salaried workforce is comprised of approximately 35 percent women and 31 percent racially / ethnically diverse individuals, as compared to the EEO-1 benchmark of 29 percent and 29 percent, respectively.
Following is our workforce representation statistics as of December 31, 2023: • In the U.S., our leadership team is comprised of 34 percent women and 26 percent racially / ethnically diverse individuals, as compared to the EEO-1 benchmark of 26 percent and 23 percent, respectively.
Following is our workforce representation statistics as of December 31, 2024: • In the U.S., our leadership team is comprised of 34 percent women and 27 percent racially / ethnically diverse individuals, as compared to the EEO-1 benchmark of 26 percent and 24 percent, respectively.
This Report is being posted on our website concurrently with its filing with the SEC. Material contained on our website is not incorporated by reference into this Report. Our reports filed with the SEC also may be found on the SEC’s website at www.sec.gov. 6
This Report is being posted on our website concurrently with its filing with the SEC. Information contained on our website is not incorporated by reference into this Report or any other report filed with the SEC. Our reports filed with the SEC also may be found on the SEC’s website at www.sec.gov. 6
The EEO-1 salaried employees benchmark includes leadership, professionals and technicians. • In the U.S., our hourly workforce, which includes hourly and exception hourly, is comprised of 37 percent women and 54 percent racially / ethnically diverse individuals, as compared to the EEO-1 benchmark of 29 percent and 40 percent, respectively.
The EEO-1 salaried employees benchmark includes leadership, professionals and technicians. • In the U.S., our hourly workforce, which includes hourly and exception hourly, is comprised of 37 percent women and 55 percent racially / ethnically diverse individuals, as compared to the EEO-1 benchmark of 27 percent and 35 percent, respectively.
Net sales of architectural coatings comprised approximately 32 percent, 32 percent and 30 percent of our consolidated net sales in 2023, 2022, and 2021, respectively. Our BEHR products are sold through The Home Depot, our largest customer overall, as well as this segment’s largest customer.
Net sales of architectural coatings comprised approximately 32 percent of our consolidated net sales in 2024, 2023, and 2022. Our BEHR products are sold through The Home Depot, our largest customer overall, as well as this segment’s largest customer. Our Behr business grants Behr brand exclusivity in the retail sales channel in North America to The Home Depot.
Competitors of these products include Acuity, FX Luminaire, Generation Brands, Hinkley Lighting, Inc., Hunter Fan Company, Progress Lighting brand and private label brands. 4 Additional Information Intellectual Property We hold numerous U.S. and foreign patents, patent applications, licenses, trademarks, trade names, trade secrets and proprietary manufacturing processes.
Competitors for these products include American Bath Group, LLC's Dreamline brand, Fortune Brands Innovations, Inc.'s Moen brand, Gatco Fine Bathware, Kohler Co. and private label brands. 4 Additional Information Intellectual Property We hold numerous U.S. and foreign patents, patent applications, licenses, trademarks, trade names, trade secrets and proprietary manufacturing processes.
Removed
Our Behr business grants Behr brand exclusivity in the retail sales channel in North America to The Home Depot.
Removed
Competitors for these products include American Bath Group, LLC's Dreamline brand, Fortune Brands Innovations, Inc.'s Moen brand, Gatco Fine Bathware, Kohler Co. and private label brands. This segment also includes decorative indoor and outdoor lighting fixtures, ceiling fans, landscape lighting and LED lighting systems.
Removed
These products are sold to home center retailers, online retailers, electrical distributors, landscape distributors and lighting showrooms under the brand names KICHLER ® and ÉLAN ® and under other trademarks.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

47 edited+5 added−5 removed48 unchanged
Biggest changeFailure of our suppliers to timely provide us goods and services on commercially reasonable terms or to comply with applicable contractual, legal and regulatory requirements or our supplier business practices policy could have an adverse impact on our results of operations and financial position or could damage our reputation. 8 The operations of the third parties on which we depend have been and could in the future be impacted by: changing laws, regulations and policies, including those related to climate change; cybersecurity breaches; labor availability; raw material shortages; energy availability; supply disruptions; and adverse weather conditions, pandemics, wars or conflicts and other force majeure events.
Biggest changeThe operations of the third parties on which we depend have been and could in the future be impacted by: changing laws, regulations and government policies, including those related to climate change; cybersecurity breaches; labor availability; raw material shortages; energy availability; supply disruptions; and adverse weather conditions, pandemics, social or civil unrest, wars or conflicts and other force majeure events.
We have and may in the future incur significant costs as a result of claims and litigation. 13 We are also subject to product safety regulations, product recalls and direct claims for product liability that can result in significant costs and, regardless of the ultimate outcome, create adverse publicity and damage the reputation of our brands and business.
We have and may in the future incur significant costs as a result of claims and litigation. We are also subject to product safety regulations, product recalls and direct claims for product liability that can result in significant costs and, regardless of the ultimate outcome, create adverse publicity and damage the reputation of our brands and business.
If we are unable to successfully implement our talent strategies, including attracting, developing and retaining key employees, building strong and diverse leadership teams, developing effective succession planning and successfully executing organizational change and leadership transition, our results of operations and financial position could be adversely impacted.
If we are unable to successfully implement our talent strategies, including attracting, developing, engaging and retaining key employees, building strong and diverse leadership teams, developing effective succession planning and successfully executing organizational change and leadership transition, our results of operations and financial position could be adversely impacted.
The granting of exclusivity impacts our ability to sell those products and brands to other customers and can increase the complexity of our product offerings and our costs. Technology and Intellectual Property Risks We are subject to cybersecurity attacks, which could adversely impact our results of operations and financial position.
The granting of exclusivity impacts our ability to sell those products and brands to other customers and can increase the complexity of our product offerings and our costs. 12 Technology and Intellectual Property Risks We are subject to cybersecurity attacks, which could adversely impact our results of operations and financial position.
We could also be adversely impacted if we have not appropriately prioritized and balanced our strategic initiatives or if we are unable to effectively manage change throughout our organization. We may not be able to successfully execute our acquisition strategy or integrate businesses that we acquire.
We could also be adversely impacted if we have not appropriately prioritized and balanced our strategic initiatives or if we are unable to effectively manage change throughout our organization. 7 We may not be able to successfully execute our acquisition strategy or integrate businesses that we acquire.
A failure or perceived failure by us in this regard may damage our reputation and adversely impact our results of operations and financial position. We face significant competition and operate in an evolving competitive landscape. Our products face significant competition.
A failure or perceived failure by us in this regard may damage our reputation and adversely impact our results of operations and financial position. 11 We face significant competition and operate in an evolving competitive landscape. Our products face significant competition.
International acquisitions that we have made, and those that we may make in the future, may continue to increase our exposure to foreign currency risks, and risks associated with interpretation and enforcement of international regulations and the policies of other governments.
International acquisitions that we have made, and those that we may make in the future, may continue to increase our exposure to foreign currency risks, and risks associated with interpretation, compliance with and enforcement of international regulations and the policies of other governments.
System implementations and upgrades are complex and require significant management oversight, and we have experienced, and in the future experience, unanticipated expenses and interruptions to our operations during these implementations and upgrades.
System implementations and upgrades are complex and require significant management oversight, and we have experienced, and in the future may experience, unanticipated expenses and interruptions to our operations during these implementations and upgrades.
A number of factors impact consumers’ spending on home improvement projects as well as new home construction activity, including: • consumer confidence levels; • consumer income and debt levels; • unemployment and underemployment levels; • the availability of home equity loans and mortgages and the interest rates for and tax deductibility of such loans; • inflationary pressures; • changing government policies and programs; • existing home sales; • age of the housing stock; • fluctuations in home prices; • household formation; • trends in lifestyle and housing design; • the availability of skilled tradespeople for repair and remodeling work; and • natural disasters, terrorist acts, pandemics, wars or conflicts or other catastrophic events.
A number of factors impact consumers’ spending on home improvement projects as well as new home construction activity, including: • consumer confidence levels; • consumer income and debt levels; • unemployment and underemployment levels; • the availability of home equity loans and mortgages and the interest rates for and tax deductibility of such loans; • inflationary pressures; • changing government policies and programs; • existing home sales; • age of the housing stock; • fluctuations in home prices; • household formation; • trends in lifestyle and housing design; • the availability of skilled tradespeople for repair and remodeling work; and • natural disasters, terrorist acts, pandemics, social or civil unrest, wars or conflicts or other catastrophic events.
Business and Operational Risks Variability in the cost and availability of our raw materials, component parts and finished products could impact our results of operations and financial position. We purchase substantial amounts of raw materials, component parts and finished products from outside sources, including international sources, and we manufacture certain of our products outside of the United States.
Business and Operational Risks Variability in the cost and availability of our raw materials, component and finished products could impact our results of operations and financial position. We purchase substantial amounts of raw materials, components and finished products from outside sources, including international sources, and we manufacture certain of our products outside of the United States.
Such events could adversely impact our results of operations and financial position. We rely on information systems and technology, and a breakdown or interruption of these systems could adversely impact our results of operations and financial position. We rely on many on-site and cloud-based information systems and technology to process, transmit, store and manage information to support our business activities.
We rely on information systems and technology, and a breakdown or interruption of these systems could adversely impact our results of operations and financial position. We rely on many on-site and cloud-based information systems and technology to process, transmit, store and manage information to support our business activities.
Risks associated with our international operations include: • differences in culture, economic and labor conditions and practices; • differences in enforcement of contract and intellectual property rights; • differences in the policies of the U.S. and foreign governments; • disruptions in trade relations and economic instability; • natural disasters, terrorist attacks, pandemics, wars or conflicts or other catastrophic events; • social and political unrest; and • timeliness of transportation and port congestion.
Risks associated with our international operations include: • differences in culture, economic and labor conditions and practices; • differences in enforcement of contract and intellectual property rights; • differences in the policies of the U.S. and foreign governments; • disruptions in trade relations and economic instability; • natural disasters, terrorist attacks, pandemics, wars or conflicts or other catastrophic events; • social or civil unrest; and • timeliness of transportation and port congestion or disruption.
There are risks associated with our international operations and global strategies. In 2023, 20 percent of our sales were made outside of North America (particularly in Europe) and transacted in currencies other than the U.S. dollar.
There are risks associated with our international operations and global strategies. In 2024, 20 percent of our sales were made outside of North America (particularly in Europe) and transacted in currencies other than the U.S. dollar.
We have been and may in the future be negatively impacted by adverse changes or uncertainty involving one or more of the factors listed above. We are also affected by domestic and international laws and regulations applicable to companies doing business outside of the U.S., or importing and exporting goods and materials.
We have been and may in the future be negatively impacted by adverse changes or uncertainty involving one or more of the factors listed above. 9 We are also affected by domestic and international laws, regulations and government policies applicable to companies doing business outside of the U.S., or importing and exporting goods and materials.
If we are not able to protect our existing intellectual property rights, or prevent unauthorized use of our intellectual property, sales of our products may be impacted and we may experience reputational damage to our brand names, increased litigation costs and adverse impact to our competitive position, which could adversely impact our results of operations and financial position.
If we are not able to protect our existing intellectual property rights, or prevent unauthorized use of our intellectual property, sales of our products may be impacted and we may experience reputational damage to our brands, increased litigation costs and adverse impact to our competitive position, which could adversely impact our results of operations and financial position.
Furthermore, stakeholders are increasingly scrutinizing companies' environmental, social and governance (“ESG”) practices, and stakeholders’ expectations regarding ESG practices are diverse and rapidly changing. We may not be able to align our ESG practices with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs.
Furthermore, stakeholders are increasingly scrutinizing companies' ESG practices, and stakeholders’ expectations regarding ESG practices are diverse and rapidly changing. We may not be able to align our ESG practices with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs.
Even if we are successful in acquiring businesses, the businesses we acquire may not be able to achieve the revenue, profitability or growth we anticipate, or we may experience challenges and risks in integrating these businesses into our existing business.
Even if we are successful in acquiring businesses, the businesses we acquire may not be able to achieve the revenue, profitability or growth we anticipate, or we may experience challenges and risks in integrating these businesses into our existing business, including our governance and compliance framework.
As our customers execute their strategies to reach end consumers through multiple channels, they rely on us to support their efforts with our infrastructure, including maintaining robust and user-friendly websites with sufficient content for consumer research and providing comprehensive supply chain solutions and differentiated product development.
As our customers execute their strategies to reach end consumers through multiple channels, they rely on us to support their efforts, including by maintaining our own robust and user-friendly websites with sufficient content for consumer research, providing sufficient product data to support their websites and providing comprehensive supply chain solutions and differentiated product development and service offerings.
We are subject to a wide variety of federal, state, local and foreign laws and regulations, including those pertaining to: • anti-bribery/anti-corruption; • climate change and protection of the environment; • competition practices; • data privacy; • employment and labor matters; • environment, health and safety matters; • product safety and performance; • protection of employees and consumers; • securities matters; • sanctions; • taxation; • trade, including duties and tariffs; and • wage and hour matters.
We are subject to a wide variety of federal, state, local and international laws and regulations, including those relating to: • advertising and marketing; • anti-bribery/anti-corruption; • climate change and protection of the environment; • competition; • data privacy; • employment and labor matters, including wage and hour matters; • environment, health and safety matters; • product safety and performance; • protection of employees and consumers; • securities matters; • sanctions; • taxation; and • trade, including duties and tariffs.
Such risks include: 7 • difficulties in retaining critical employees of the acquired businesses; • difficulties realizing expected synergies and economies of scale; • diversion of management attention and our resources; • issues or conflicts with our new or existing customers or suppliers; and • unforeseen liabilities.
Such risks include: • diversion of management attention and our resources; • issues or conflicts with our new or existing customers or suppliers; • realizing expected synergies and economies of scale; • retaining key employees of the acquired businesses; and • unforeseen liabilities.
In addition, we may not be able to achieve our aspirational goals related to our ESG initiatives, which are and may continue to be impacted by many complexities and variables, such as renewable energy infrastructure and availability, changes to the labor market, a challenging economic environment, changes to our operations, changes to our portfolio of businesses via acquisitions or divestitures, and adjustments to our job levels and managerial headcount.
In addition, we may not be able to achieve our aspirational goals related to our ESG initiatives, which are and may continue to be impacted by many complexities and variables, such as renewable energy infrastructure and availability, a challenging economic environment, changes to our operations and changes to our portfolio of businesses via acquisitions or divestitures.
Consumer preferences are also changing, including a continued shift in consumer purchasing practices toward e-commerce and a potential increase in consumer demand for products with certain attributes, such as connected products and sustainable products.
Consumer preferences have also changed, including a shift in consumer purchasing practices toward e-commerce and a potential increase in consumer demand for products with certain attributes, such as connected products and sustainable products.
Our results of operations and financial position, as well as the effectiveness of our internal controls over financial reporting, could be adversely impacted if we do not appropriately select, implement, maintain or upgrade our critical systems in a timely manner or if we experience significant unanticipated expenses or disruptions in connection with the implementation, upgrade or update of such systems.
Our results of operations and financial position, as well as the effectiveness of our internal controls over financial reporting, could be adversely impacted if we do not appropriately select, implement, maintain or upgrade our critical systems in a timely manner or if we experience significant unanticipated expenses or disruptions in connection with the implementation, upgrade or update of such systems. 13 We may not be able to adequately protect or prevent the unauthorized use of our intellectual property.
If we do not timely and effectively identify and respond to these changes our relationships with our customers and with consumers could be harmed, our ability to retain our customers and consumers may be negatively impacted, the demand for our brands and products could be reduced and our results of operations and financial position could be adversely impacted.
If we do not timely and effectively implement our strategic and business initiatives related to these practices and preferences or identify and adequately respond to new changes, our relationships with our customers and with consumers could be harmed, our ability to retain our customers and consumers may be negatively impacted, the demand for our brands and products could be reduced and our results of operations and financial position could be adversely impacted.
These attacks could have the following impacts on our business, some of which we have experienced: • business interruption; • damage to our relationships with our employees, suppliers, customers and consumers; • damage to the reputation of our brands; • data corruption; • exposure or loss of proprietary confidential or financial information or the personal information of our employees, suppliers, customers or consumers; • exposure to litigation; • inability to report our financial results in a timely manner; • increased costs associated with the remediation and mitigation of such attacks; • product shipment delays; • production or operational downtime; and • theft of our assets. 12 In addition, we could be adversely impacted if any of our significant customers, suppliers or service providers experiences any similar events that disrupt their business operations or damage their reputation.
These attacks could have the following impacts on our business, some of which we have experienced: • business interruption; • damage to our relationships with our employees, suppliers, customers and consumers; • damage to the reputation of our brands; • data corruption; • exposure or loss of proprietary confidential or financial information or the personal information of our employees, suppliers, customers or consumers; • exposure to litigation; • inability to report our financial results in a timely manner; • increased costs associated with the remediation and mitigation of such attacks; • product shipment delays; • production or operational downtime; and • theft of our assets.
If the products we introduce do not gain widespread acceptance or if our competitors improve their products more rapidly or effectively than we do, we could lose market share or be required to reduce our prices, which could adversely impact our results of operations and financial position. 10 In recent years, consumer purchasing practices and preferences have shifted and our customers’ business models and strategies have changed.
If the products we introduce do not gain widespread acceptance or if our competitors improve their products more rapidly or effectively than we do, we could lose market share or be required to reduce our prices, which could adversely impact our results of operations and financial position. Our customers’ business models and strategies continue to change.
From time to time we enter into long-term agreements with certain significant suppliers to help ensure continued availability of the commodities we require to produce our products and to establish firm pricing, but these contractual commitments may result in our paying above market prices for commodities during the term of the contract.
From time to time we enter into long-term agreements with certain significant suppliers to help ensure continued availability of the raw materials, components and finished products we require and to establish firm pricing, but these contractual commitments may result in our paying above market prices during the term of the contract and may limit our ability to adjust our sourcing partners in the future.
These include anti-bribery/anti-corruption laws, laws regulating competition, sanctions, tax laws, trade regulations, including duties and tariffs, and other business practices. Compliance with these laws is costly, and future changes to these laws may require significant management attention and disrupt our operations.
These include laws and regulations related to anti-bribery/anti-corruption, competition, data privacy, environmental, social and governance (“ESG”) matters, sanctions, tax, trade, including duties and tariffs, and other business practices. Compliance with these laws, regulations and government policies is costly, and future changes to these laws may require significant management attention and disrupt our operations.
In the past, we have been able to amend the covenants in our credit agreement, but there can be no assurance that in the future we would be able to further amend them. If we were unable to borrow under our credit agreement, our financial flexibility could be restricted.
In the past, we have been able to amend the covenants in our credit agreement, but there can be no assurance that in the future we would be able to further amend them.
Our initiatives to invest in brand building, brand awareness and product innovation may not be successful. The uncertainties associated with developing and introducing innovative and improved products, such as gauging changing consumer demands and preferences and successfully developing, manufacturing, marketing, selling and servicing these products, may impact the success of our product introductions.
The uncertainties associated with developing and introducing innovative new and improved products, such as gauging changing consumer demands and preferences and successfully developing, manufacturing, marketing, selling and servicing these products, may impact the success of our product introductions.
These factors have impacted and could in the future impact our results of operations and financial position. In addition, our relationships with our customers, including our home center customers, may be impacted if we increase the amount of business we transact in the e-commerce channel.
In addition, our relationships with our customers, including home center retailers, may be impacted if we increase the amount of business we transact in the e-commerce channel. If we are unable to maintain our competitive position in our industries, our results of operations and financial position could be adversely impacted.
Unfavorable currency exchange rates, particularly the euro, the Chinese renminbi, the Canadian dollar, the British pound sterling and the Mexican peso, have in the past adversely impacted us, and could adversely impact us in the future.
Unfavorable currency exchange rates, particularly the euro, the Chinese renminbi, the Canadian dollar, the British pound sterling and the Mexican peso, have in the past adversely impacted us, and could adversely impact us in the future. Fluctuations in currency exchange rates may also present challenges in comparing our operating performance from period to period.
Further, our production has been and may in the future be impacted if we or our suppliers are unable to procure our requirements for various commodities, including, among others, brass, resins, titanium dioxide and zinc, or if a shortage of these commodities results in significantly increased costs.
Further, our production has been and may in the future be impacted if we or our suppliers are unable to procure our requirements for various raw materials, including, among others, brass, copper, resins, titanium dioxide and zinc. Elevated energy prices have increased and may in the future increase our production and transportation costs.
If we are not able to sufficiently increase the prices of our products or achieve cost savings to offset increased material, production, transportation and labor costs, our results of operations and financial position could be adversely impacted.
Our existing arrangements with customers, competitive considerations and customer resistance to price increases may delay or make us unable to adjust selling prices. If we are not able to sufficiently increase the prices of our products or achieve cost savings to offset increased material, production, transportation and labor costs, our results of operations and financial position could be adversely impacted.
Current and former employees, contractors, customers or suppliers have or may have had access to proprietary or confidential information regarding our business operations that could harm us if used by them, or disclosed to others, including our competitors. Protecting and preventing the unauthorized use of our intellectual property is costly, time consuming and require significant resources.
Furthermore, others have asserted and may in the future assert intellectual property infringement claims against us. Current and former employees, contractors, customers or suppliers have or may have had access to proprietary or confidential information regarding our business operations that could harm us if used by them, or disclosed to others, including our competitors.
For our businesses to be successful, we must invest significant resources to attract, develop and retain highly qualified, talented and diverse employees, who have the experience, knowledge and expertise to implement our strategic and business initiatives. We compete for employees with a broad range of employers in many different industries, including large multinational firms.
The long-term performance of our businesses relies on our ability to attract, develop and retain a talented and diverse workforce. For our businesses to be successful, we must invest significant resources to attract, develop and retain highly qualified, talented and diverse employees, who have the experience, knowledge and expertise to implement our strategic and business initiatives.
We may be adversely impacted if these information systems breakdown, fail, or are no longer supported by third-party service providers, including cloud platform providers.
We may be adversely impacted if these information systems breakdown, fail, or if delays in system upgrades or replacements stretch those systems beyond support by third-party service providers, including cloud platform providers.
We may not be able to adequately protect or prevent the unauthorized use of our intellectual property. Protecting our intellectual property is important to our growth and innovation efforts. We own a number of patents, trade names, brand names and other forms of intellectual property in our products and manufacturing processes throughout the world.
Protecting our intellectual property is important to our growth and innovation efforts. We own a number of patents, trademarks and other forms of intellectual property in our products and manufacturing processes throughout the world. There can be no assurance that our efforts to protect our intellectual property rights will prevent violations.
In addition, we face competitive pricing pressure in the marketplace, including sales promotion programs, that could impact our market share or result in price reductions, which could adversely impact our results of operations and financial position. 11 The growing e-commerce channel brings an increased number of competitors and greater pricing transparency for consumers, as well as conflicts between our existing distribution channels and a need for different distribution methods.
The growing e-commerce channel brings an increased number of competitors and greater pricing transparency for consumers, as well as conflicts between our existing distribution channels and a need for different distribution methods. These factors have impacted and could in the future impact our results of operations and financial position.
Competitive Risks We could lose market share if we do not maintain our strong brands, develop innovative products or respond to changing consumer purchasing practices and preferences. Our competitive advantage is due, in part, to our ability to maintain our strong brands and to develop and introduce innovative new and improved products.
If we were unable to borrow under our credit agreement, our financial flexibility could be restricted. 10 Competitive Risks We could lose market share if we do not maintain our strong brands, develop innovative products or respond to changing consumer purchasing practices and preferences.
If any significant accident, judgment, claim or other event is not fully insured or indemnified against, it could adversely impact our results of operations and financial position. Refer to Note T to the consolidated financial statements included in Item 8 of this Report for additional information about litigation involving our businesses.
If any significant accident, judgment, claim or other event is not fully insured or indemnified against, it could adversely impact our results of operations and financial position.
In 2023, our net sales to The Home Depot were $3.1 billion (approximately 39 percent of our consolidated net sales), and our net sales to Ferguson and Lowe’s were each less than 10 percent of our consolidated net sales.
Our sales are concentrated with three significant customers and this concentration may continue to increase. In 2024, our net sales to The Home Depot were $3.0 billion (approximately 38 percent of our consolidated net sales), and our net sales to Ferguson and Lowe’s were each less than 10 percent of our consolidated net sales.
We have faced and may continue to face challenges in recruiting, developing, motivating and retaining employees, particularly when the labor market is experiencing low unemployment levels, increasing compensation and increasing competition.
We compete for employees with a broad range of employers in many different industries, including large multinational firms. We have faced and may in the future face challenges in recruiting, developing, engaging and retaining employees, particularly when the labor market is experiencing low unemployment levels, increasing compensation and increasing competition.
There can be no assurance that our efforts to protect our intellectual property rights will prevent violations. Our intellectual property has been and may again be challenged or infringed upon by third parties, particularly in countries where property rights are not highly developed or protected.
Our intellectual property has been and may again be challenged or infringed upon by third parties, particularly in countries where property rights are not highly developed or protected. In addition, the global nature of our business increases the risk that we may be unable to obtain or maintain our intellectual property rights on reasonable terms.
This strategy increases the possibility that we may make commitments for these commodities at prices that subsequently exceed their market prices, which has occurred and could occur in the future has had and may in the future have an adverse impact on our results of operations and financial position. We are dependent on suppliers and service providers.
In addition, we may use derivative instruments, including commodity hedges. This strategy increases the possibility that we may forego the benefits that might result from favorable fluctuations in prices, which has had and may in the future have an adverse impact on our results of operations and financial position. 8 We are dependent on suppliers and service providers.
Our failure to comply with laws, government regulations and other requirements could adversely impact our results of operations and financial position.
Refer to Note R to the consolidated financial statements included in Item 8 of this Report for additional information about litigation involving our businesses. 14 Our failure to comply with laws, government regulations and other requirements could adversely impact our results of operations and financial position.
Energy prices have also increased and, this coupled with potential energy supply shortages, has resulted in increased production and transportation costs, which may continue in the future. In addition, water is a significant component of our architectural coatings products and may be subject to shortages and restrictions on supply in certain regions, due to climate-related and other influences.
In addition, water is a significant component of our architectural coatings products and may be subject to shortages and restrictions on supply in certain regions, due to climate-related and other influences. These factors could adversely impact our results of operations and financial position. It can be difficult for us to pass our cost increases on to our customers.
Removed
These factors could adversely impact our results of operations and financial position. It can be difficult for us to pass our cost increases on to our customers. Our existing arrangements with customers, competitive considerations and customer resistance to price increases may delay or make us unable to adjust selling prices.
Added
Failure of our suppliers to timely provide us goods and services on commercially reasonable terms or to comply with applicable contractual, legal and regulatory requirements or our supplier business practices policy could have an adverse impact on our results of operations and financial position or could damage our reputation.
Removed
Occasionally, we may also use derivative instruments, including commodity futures and swaps.
Added
Our competitive advantage is due, in part, to our ability to maintain our strong brands and to develop and introduce innovative new and improved products. Our initiatives to invest in brand building, brand awareness and product innovation may not be successful.
Removed
Fluctuations in currency exchange rates may also present challenges in comparing our operating performance from period to period. 9 The long-term performance of our businesses relies on our ability to attract, develop and retain a talented and diverse workforce.
Added
In addition, we face competitive pricing pressure in the marketplace, including sales promotion programs, that could impact our market share or result in price reductions, which could adversely impact our results of operations and financial position.
Removed
If we are unable to maintain our competitive position in our industries, our results of operations and financial position could be adversely impacted. Our sales are concentrated with three significant customers and this concentration may continue to increase.
Added
In addition, we could be adversely impacted if any of our significant customers, suppliers or service providers experiences any similar events that disrupt their business operations or damage their reputation. Such events could adversely impact our results of operations and financial position.
Removed
In addition, the global nature of our business increases the risk that we may be unable to obtain or maintain our intellectual property rights on reasonable terms. Furthermore, others have asserted and may in the future assert intellectual property infringement claims against us.
Added
Protecting and preventing the unauthorized use of our intellectual property is costly, time consuming and requires significant resources.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Incident Response Plan, developed by management, governs our process to respond to, remediate and resolve material cybersecurity incidents, including providing appropriate internal and external communication of such incidents. 15 At least annually, our Vice President, Information Technology discusses with our Board a report on cybersecurity, including an update regarding our cybersecurity risks, mitigation activities and industry developments.
Biggest changeOur Incident Response Plan and attendant processes, developed by management, governs our process to respond to, remediate and resolve material cybersecurity incidents, including providing appropriate internal and external communication of such incidents. At least annually, our Vice President, Information Technology discusses with our Board a report on cybersecurity, including an update regarding our cybersecurity risks, mitigation activities and industry developments.
Key components of our cybersecurity program include: • an enterprise organizational framework that consists of enterprise leaders that oversee our cybersecurity governance, including policies and standards, and functional business unit leaders that implement our cybersecurity policies; • the identification of our cybersecurity risks and vulnerabilities and the implementation of protections against cybersecurity threats and incidents, including regular training to our employees; • continual global threat monitoring and detection, in partnership with third-party service providers; • a process for assessing the severity of cybersecurity threats, identifying whether the cybersecurity threats are associated with a third-party service provider, and implementing an appropriate response and resolution to cybersecurity incidents, as necessary; and • risk-based cybersecurity audits led by our internal audit function, which include cybersecurity control maturity assessments (based on NIST CSF), as well as attack simulations and penetration testing performed by third-party service providers.
Key components of our cybersecurity program include: • an enterprise organizational framework that consists of enterprise leaders that oversee our cybersecurity governance, including policies and standards, and functional business unit leaders that implement our cybersecurity policies; • the identification of our cybersecurity risks and vulnerabilities and the implementation of protections against cybersecurity threats and incidents, including regular training to our employees; • continual global threat monitoring and detection, in partnership with third-party service providers; 15 • a process for assessing the severity of cybersecurity threats, identifying whether the cybersecurity threats are associated with a third-party service provider, and implementing an appropriate response and resolution to cybersecurity incidents, as necessary; and • risk-based cybersecurity audits led by our internal audit function, which include cybersecurity control maturity assessments (based on NIST CSF), as well as attack simulations and penetration testing performed by third-party service providers.
Our Vice President, Information Technology has significant professional experience in leading the information technology function and our Director, Enterprise Security has held various roles in cybersecurity and is an ISC2 Certified Information Security Professional (CISSP ® ). Each periodically participates in various industry cyber forums and communicates industry best practices to the appropriate internal information security professionals.
Our Vice President, Information Technology has significant professional experience in leading the information technology function and our Director, Cybersecurity has held various roles in cybersecurity and is an ISC2 Certified Information Security Professional (CISSP ® ). Each periodically participates in various industry cyber forums and communicates industry best practices to the appropriate internal information security professionals.
For more information about these risks, please see “Risk Factors – We are subject to cybersecurity attacks, which could adversely impact our results of operations and financial position” in this annual report on Form 10-K.
For more information about these risks, please see “Risk Factors – We are subject to cybersecurity attacks, which could adversely impact our results of operations and financial position” in this annual report on Form 10-K. 16
In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
Management is responsible for identifying and assessing material cybersecurity risks on an ongoing basis and for developing, managing and implementing our cybersecurity program to assure that our potential cybersecurity risk exposures are monitored and appropriate mitigation measures are implemented. Our cybersecurity program is overseen by our Vice President, Information Technology and our Director, Enterprise Security.
Management is responsible for identifying and assessing material cybersecurity risks on an ongoing basis and for developing, managing and implementing our cybersecurity program to assure that our potential cybersecurity risk exposures are monitored and appropriate mitigation measures are implemented. Our cybersecurity program is overseen by our Vice President, Information Technology and our Director, Cybersecurity.
In 2023, as part of our enterprise risk management update to our Board, our Vice President, Information Technology discussed risks and trends associated with information technology, including cyber-attacks, and current and future planned actions to mitigate such risks.
In 2024, as part of our enterprise risk management update to our Board, our Vice President, Information Technology discussed risks and trends associated with information technology, including cyber-attacks, and current and future planned actions to mitigate such risks.
In addition, in 2023, our Vice President, Information Technology reviewed with our Board updates related to our operational and resource readiness with respect to cyber incidents, our incident response processes and emerging cybersecurity risks.
In addition, in 2024, our Vice President, Information Technology reviewed with our Board updates related to our operational and resource readiness with respect to cyber incidents, our incident response processes and emerging cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. The table below lists principal North American properties as of December 31, 2023. Business Segment Manufacturing Warehouse and Distribution Plumbing Products 22 10 Decorative Architectural Products 8 17 Totals 30 27 Most of our North American facilities range from single warehouse buildings to complex manufacturing facilities.
Biggest changeItem 2. Properties. The table below lists the number of principal North American properties as of December 31, 2024. Business Segment Manufacturing Warehouse and Distribution Plumbing Products 24 10 Decorative Architectural Products 9 14 Totals 33 24 Most of our North American facilities range from single warehouse buildings to complex manufacturing facilities.
Each of our operating divisions assesses the manufacturing, distribution and other facilities needed to meet its operating requirements. We regularly review our anticipated requirements for facilities and, on the basis of that review, have and may in the future, build, acquire or lease additional facilities, or expand additional facilities.
Each of our operating divisions assesses the manufacturing, distribution and other facilities needed to meet its operating requirements. We regularly review our anticipated requirements for facilities and, on the basis of that review, have and may in the future, build, acquire or lease additional facilities, or expand existing facilities.
We own most of our North American manufacturing facilities, none of which is subject to significant encumbrances. A substantial number of our warehouse and distribution facilities are leased. The table below lists principal properties outside of North America as of December 31, 2023.
We own most of our North American manufacturing facilities, none of which is subject to significant encumbrances. A substantial number of our warehouse and distribution facilities are leased. The table below lists the number of principal properties outside of North America as of December 31, 2024.
Business Segment Manufacturing Warehouse and Distribution Plumbing Products 12 17 Decorative Architectural Products — — Totals 12 17 Most of our international facilities are in Europe and China. We own most of our international manufacturing facilities, none of which is subject to significant encumbrances. A substantial number of our international warehouse and distribution facilities are leased.
Business Segment Manufacturing Warehouse and Distribution Plumbing Products 12 15 Decorative Architectural Products — — Totals 12 15 Most of our international facilities are in Europe and China. We own most of our international manufacturing facilities, none of which is subject to significant encumbrances. A substantial number of our international warehouse and distribution facilities are leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod 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 10/1/23 - 10/31/23 505,966 $ 51.49 505,966 $ 1,847,945,558 11/1/23 - 11/30/23 2,061,426 $ 57.25 2,061,426 $ 1,729,925,568 12/1/23 - 12/31/23 1,274,183 $ 65.15 1,274,183 $ 1,646,913,344 Total for the quarter 3,841,575 $ 59.11 3,841,575 $ 1,646,913,344 17 Performance Graph The table below compares the cumulative total shareholder return on our common stock with the cumulative total return of (i) the Standard & Poor's 500 Composite Stock Index ("S&P 500 Index"), (ii) The Standard & Poor's Industrials Index ("S&P Industrials Index") and (iii) the Standard & Poor's Consumer Durables & Apparel Index ("S&P Consumer Durables & Apparel Index"), from December 31, 2018 through December 31, 2023, when the closing price of our common stock was $66.98.
Biggest changePeriod 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 10/1/24 - 10/31/24 1,069,651 $ 83.45 1,069,651 $ 1,075,395,662 11/1/24 - 11/30/24 1,090,788 $ 79.42 1,090,788 $ 988,760,389 12/1/24 - 12/31/24 1,179,967 $ 78.32 1,179,967 $ 896,349,195 Total for the quarter 3,340,406 $ 80.32 3,340,406 $ 896,349,195 18 Performance Graph The table below compares the cumulative total shareholder return on our common stock with the cumulative total return of (i) the Standard & Poor's 500 Composite Stock Index ("S&P 500 Index"), (ii) The Standard & Poor's Industrials Index ("S&P Industrials Index") and (iii) the Standard & Poor's Consumer Durables & Apparel Index ("S&P Consumer Durables & Apparel Index"), from December 31, 2019 through December 31, 2024, when the closing price of our common stock was $72.57.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The New York Stock Exchange is the principal market on which our common stock is traded, under the ticker symbol MAS. On January 31, 2024, there were approximately 2,500 holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The New York Stock Exchange is the principal market on which our common stock is traded, under the ticker symbol MAS. On January 31, 2025, there were approximately 2,400 holders of record of our common stock.
The graph assumes investments of $100 on December 31, 2018 in our common stock and in each of the three indices and the reinvestment of dividends.
The graph assumes investments of $100 on December 31, 2019 in our common stock and in each of the three indices and the reinvestment of dividends.
The following table provides information regarding the repurchase of our common stock for the three-month period ended December 31, 2023.
The following table provides information regarding the repurchase of our common stock for the three-month period ended December 31, 2024.
We repurchased and retired 6.2 million shares of our common stock for the year ended December 31, 2023 for approximately $356 million, inclusive of excise tax of $3 million. This included 0.2 million shares to offset the dilutive impact of restricted stock units granted in 2023. At December 31, 2023, we had $1.6 billion remaining under the 2022 authorization.
We repurchased and retired 10.0 million shares of our common stock for the year ended December 31, 2024 for approximately $757 million, inclusive of excise tax of $6 million. This included 0.5 million shares to offset the dilutive impact of restricted stock units granted in 2024. At December 31, 2024, we had $896 million remaining under the 2022 authorization.
The Board of Directors declared a quarterly dividend of $0.29 per share in the first quarter of 2024 with the intention to increase the annual dividend 2 percent to $1.16 per share.
The Board of Directors declared a quarterly dividend of $0.31 per share in the first quarter of 2025 with the intention to increase the annual dividend 7 percent to $1.24 per share.
The table below sets forth the value, as of December 31 for each of the years indicated, of a $100 investment made on December 31, 2018 in each of our common stock, the S&P 500 Index, the S&P Industrials Index and the S&P Consumer Durables & Apparel Index and includes the reinvestment of dividends. 2019 2020 2021 2022 2023 Masco $ 164.12 $ 187.86 $ 240.15 $ 159.61 $ 229.07 S&P 500 Index $ 128.88 $ 149.83 $ 190.13 $ 153.16 $ 190.27 S&P Industrials Index $ 126.83 $ 138.25 $ 165.07 $ 153.35 $ 177.94 S&P Consumer Durables & Apparel Index $ 132.28 $ 156.63 $ 189.42 $ 131.58 $ 153.72
The table below sets forth the value, as of December 31 for each of the years indicated, of a $100 investment made on December 31, 2019 in each of our common stock, the S&P 500 Index, the S&P Industrials Index and the S&P Consumer Durables & Apparel Index and includes the reinvestment of dividends. 2020 2021 2022 2023 2024 Masco $ 114.46 $ 146.32 $ 97.25 $ 139.57 $ 151.22 S&P 500 Index $ 116.26 $ 147.52 $ 118.84 $ 147.64 $ 182.05 S&P Industrials Index $ 109.01 $ 130.16 $ 120.91 $ 140.30 $ 162.25 S&P Consumer Durables & Apparel Index $ 118.41 $ 143.20 $ 99.47 $ 116.21 $ 108.09

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOperating Profit Below is a summary of our operating profit, in millions, and operating profit margins for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Change Operating profit, as reported $ 1,348 $ 1,297 $ 51 Rationalization charges 13 32 (19) Impairment charges for goodwill and other intangible assets 15 26 (11) Insurance settlement (40) — (40) Operating profit, excluding rationalization charges, impairment charges and insurance settlement $ 1,336 $ 1,355 $ (19) Operating profit margin, as reported 16.9 % 14.9 % 200 bps Operating profit margin, excluding rationalization charges, impairment charges and insurance settlement 16.8 % 15.6 % 120 bps Our 2023 operating profit was positively impacted by: • Higher net selling prices. • Cost savings initiatives. • Lower transportation costs. • Receipt of an insurance settlement payment. • Lower excess and obsolete inventory charges. • Lower goodwill and other intangible assets impairment charges in our lighting business.
Biggest changeRESULTS OF OPERATIONS Below is a summary of our results of operations, dollars in millions, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Change Net sales $ 7,828 $ 7,967 (2) % Cost of sales (4,997) (5,131) (3) % Gross profit $ 2,831 $ 2,836 — % Gross margin 36.2 % 35.6 % 60 bps Selling, general and administrative expenses $ (1,468) $ (1,473) — % Selling, general and administrative expenses of a percent of net sales (18.8) % (18.5) % (30) bps Impairment charge for other intangible assets $ — $ (15) (100) % Operating profit, as reported $ 1,363 $ 1,348 1 % Rationalization charges 9 13 (31) % Impairment charge for other intangible assets — 15 (100) % Insurance settlement — (40) (100) % Operating profit, excluding rationalization charges, impairment charge, and insurance settlement $ 1,372 $ 1,336 3 % Operating profit margin, as reported 17.4 % 16.9 % 50 bps Operating profit margin, excluding rationalization charges, impairment charge, and insurance settlement 17.5 % 16.8 % 70 bps 21 Our gross profit for 2024 was $2,831 million, which remained flat compared to 2023.
See Note K to the 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.
See Note K to the consolidated financial statements for additional information. 24 The 2022 Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0.
We were in compliance with all covenants and no borrowings were outstanding under our 2022 Credit Agreement as of December 31, 2023. Short-term Borrowings On May 9, 2023, our Hansgrohe SE subsidiary entered into €70 million ($77 million) of short-term borrowings to support working capital needs.
We were in compliance with all covenants and no borrowings were outstanding under our 2022 Credit Agreement as of December 31, 2024. Short-term Borrowings On May 9, 2023, our Hansgrohe SE subsidiary entered into €70 million ($77 million) of short-term borrowings to support working capital needs.
Consistent with past practice and as part of our long-term capital allocation strategy, outside of any potential acquisitions, we anticipate using approximately $600 million of cash for share repurchases (including shares which will be purchased to offset any dilution from restricted stock units granted as part of our compensation programs) in 2024.
Consistent with past practice and as part of our long-term capital allocation strategy, outside of any potential acquisitions, we anticipate using approximately $600 million of cash for share repurchases (including shares which will be purchased to offset any dilution from restricted stock units granted as part of our compensation programs) in 2025.
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 December 31, 2023 and 2022, $323 million and $321 million, respectively, was held in our foreign subsidiaries.
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 December 31, 2024 and 2023, $321 million and $323 million, respectively, was held in our foreign subsidiaries.
In the fourth quarter of 2023, 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.
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 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 9.50 percent as the basis to determine the discount rate to apply to the estimated future cash flows.
We also consider the profitability of the business, among other factors, to determine the royalty rate for use in the impairment assessment. We utilize our weighted average cost of capital of approximately 8.50 percent as the basis to determine the discount rate to apply to the estimated future cash flows.
We continue to leverage the Masco Operating System, our approach to drive growth and productivity, and continuous improvement initiatives across our enterprise to identify additional opportunities to improve our business operations.
We continue to leverage the Masco Operating System, our methodology to drive growth and productivity, and continuous improvement initiatives across our enterprise to identify additional opportunities to improve our business operations.
We utilize our weighted average cost of capital of approximately 9.50 percent as the basis to determine the discount rate to apply to the estimated future cash flows.
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.
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 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.
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. We repurchased and retired 6.2 million shares of our common stock in 2023 for approximately $356 million, inclusive of excise tax of $3 million.
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. We repurchased and retired 10.0 million shares of our common stock in 2024 for approximately $757 million, inclusive of excise tax of $6 million.
We had cash and cash investments of approximately $634 million and $452 million at December 31, 2023 and 2022, 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.
We had cash and cash investments of approximately $634 million at both December 31, 2024 and 2023. 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.
Refer to Note R to the consolidated financial statements for additional information.
Refer to Note N to the consolidated financial statements for additional information.
In 2023, 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 12.25 percent to 14.50 percent for our other indefinite-lived intangible assets.
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.
Our assumptions included U.S. and Eurozone Gross Domestic Product both growing at approximately 1.0 percent in 2024, and 2.0 percent and 1.5 percent, respectively, per annum over the remainder of the five-year forecast.
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.
The amounts confirmed as valid under the program and included in accounts payable were $53 million and $50 million at December 31, 2023 and 2022, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $28 million and $29 million at December 31, 2023 and 2022, respectively.
The amounts confirmed as valid under the program and included in accounts payable were $36 million and $53 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 $23 million and $28 million at December 31, 2024 and 2023, respectively.
INCOME TAXES Below is a summary of our income tax expense, in millions, and our effective tax rate for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Income tax expense $ (278) $ (288) $ 10 Effective tax rate (22) % (24) % 2 % Our 2023 income tax expense included a $29 million state income tax benefit, net of federal expense, from the recognition of certain state deferred tax assets due to a legal restructuring of certain U.S. businesses that will occur in early 2024.
INCOME TAXES Below is a summary of our income tax expense, in millions, and our effective tax rate for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Income tax expense $ (287) $ (278) (3) % Effective tax rate (25) % (22) % (300) bps Our 2023 income tax expense included a $29 million state income tax benefit, net of federal expense, from the recognition of certain state deferred tax assets due to a legal restructuring of certain U.S. businesses that occurred in early 2024.
NET INCOME AND INCOME PER COMMON SHARE - ATTRIBUTABLE TO MASCO CORPORATION Below is a summary of our net income, in millions, and diluted income per common share for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Net income $ 908 $ 844 $ 64 Diluted income per common share $ 4.02 $ 3.63 $ 0.39 22 Business Segment and Geographic Area Results The following table sets forth our net sales and operating profit information by Business Segment and Geographic Area, dollars in millions.
NET INCOME AND INCOME PER COMMON SHARE - ATTRIBUTABLE TO MASCO CORPORATION Below is a summary of our net income, in millions, and diluted income per common share for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Net income $ 822 $ 908 (9) % Diluted income per common share $ 3.76 $ 4.02 (6) % 22 Business Segment Results The following table sets forth our net sales and operating profit information by Business Segment, dollars in millions.
We have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. While still elevated, we have recently seen some reduction of certain costs, and we aim to offset the potential unfavorable impact of our costs and lower demand for our products with productivity improvement, pricing, and other initiatives.
We also have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. We aim to offset the potential unfavorable impact of our elevated costs and lower demand for our products with productivity improvements, pricing, and other initiatives.
This included 0.2 million shares to offset the dilutive impact of restricted stock units granted in 2023. At December 31, 2023, we had $1.6 billion remaining under the 2022 authorization.
This included 0.5 million shares to offset the dilutive impact of restricted stock units granted in 2024. At December 31, 2024, we had $896 million remaining under the 2022 authorization.
(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.
(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.
These amounts were partially offset by higher net selling prices, which increased sales by two percent.
These amounts were partially offset by higher net selling prices of plumbing products which increased sales by one percent.
Refer to Note K to the consolidated financial statements for additional information. 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 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.
A detailed discussion of our consolidated, Business Segment and Geographic Area results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found under “Item 7.
We discuss our consolidated results as well as our Business Segment results of operations for the year ended December 31, 2024 versus December 31, 2023. A detailed discussion of our consolidated and Business Segment results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under “Item 7.
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.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 9, 2023. 19 SALES AND OPERATIONS Net Sales Below is a summary of our net sales, in millions, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Change Net sales, as reported $ 7,967 $ 8,680 $ (713) Acquisitions (28) — (28) Net sales, excluding acquisitions 7,939 8,680 (741) Currency translation 8 — 8 Net sales, excluding acquisitions and the effect of currency translation $ 7,947 $ 8,680 $ (733) Our net sales for 2023 were $7,967 million, which decreased eight percent compared to 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 8, 2024. 20 NET SALES Below is a summary of our net sales, in millions, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Change Net sales, as reported $ 7,828 $ 7,967 (2) % Acquisitions (58) — Divestitures — (72) Net sales, excluding acquisitions and divestitures 7,770 7,895 (2) % Currency translation 32 — Net sales, excluding acquisitions, divestitures and the effect of currency translation $ 7,802 $ 7,895 (1) % Our net sales for 2024 were $7,828 million, which decreased two percent compared to 2023.
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.
Refer to Note M to the consolidated financial statements for defined-benefit pension plan obligations. 28 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.
This determination is updated each reporting period. 29 Goodwill and Other Intangible Assets We record the excess of purchase cost over the fair value of net tangible assets of acquired companies as goodwill or other identifiable intangible assets.
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 estimating future cash flows, we rely on internally generated five-year forecasts for sales and operating profits, and, currently, a two percent to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast.
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.
Amounts include finance lease obligations. (B) Excludes contracts that do not require volume commitments and open or pending purchase orders.
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.
Cash Flows Significant sources and (uses) of cash for the years ended December 31, 2023 and 2022 are summarized as follows, in millions: 2023 2022 Net cash from operating activities $ 1,413 $ 840 Purchase of Company common stock (353) (914) Cash dividends paid (257) (258) Dividends paid to noncontrolling interest (49) (68) Proceeds from short-term borrowings 77 — Payment of short-term borrowings (77) — Proceeds from term loan — 500 Payment of term loan (200) (300) Proceeds from the exercise of stock options 38 1 Employee withholding taxes paid on stock-based compensation (29) (17) Payment of debt (5) (10) Capital expenditures (243) (224) Acquisition of business, net of cash acquired (136) — Effect of exchange rate changes on cash and cash investments 6 (18) Other, net (4) (6) Cash increase (decrease) $ 182 $ (474) Our working capital days were as follows: At December 31, 2023 2022 Receivable days 52 53 Inventory days 77 80 Accounts payable days 70 68 Working capital (receivables plus inventories, less accounts payable) as a percentage of net sales 16.0 % 17.4 % 27 Operating Activities Net cash provided by operations was $1,413 million, primarily driven by operating profit and changes in working capital, mostly attributable to lower inventory.
We currently do not have any derivative instruments for which we have designated hedge accounting. 26 Cash Flows Significant sources and (uses) of cash for the years ended December 31, 2024 and 2023 are summarized as follows, in millions: 2024 2023 Net cash from operating activities $ 1,075 $ 1,413 Purchase of Company common stock (751) (353) Excise tax paid on the purchase of Company common stock (3) — Cash dividends paid (254) (257) Purchase of redeemable noncontrolling interest (15) — Dividends paid to noncontrolling interest (37) (49) Proceeds from short-term borrowings — 77 Payment of short-term borrowings — (77) Payment of term loan — (200) Proceeds from the exercise of stock options 79 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 disposed 126 — 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.
As of December 31, 2023, the impaired other indefinite-lived intangible asset had a remaining net carrying value of $28 million. A 10 percent decrease in the estimated fair value of our other indefinite-lived intangibles assets would have resulted in a $2 million impairment for another one of our other indefinite-lived intangible assets. Refer to Note H for additional information.
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.
Excluding acquisitions and the effect of currency translation, net sales decreased eight percent. Our net sales for 2023 decreased primarily due to: • Lower sales volume across the entire company which decreased sales by 11 percent. • Unfavorable sales mix of plumbing products which decreased sales by one percent.
Excluding acquisitions, divestitures, and the effect of currency translation, net sales decreased one percent. Our net sales for 2024 decreased primarily due to lower sales volume of North America plumbing products, lower net selling prices of decorative architectural products, and unfavorable sales mix of plumbing products which each decreased sales by one percent.
Capital Expenditures We continue to invest in our manufacturing and distribution operations to increase our productivity, improve customer service and support product innovation. Capital expenditures for 2023 were $243 million, compared with $224 million for 2022. The increase in capital expenditures in 2023 was primarily due to capacity expansion plans in our Plumbing Products and Decorative Architectural Products segments.
Capital Expenditures We continue to invest in our manufacturing and distribution operations to increase our productivity, improve customer service and support product innovation. Capital expenditures for 2024 were $168 million, compared with $243 million for 2023.
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.
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.
Operating Results Operating profit in the Plumbing Products segment in 2023 was positively impacted by higher net selling prices, lower transportation and commodity costs, cost savings initiatives, and lower excess and obsolete inventory charges. These amounts were partially offset by lower sales volume, increased employee-related costs, unfavorable sales mix, unfavorable foreign currency translation and increased marketing costs.
These increases were mostly offset by lower sales volume and unfavorable sales mix which each decreased sales by one percent. Operating Results Operating profit in the Plumbing Products segment in 2024 was positively impacted by cost savings initiatives and higher net selling prices, partially offset by higher commodity costs, unfavorable sales mix, lower sales volume and higher employee-related costs.
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. 25 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.
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.
For 2024, capital expenditures, excluding any potential future acquisitions, are expected to be approximately $200 million. Depreciation and amortization expense for 2023 totaled $149 million, compared with $145 million for 2022. For 2024, depreciation and amortization expense, excluding any potential future acquisitions, is expected to be approximately $160 million.
For 2025, depreciation and amortization expense, excluding any potential future acquisitions, is expected to be approximately $150 million. Amortization expense totaled $32 million in 2024, compared with $34 million in 2023.
We review our hedging program, derivative positions and overall risk management on a regular basis. We currently do not have any derivative instruments for which we have designated hedge accounting.
We review our hedging program, derivative positions and overall risk management on a regular basis.
As a result, we recognized a $29 million state income tax benefit, net of federal expense, in the fourth quarter of 2023. Refer to Note R 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. 31
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. 30
We do not believe such risk would have a material impact on our working capital or cash flows, as substantially all of our payments are made outside of the program.
We do not believe such risk would have a material impact on our working capital or cash flows, as substantially all of our payments are made outside of the program. We utilize derivative and hedging instruments to manage our exposure to currency fluctuations, primarily related to the European euro, British pound sterling, Chinese renminbi, Mexican peso and the U.S. dollar.
As part of our capital allocation strategy, the Board of Directors declared a quarterly dividend of $0.29 per share in the first quarter of 2024 with the intention to increase the annual dividend 2 percent to $1.16 per share. 26 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.
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 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. 28 Contractual Obligations The following table provides payment obligations related to current contracts at December 31, 2023, in millions: Payments Due by Period 2024 2025-2026 2027-2028 Beyond 2028 Other Total Debt (A) $ 3 $ 5 $ 904 $ 2,042 $ — $ 2,954 Interest (A) 98 193 178 656 — 1,125 Operating leases 57 101 65 167 — 390 Currently payable income taxes 32 — — — — 32 Purchase commitments (B) 327 81 4 — — 412 Uncertain tax positions, including interest and penalties (C) — — — — 93 93 Total $ 517 $ 379 $ 1,152 $ 2,866 $ 93 $ 5,006 ______________________________ (A) We assume that all debt would be held to maturity.
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.
In 2023, 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 11.50 percent to 13.50 percent for our reporting units.
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. 29 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.
Lower sales volume decreased sales by 11 percent and unfavorable sales mix decreased sales by one percent. These amounts were partially offset by higher net selling prices which increased sales by five percent. 24 Operating Results International operating profit in 2023 was negatively impacted by lower sales volume, unfavorable sales mix and unfavorable foreign currency translation.
Gross profit was negatively impacted by one percent due to the non-recurrence of the receipt of an insurance settlement payment in 2023, as well as unfavorable sales mix, and one percent each due to lower sales volume and unfavorable foreign currency translation. These amounts were mostly offset by cost savings initiatives and one percent due to higher net selling prices.
Refer to Note N to the consolidated financial statements for additional information. During 2022, we repurchased and retired 16.6 million shares of our common stock (including 0.6 million shares to offset the dilutive impact of restricted stock units granted during the year), for approximately $914 million.
During 2023, we repurchased and retired 6.2 million shares of our common stock (including 0.2 million shares to offset the dilutive impact of restricted stock units granted during the year), for approximately $356 million, inclusive of excise tax of $3 million. 25 Dividend to holders of our Common Shares In 2024, we paid a quarterly dividend of $0.29 per common share for an annual dividend of $1.16 per share.
BUSINESS SEGMENT RESULTS DISCUSSION Changes in operating profit in the following Business Segment and Geographic Area Results discussion exclude general corporate expense, net, and compares each respective period to the same period of the immediately preceding year. 23 Plumbing Products Sales Net sales in the Plumbing Products segment decreased eight percent in 2023.
Year Ended December 31, Percent Change 2024 2023 2024 vs. 2023 Net Sales: Plumbing Products $ 4,853 $ 4,842 — % Decorative Architectural Products 2,975 3,125 (5) % Total $ 7,828 $ 7,967 (2) % Year Ended December 31, Percent Change 2024 2023 2024 vs. 2023 Operating Profit: Plumbing Products $ 911 $ 861 6 % Decorative Architectural Products 549 578 (5) % Total $ 1,460 $ 1,439 1 % General corporate expense, net (97) (91) 7 % Total operating profit $ 1,363 $ 1,348 1 % BUSINESS SEGMENT RESULTS DISCUSSION Changes in operating profit in the following Business Segment Results discussion exclude general corporate expense, net, and compares each respective period to the same period of the immediately preceding year.
These uses of cash were partially offset by $38 million of proceeds from the exercise of stock options. Investing Activities Net cash used for investing activities was $383 million, primarily driven by $243 million of capital expenditures and $136 million for the acquisition of Sauna360.
These uses of cash were partially offset by $79 million of proceeds from the exercise of stock options.
Financing Activities Net cash used for financing activities was $854 million, primarily due to $353 million for the repurchase and retirement of our common stock (including 0.2 million shares repurchased to offset the dilutive impact of restricted stock units granted in 2023), $257 million for the payment of cash dividends, $200 million for the repayment of the 364-day term loan, $49 million for dividends paid to noncontrolling interest and $29 million for employee withholding taxes paid on stock-based compensation.
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.
Operating Results Operating profit in the Decorative Architectural Products segment in 2023 was positively impacted by higher net selling prices, cost savings initiatives, receipt of an insurance settlement payment, lower transportation costs, lower excess and obsolete inventory charges, and lower goodwill and other intangible assets impairment charges in our lighting business.
Decorative Architectural Products Sales Net sales in the Decorative Architectural Products segment decreased five percent in 2024, primarily due to the divestiture of Kichler in the third quarter of 2024, lower net selling prices across the segment and lower sales volume of builders' hardware products, partially offset by higher sales volume of paints and other coating products. 23 Operating Results Operating profit in the Decorative Architectural Products segment in 2024 was negatively impacted by lower net selling prices and the non-recurrence of the receipt of an insurance settlement payment in 2023, partially offset by cost savings initiatives, the non-recurrence of an other intangible asset impairment charge in 2023 and lower sales commissions.
These amounts were partially offset by: • Lower sales volume. • Increased employee-related costs. • Unfavorable sales mix. • Increased marketing costs. • Unfavorable foreign currency translation. 21 OTHER INCOME (EXPENSE), NET Interest Expense Below is a summary of our interest expense, in millions, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Interest expense $ (106) $ (108) $ 2 Other, net Below is a summary of our other, net, in millions, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Other, net $ (4) $ 4 $ (8) Other, net, for 2022 included $24 million of income from the revaluation of contingent consideration related to the acquisition of Kraus USA Inc.
OTHER INCOME (EXPENSE), NET Below is a summary of our other income (expense), net, in millions, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Interest expense $ (99) $ (106) 7 % Other, net (103) (4) (2,475) % Other income (expense), net $ (202) $ (110) (84) % Other, net included a loss on the sale of Kichler Lighting ("Kichler") of $88 million, inclusive of costs to sell, for the year ended December 31, 2024.
Commitments and Contingencies Litigation Information regarding our legal proceedings is set forth in Note T 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.
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. 27 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.
These amounts were partially offset by higher net selling prices, which increased sales by four percent and the acquisition of Sauna360 which increased sales by one percent.
Plumbing Products Sales Net sales in the Plumbing Products segment were flat in 2024. In local currencies (including sales in currencies outside their respective functional currencies), net sales increased one percent in 2024. Higher net selling prices increased sales by two percent and the acquisition of Sauna360 Group Oy ("Sauna360") in 2023 increased sales by one percent.
Our current ratio was 1.7 to 1 and 1.6 to 1 at December 31, 2023 and 2022, respectively. The increase in our current ratio is primarily due to the repayment of the 364-day term loan during 2023. Our total debt as a percent of total capitalization was 97 percent and 109 percent at December 31, 2023 and 2022, respectively.
Our total debt as a percent of total capitalization was 102 percent and 97 percent at December 31, 2024 and 2023, respectively. Refer to Note K to the consolidated financial statements for additional information.
Removed
We discuss our consolidated results as well as our Business Segment and Geographic Area results of operations for the year ended December 31, 2023 versus December 31, 2022.
Added
Our selling, general and administrative expenses for 2024 were $1,468 million, which remained flat compared to 2023. Selling, general and administrative expenses were positively impacted by one percent each due to the divestiture of Kichler in the third quarter of 2024 and lower sales commissions, mostly offset by two percent due to higher employee-related costs.
Removed
These amounts were partially offset by: • Higher net selling prices across the entire company which increased sales by three percent.
Added
Our operating profit for 2024 was $1,363 million, which increased one percent, and was positively impacted by the non-recurrence of an impairment charge for other intangible assets in 2023.
Removed
Gross Profit and Gross Margin Below is a summary of our gross profit, in millions, and gross margin for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Gross profit $ 2,836 $ 2,713 $ 123 Gross margin 35.6 % 31.3 % 430 bps Our 2023 gross profit margin was positively impacted by: • Higher net selling prices. • Cost savings initiatives. • Lower transportation costs. • Receipt of an insurance settlement payment. • Lower excess and obsolete inventory charges.
Added
This state income tax benefit did not recur in 2024. Refer to Note P to the consolidated financial statements for additional information.
Removed
These amounts were partially offset by: • Lower sales volume. • Unfavorable sales mix. 20 Selling, General and Administrative Expenses Below is a summary of our selling, general and administrative expenses, in millions, and selling, general and administrative expenses as a percentage of net sales for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Favorable / (Unfavorable) Selling, general and administrative expenses $ (1,473) $ (1,390) $ (83) Selling, general and administrative expenses as a percentage of net sales (18.5) % (16.0) % (250) bps Our 2023 selling, general and administrative expenses as a percentage of net sales was negatively impacted by: • Increased employee-related costs. • Increased marketing costs. • Lower net sales resulting from lower volumes.
Added
The decrease in capital expenditures in 2024 was primarily due to capacity expansion plans in our Plumbing Products and Decorative Architectural Products segments in 2023. For 2025, capital expenditures, excluding any potential future acquisitions, are expected to be approximately $175 million. Depreciation and amortization expense for 2024 totaled $150 million, compared with $149 million for 2023.
Removed
Year Ended December 31, Percent Change 2023 2022 2023 vs. 2022 Net Sales: Plumbing Products $ 4,842 $ 5,252 (8) % Decorative Architectural Products 3,125 3,428 (9) % Total $ 7,967 $ 8,680 (8) % North America $ 6,384 $ 6,978 (9) % International, particularly Europe 1,583 1,702 (7) % Total $ 7,967 $ 8,680 (8) % Year Ended December 31, Percent Change 2023 2022 2023 vs. 2022 Operating Profit (A): Plumbing Products $ 861 $ 819 5 % Decorative Architectural Products 578 565 2 % Total $ 1,439 $ 1,384 4 % North America $ 1,210 $ 1,116 8 % International, particularly Europe 229 268 (15) % Total 1,439 1,384 4 % General corporate expense, net (91) (87) 5 % Total operating profit $ 1,348 $ 1,297 4 % (A) Before general corporate expense, net; refer to Note P to the consolidated financial statements for additional information.
Added
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.
Removed
In local currencies (including sales in currencies outside their respective functional currencies), net sales decreased seven percent in 2023. Lower sales volume decreased sales by 11 percent and unfavorable sales mix decreased sales by one percent.
Added
Divestitures In the third quarter of 2024, we sold our Kichler business, a provider of decorative residential and light commercial lighting products, ceiling fans, and LED lighting systems, for consideration of $125 million, net of cash disposed, and subject to final closing adjustments. Post-closing adjustments were finalized in the fourth quarter of 2024.
Removed
Decorative Architectural Products Sales Net sales in the Decorative Architectural Products segment decreased nine percent in 2023, primarily due to lower sales volume, partially offset by higher net selling prices.
Added
Total cash dividends paid was $254 million in 2024. As part of our capital allocation strategy, the Board of Directors declared a quarterly dividend of $0.31 per share in the first quarter of 2025 with the intention to increase the annual dividend 7 percent to $1.24 per share.
Removed
These amounts were partially offset by lower sales volume, increased commodity costs and increased employee-related costs. GEOGRAPHIC AREA RESULTS DISCUSSION North America Sales North America net sales decreased nine percent in 2023. Lower sales volume decreased sales by 11 percent and unfavorable sales mix decreased sales by one percent.
Added
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.
Removed
Operating Results North America operating profit in 2023 was positively impacted by higher net selling prices, cost savings initiatives, lower transportation costs, receipt of an insurance settlement payment, lower excess and obsolete inventory charges, and lower goodwill and other intangible assets impairment charges in our lighting business.
Added
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.
Removed
These amounts were partially offset by lower sales volume, increased employee-related costs, unfavorable sales mix and increased marketing costs. International, Particularly Europe Sales International net sales decreased seven percent in 2023. In local currencies (including sales in currencies outside their respective functional currencies), net sales decreased six percent.
Removed
These amounts were partially offset by higher net selling prices and lower transportation and commodity costs.
Removed
Amortization expense totaled $34 million in 2023, compared with $33 million in 2022.
Removed
Dividend to holders of our Common Shares We paid a quarterly dividend of $0.285 per common share for an annual dividend of $1.14 per share.
Removed
We utilize derivative and hedging instruments to manage our exposure to currency fluctuations, primarily related to the European euro, British pound sterling, the Chinese renminbi and the U.S. dollar; occasionally, we have also used derivative and hedging instruments to manage interest rate fluctuations, primarily related to debt issuances.
Removed
While we believe that the estimates and assumptions underlying the valuation methodology are reasonable, different estimates and assumptions could result in different outcomes.
Removed
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. 30 In the fourth quarter of 2023, we recognized a $15 million non-cash impairment charge related to a registered trademark within our Decorative Architectural Products segment due to competitive market conditions and increased cost of capital in our lighting business.
Removed
We have loss carryforwards in certain state jurisdictions resulting from perpetual losses for which deferred tax assets were not recognized as the likelihood of utilization was remote. Due to a legal restructuring of certain U.S. businesses that will occur in early 2024, it is more likely than not a significant portion of these loss carryforwards will be utilized.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed1 unchanged
Biggest changeWe have insignificant involvement with derivative financial instruments and use such instruments to the extent necessary to manage exposure to foreign currency fluctuations.
Biggest changeWe 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, 2023, 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.
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. 32
Based upon the analyses performed, such changes would not be expected to materially affect our consolidated financial position, results of operations or cash flows. 31
Removed
We are exposed to the impact of changes in interest rates and foreign currency exchange rates, particularly changes between the U.S. dollar and the European euro, British pound sterling, Canadian dollar, Chinese renminbi, and Mexican peso, and to market price fluctuations related to our financial investments.

Other MAS 10-K year-over-year comparisons