MASCO CORP /DE/, 10-K filed on 2/18/2011
Annual Report
Document and Entity Information
Year Ended
Dec. 31, 2010
Jan. 31, 2011
Jun. 30, 2010
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
MASCO CORP /DE/ 
 
 
Entity Central Index Key
0000062996 
 
 
Document Type
10-K 
 
 
Document Period End Date
2010-12-31 
 
 
Amendment Flag
FALSE 
 
 
Document Fiscal Year Focus
2010 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
12/31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
3,177,733,000 
Entity Common Stock, Shares Outstanding (actual number)
 
358,113,000 
 
Consolidated Balance Sheets (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
Current Assets:
 
 
Cash and cash investments
$ 1,715 
$ 1,413 
Receivables
888 
983 
Inventories
732 
743 
Prepaid expenses and other
129 
312 
Total current assets
3,464 
3,451 
Property and equipment, net
1,737 
1,981 
Goodwill
2,383 
3,108 
Other intangible assets, net
269 
290 
Other assets
287 
345 
Total Assets
8,140 
9,175 
Current Liabilities:
 
 
Accounts payable
602 
578 
Notes payable
66 
364 
Accrued liabilities
819 
839 
Total current liabilities
1,487 
1,781 
Long-term debt
4,032 
3,604 
Deferred income taxes and other
1,039 
973 
Total Liabilities
6,558 
6,358 
Commitments and contingencies
 
 
Masco Corporation's shareholders' equity
 
 
Common shares authorized: 1,400,000,000; issued and outstanding: 2010 - 348,600,000; 2009 - 350,400,000
349 
350 
Preferred shares authorized: 1,000,000; issued and outstanding: 2010 and 2009 - None
Paid-in capital
42 
42 
Retained earnings
720 
1,871 
Accumulated other comprehensive income
273 
366 
Total Masco Corporation's shareholders' equity
1,384 
2,629 
Noncontrolling interest
198 
188 
Total Equity
1,582 
2,817 
Total Liabilities and Equity
$ 8,140 
$ 9,175 
Consolidated Balance Sheets (Parenthetical)
Dec. 31, 2010
Dec. 31, 2009
Masco Corporation's shareholders' equity
 
 
Common shares, shares authorized
1,400,000,000 
1,400,000,000 
Common shares, shares issued
348,600,000 
350,400,000 
Common shares, shares outstanding
348,600,000 
350,400,000 
Preferred shares, shares authorized
1,000,000 
1,000,000 
Preferred shares, shares issued
Preferred shares, shares outstanding
Consolidated Statements of Income (USD $)
In Millions, except Per Share data
Year Ended
Dec. 31,
2010
2009
2008
Consolidated Statements of Income [Abstract]
 
 
 
Net sales
$ 7,592 
$ 7,792 
$ 9,484 
Cost of sales
5,752 
5,774 
7,125 
Gross profit
1,840 
2,018 
2,359 
Selling, general and administrative expenses
1,618 
1,701 
1,802 
Impairment charges for goodwill and other intangible assets
721 
262 
467 
Operating (loss) profit
(499)
55 
90 
Other income (expense), net:
 
 
 
Interest expense
(251)
(225)
(228)
Impairment charges for financial investments
(34)
(10)
(58)
Other, net
29 
Other income (expense), net
(278)
(206)
(283)
Loss from continuing operations before income taxes
(777)
(151)
(193)
Income tax expense (benefit)
225 
(49)
134 
Loss from continuing operations
(1,002)
(102)
(327)
Loss from discontinued operations, net
 
(43)
(25)
Net loss
(1,002)
(145)
(352)
Less: Net income attributable to noncontrolling interest
41 
38 
39 
Net loss attributable to Masco Corporation
(1,043)
(183)
(391)
Basic:
 
 
 
Loss from continuing operations
(3)
(0.41)
(1.06)
Loss from discontinued operations, net
 
(0.12)
(0.07)
Net loss
(3)
(0.53)
(1.13)
Diluted:
 
 
 
Loss income from continuing operations
(3)
(0.41)
(1.06)
Loss from discontinued operations, net
 
(0.12)
(0.07)
Net loss
(3)
(0.53)
(1.13)
Amounts attributable to Masco Corporation:
 
 
 
Loss from continuing operations
(1,043)
(140)
(366)
Loss from discontinued operations, net
 
(43)
(25)
Net loss
$ (1,043)
$ (183)
$ (391)
Consolidated Statements of Cash Flows (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
 
 
 
Net loss
$ (1,002)
$ (145)
$ (352)
Depreciation and amortization
279 
254 
238 
Deferred income taxes
168 
(83)
20 
Loss on disposition of businesses, net
 
40 
38 
(Gain) on disposition of investments, net
(8)
(2)
 
Charge for litigation settlements
 
 
Impairment charges:
 
 
 
Financial investments
34 
10 
58 
Goodwill and other intangible assets
721 
262 
467 
Long-lived assets
67 
 
 
Stock-based compensation
62 
69 
74 
Other items, net
29 
58 
84 
Decrease in receivables
80 
20 
294 
Decrease in inventories
198 
104 
Increase (decrease) in accounts payable and accrued liabilities, net
33 
24 
(237)
Net cash from operating activities
465 
705 
797 
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
 
 
 
Increase in debt
 
Payment of debt
(6)
(14)
(33)
Issuance of notes, net of issuance costs
494 
 
 
Credit Agreement costs
(9)
 
 
Retirement of notes
(359)
 
(100)
Proceeds from settlement of swaps
 
 
16 
Purchase of Company common stock
(45)
(11)
(160)
Tax benefit from stock-based compensation
Dividends paid to noncontrolling interest
(15)
(16)
(21)
Cash dividends paid
(108)
(166)
(336)
Net cash for financing activities
(40)
(197)
(631)
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
 
 
 
Capital expenditures
(137)
(125)
(200)
Acquisition of businesses, net of cash acquired
 
(8)
(21)
Proceeds from disposition of:
 
 
 
Marketable securities
22 
10 
Businesses, net of cash disposed
 
179 
Property and equipment
18 
23 
Other financial investments, net
20 
48 
Other, net
(32)
(27)
(31)
Net cash for investing activities
(109)
(118)
(14)
Effect of exchange rate changes on cash and cash investments
(14)
(5)
(46)
CASH AND CASH INVESTMENTS:
 
 
 
Increase for the year
302 
385 
106 
At January 1
1,413 
1,028 
922 
At December 31
$ 1,715 
$ 1,413 
$ 1,028 
Consolidated Statements of Shareholders' Equity (USD $)
In Millions
Common Shares ($1 par value)
Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income
Noncontrolling Interest
Total
Beginning Balance at Dec. 31, 2007
$ 359 
$ 0 
$ 2,969 
$ 661 
$ 153 
$ 4,142 
Net (loss) income
 
 
(391)
 
39 
(352)
Cumulative translation adjustments
 
 
 
(210)
(11)
(221)
Unrealized gain on marketable securities, net of income tax of $0, $13, and $4 for 2010, 2009 and 2008 respectively
 
 
 
 
Unrecognized prior service cost and net loss, net of income tax benefit of $0, $20, and $86 for 2010, 2009 and 2008 respectively
 
 
 
(150)
 
(150)
Total comprehensive loss
 
 
 
 
 
(716)
Shares issued
 
 
 
 
Shares retired:
 
 
 
 
 
 
Repurchased
(9)
(71)
(80)
 
 
(160)
Surrendered (non-cash)
 
(7)
 
 
 
(7)
Cash dividends declared
 
 
(336)
 
 
(336)
Dividends paid to noncontrolling interest
 
 
 
 
(21)
(21)
Stock-based compensation
 
78 
 
 
 
78 
Ending Balance at Dec. 31, 2008
351 
2,162 
308 
160 
2,981 
Net (loss) income
 
 
(183)
 
38 
(145)
Cumulative translation adjustments
 
 
 
22 
28 
Unrealized gain on marketable securities, net of income tax of $0, $13, and $4 for 2010, 2009 and 2008 respectively
 
 
 
22 
 
22 
Unrecognized prior service cost and net loss, net of income tax benefit of $0, $20, and $86 for 2010, 2009 and 2008 respectively
 
 
 
14 
 
14 
Total comprehensive loss
 
 
 
 
 
(81)
Shares issued
(1)
 
 
 
Shares retired:
 
 
 
 
 
 
Repurchased
(2)
(9)
 
 
 
(11)
Surrendered (non-cash)
(1)
(4)
 
 
 
(5)
Cash dividends declared
 
 
(108)
 
 
(108)
Dividends paid to noncontrolling interest
 
 
 
 
(16)
(16)
Stock-based compensation
 
56 
 
 
 
56 
Ending Balance at Dec. 31, 2009
350 
42 
1,871 
366 
188 
2,817 
Net (loss) income
 
 
(1,043)
 
41 
(1,002)
Cumulative translation adjustments
 
 
 
(41)
(16)
(57)
Unrealized gain on marketable securities, net of income tax of $0, $13, and $4 for 2010, 2009 and 2008 respectively
 
 
 
 
Unrecognized prior service cost and net loss, net of income tax benefit of $0, $20, and $86 for 2010, 2009 and 2008 respectively
 
 
 
(53)
 
(53)
Total comprehensive loss
 
 
 
 
 
(1,111)
Shares issued
(2)
 
 
 
 
Shares retired:
 
 
 
 
 
 
Repurchased
(3)
(42)
 
 
 
(45)
Surrendered (non-cash)
 
(6)
 
 
 
(6)
Cash dividends declared
 
 
(108)
 
 
(108)
Dividends paid to noncontrolling interest
 
 
 
 
(15)
(15)
Stock-based compensation
 
50 
 
 
 
50 
Ending Balance at Dec. 31, 2010
$ 349 
$ 42 
$ 720 
$ 273 
$ 198 
$ 1,582 
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Income tax benefit on unrealized gain (loss) on marketable securities
$ 0 
$ 13 
$ 4 
Income tax benefit on unrecognized prior service cost
20 
86 
Accumulated Other Comprehensive Income
 
 
 
Income tax benefit on unrealized gain (loss) on marketable securities
13 
Income tax benefit on unrecognized prior service cost
$ 0 
$ 20 
$ 86 
Accounting Policies
Accounting Policies
 
A.  ACCOUNTING POLICIES
 
Principles of Consolidation.  The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. The Company consolidates the assets, liabilities and results of operations of variable interest entities, for which the Company is the primary beneficiary.
 
Use of Estimates and Assumptions in the Preparation of Financial Statements.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions.
 
Revenue Recognition.  The Company recognizes revenue as title to products and risk of loss is transferred to customers or when services are rendered, net of applicable provisions for discounts, returns and allowances. The Company records revenue for unbilled services performed based upon estimates of labor incurred in the Installation and Other Services segment; such amounts are recorded in Receivables. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales.
 
Customer Promotion Costs.  The Company records estimated reductions to revenue for customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. In-store displays that are owned by the Company and used to market the Company’s products are included in other assets in the consolidated balance sheets and are amortized using the straight-line method over the expected useful life of three years; related amortization expense is classified as a selling expense in the consolidated statements of income.
 
Foreign Currency.  The financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. The resulting cumulative translation adjustments have been recorded in the accumulated other comprehensive income component of shareholders’ equity. Realized foreign currency transaction gains and losses are included in the consolidated statements of income in other income (expense), net.
 
Cash and Cash Investments.  The Company considers all highly liquid investments with an initial maturity of three months or less to be cash and cash investments.
 
Receivables.  The Company does significant business with a number of customers, including certain home centers and homebuilders. The Company monitors its exposure for credit losses on its customer receivable balances and the credit worthiness of its customers on an on-going basis and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer balances, where a risk of default has been identified, and also include a provision for non-customer specific defaults based upon historical collection, return and write-off activity. During downturns in the Company’s markets, declines in the financial condition and creditworthiness of customers impacts the credit risk of the receivables involved and the Company has incurred additional bad debt expense related to customer defaults. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity. Receivables are presented net of certain allowances (including allowances for doubtful accounts) of $65 million and $75 million at December 31, 2010 and 2009, respectively. Receivables include unbilled revenue related to the Installation and Other Services segment of $12 million and $15 million at December 31, 2010 and 2009, respectively.
 
 
Property and Equipment.  Property and equipment, including significant betterments to existing facilities, are recorded at cost. Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of income. Maintenance and repair costs are charged against earnings as incurred.
 
The Company reviews its property and equipment as an event occurs or circumstances change that would more likely than not reduce the fair value of the property and equipment below the carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the current fair value. Further, the Company evaluates the remaining useful lives of property and equipment at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods.
 
Depreciation.  Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 to 10 percent, and machinery and equipment, 5 to 33 percent. Depreciation expense was $261 million, $237 million and $220 million in 2010, 2009 and 2008, respectively.
 
Goodwill and Other Intangible Assets.  The Company performs its annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has defined its reporting units and completed the impairment testing of goodwill at the operating segment level, as defined by accounting guidance. The Company’s operating segments are reporting units that engage in business activities, for which discrete financial information, including five-year forecasts, are available. The Company compares the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. Fair value is determined using a discounted cash flow method, which includes significant unobservable inputs (Level 3 inputs).
 
Determining market values using a discounted cash flow method requires the Company to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. The Company’s judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. In estimating future cash flows, the Company relies on internally generated five-year forecasts for sales and operating profits, including capital expenditures, and generally a one to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. The Company generally utilizes its weighted average cost of capital (discount rate) of approximately eight percent to discount the estimated cash flows. However, in 2010 and 2009, due to market conditions, the Company increased the discount rate to a range of nine percent to eleven percent for most of its reporting units, based upon a review of the current risks impacting our businesses. The Company records an impairment to goodwill (adjusting the value to the estimated fair value) if the book value is below the estimated fair value, on a non-recurring basis.
 
The Company reviews its other indefinite-lived intangible assets for impairment annually in the fourth quarter of each year, or as events occur or circumstances change that indicate the assets may be impaired without regard to the reporting unit. The Company considers the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term.
 
Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. The Company evaluates the remaining useful lives of amortizable identifiable intangible assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining periods of amortization. See Note H for additional information regarding Goodwill and Other Intangible Assets.
 
Fair Value Accounting.  On January 1, 2008, the Company adopted accounting guidance for its financial investments and liabilities which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. On January 1, 2009, the Company adopted this guidance for its non-financial investments and liabilities; such adoption did not have a significant effect on its consolidated financial statements.
 
The fair value of financial investments and liabilities is determined at each balance sheet date and future declines in market conditions, the future performance of the underlying investments or new information could affect the recorded values of the Company’s investments in marketable securities, private equity funds and other private investments.
 
The Company uses derivative financial instruments to manage certain exposure to fluctuations in earnings and cash flows resulting from changes in foreign currency exchange rates and commodity costs. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at fair value. For each derivative financial instrument that is designated and qualifies as a fair-value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in determining current earnings during the period of the change in fair values. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in determining current earnings during the period of the change in fair value.
 
Warranty.  At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of warranty obligations. The Company’s estimate of costs to service its warranty obligations is based upon historical experience and expectations of future conditions.
 
A majority of the Company’s business is at the consumer retail level through home centers and major retailers. A consumer may return a product to a retail outlet that is a warranty return. However, certain retail outlets do not distinguish between warranty and other types of returns when they claim a return deduction from the Company. The Company’s revenue recognition policy takes into account this type of return when recognizing revenue, and deductions are recorded at the time of sale.
 
Product Liability.  The Company provides for expenses associated with product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability.
 
Stock-Based Compensation.  The Company measures compensation expense for stock awards at the market price of the Company’s common stock at the grant date. Effective January 1, 2006, such expense is being recognized ratably over the shorter of the vesting period of the stock awards, typically 5 to 10 years (except for stock awards held by grantees age 66 or older, which vest over five years), or the length of time until the grantee becomes retirement-eligible at age 65. For stock awards granted prior to January 1, 2006, such expense is being recognized over the vesting period of the stock awards, typically 10 years, or for executive grantees that are, or will become, retirement-eligible during the vesting period, the expense is being recognized over five years or immediately upon a grantee’s retirement.
 
The Company measures compensation expense for stock options using a Black-Scholes option pricing model. For stock options granted subsequent to January 1, 2006, such expense is being recognized ratably over the shorter of the vesting period of the stock options, typically five years, or the length of time until the grantee becomes retirement-eligible at age 65. The expense for unvested stock options at January 1, 2006 is based upon the grant date fair value of those options as calculated using a Black-Scholes option pricing model. For stock options granted prior to January 1, 2006, such expense is being recognized ratably over the vesting period of the stock options, typically five years. The Company utilizes the shortcut method to determine the tax windfall pool associated with stock options.
 
Noncontrolling Interest.  The Company owns 68 percent of Hansgrohe AG at both December 31, 2010 and 2009. The aggregate noncontrolling interest, net of dividends, at December 31, 2010 and 2009 has been recorded as a component of equity on the Company’s consolidated balance sheets.
 
Interest and Penalties on Uncertain Tax Positions.  The Company records interest and penalties on its uncertain tax positions in income tax expense.
 
Reclassifications.  Certain prior-year amounts have been reclassified to conform to the 2010 presentation in the consolidated financial statements. In the Company’s consolidated statements of cash flows, the cash flows from discontinued operations are not separately classified.
 
Recently Issued Accounting Pronouncements.  Effective January 1, 2010, the Company adopted new FASB guidance regarding how a company determines when an entity is insufficiently capitalized or is not controlled through voting and should be consolidated. The adoption of this guidance did not have any impact on the Company’s consolidated financial condition and results of operations.
Discontinued Operations
Discontinued Operations
 
B.  DISCONTINUED OPERATIONS
 
During 2009 and 2008, the Company sold several business units that were not core to the Company’s long-term growth strategy. The presentation of discontinued operations includes a component of the Company, which comprises operations and cash flows, that can be clearly distinguished from the rest of the Company. The Company has accounted for the business units which were sold in 2009 and 2008 as discontinued operations.
 
During 2009, in separate transactions, the Company completed the sale of Damixa and Breuer, two European business units in the Plumbing Products segment. The Company received gross proceeds of $9 million and recognized a net pre-tax loss of $43 million for the sale of these business units.
 
During 2009, the Company recorded income of $1 million included in (loss) gain on disposal of discontinued operations, net related to cash received for a disposition completed in prior years. Also during 2009, the Company recorded other income of $2 million included in (loss) gain on disposal of discontinued operations, net, reflecting the settlement of certain liabilities related to a business unit disposed in prior years.
 
During 2008, in separate transactions, the Company completed the sale of its Europe-based The Heating Group business unit (Other Specialty Products segment), Glass Idromassaggio (Plumbing Products segment) and Alfred Reinecke (Plumbing Products segment). Total net proceeds from the sale of these business units were $174 million. The Company recorded an impairment of assets related to these discontinued operations which primarily included the write-down of goodwill of $24 million and other assets of $21 million; upon completion of the transactions, the Company recognized a net gain of $6 million included in (loss) gain on disposal of discontinued operations, net. During 2008, the Company recorded other net expenses of $3 million included in (loss) gain on disposal of discontinued operations, net, reflecting the adjustment of certain liabilities related to businesses disposed in prior years.
 
(Losses) gains from these 2009 and 2008 discontinued operations were included in (loss) from discontinued operations, net, in the consolidated statements of income.
 
Selected financial information for the discontinued operations during the period owned by the Company, were as follows, in millions:
 
                 
    2009     2008  
 
Net sales
  $ 66     $ 216  
                 
(Loss) from discontinued operations
  $ (10 )   $ (5 )
Impairment of assets held for sale
          (45 )
(Loss) gain on disposal of discontinued operations, net
    (40 )     3  
                 
(Loss) before income tax
    (50 )     (47 )
Income tax benefit
    7       22  
                 
(Loss) from discontinued operations, net
  $ (43 )   $ (25 )
                 
 
Included in income tax benefit above was income tax benefit related to (loss) from discontinued operations of $1 million in both 2009 and 2008. The unusual relationship between income taxes and (loss) before income taxes resulted primarily from certain losses providing no current tax benefit.
Acquisitions
Acquisitions
 
C.  ACQUISITIONS
 
During 2009, the Company acquired a small business in the Plumbing Products segment; this business allows the Company to expand into a developing market and had annual sales of $11 million. During 2008, the Company acquired a relatively small countertop business (Cabinet and Related Products segment) which allows the Company to expand the products and services it offers to its customers and had annual sales of over $40 million.
 
The results of all acquisitions are included in the consolidated financial statements from the respective dates of acquisition.
 
The total net cash purchase price of these acquisitions was $6 million and $18 million, respectively, in 2009 and 2008.
 
Certain purchase agreements provided for the payment of additional consideration in cash, contingent upon whether certain conditions are met, including the operating performance of the acquired business. In 2008, the Company paid in cash an additional $1 million of acquisition-related consideration, contingent consideration and other purchase price adjustments, relating to previously acquired companies. At December 31, 2010 and 2009, there was no outstanding contingent consideration.
Inventories
Inventories
 
D.  INVENTORIES
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Finished goods
  $ 393     $ 405  
Raw material
    246       247  
Work in process
    93       91  
                 
Total
  $ 732     $ 743  
                 
 
Inventories, which include purchased parts, materials, direct labor and applied manufacturing overhead, are stated at the lower of cost or net realizable value, with cost determined by use of the first-in, first-out method.
Fair Value of Financial Investments and Liabilities
Fair Value of Financial Investments and Liabilities
E.  FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES
 
Accounting Policy.  On January 1, 2008, the Company adopted accounting guidance that defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements for its financial investments and liabilities. The guidance defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Further, it defines a fair value hierarchy, as follows: Level 1 inputs as quoted prices in active markets for identical assets or liabilities; Level 2 inputs as observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities or other inputs that are observable or can be corroborated by market data; and Level 3 inputs as unobservable inputs that are supported by little or no market activity and that are financial instruments whose value is determined using pricing models or instruments for which the determination of fair value requires significant management judgment or estimation.
 
Financial investments that are available to be traded on readily accessible stock exchanges (domestic or foreign) are considered to have active markets and have been valued using Level 1 inputs. Financial investments that are not available to be traded on a public market or have limited secondary markets, or contain provisions that limit the ability to sell the investment are considered to have inactive markets and have been valued using Level 2 or 3 inputs. The Company incorporated credit risk into the valuations of financial investments by estimating the likelihood of non-performance by the counterparty to the applicable transactions. The estimate included the length of time relative to the contract, financial condition of the counterparty and current market conditions. The criteria for determining if a market was active or inactive were based on the individual facts and circumstances.
 
Financial Investments.  The Company has maintained investments in available-for-sale securities and a number of private equity funds and other private investments, principally as part of its tax planning strategies, as any gains enhance the utilization of any current and future tax capital losses.
 
Financial investments included in other assets were as follows, in millions:
 
                 
    At December 31  
    2010     2009  
 
TriMas Corporation common stock
  $ 40     $ 17  
Auction rate securities
    22       22  
Asahi Tec Corporation — common and preferred stock
          71  
                 
Total recurring investments
    62       110  
                 
Private equity funds
    106       123  
Other investments
    13       9  
                 
Total non-recurring investments
    119       132  
Total
  $ 181     $ 242  
                 
 
The Company’s investments in available-for-sale securities at December 31, 2010 and 2009 were as follows, in millions:
 
                                 
          Pre-tax        
          Unrealized
    Unrealized
    Recorded
 
    Cost Basis     Gains     Losses     Basis  
 
December 31, 2010
  $ 22     $ 40     $     $ 62  
December 31, 2009
  $ 71     $ 39     $     $ 110  
 
The Company’s investments in private equity funds and other private investments are carried at cost. At December 31, 2010, the Company has investments in 17 venture capital funds, with an aggregate carrying value of $22 million. The venture capital funds invest in start-up or smaller, early-stage established businesses, principally in the information technology, bio-technology and health care sectors. At December 31, 2010, the Company also has investments in 26 buyout funds, with an aggregate carrying value of $84 million. The buyout funds invest in later-stage, established businesses and no buyout fund has a concentration in a particular sector.
 
Recurring Fair Value Measurements.  For financial investments measured at fair value on a recurring basis at each reporting period, the unrealized gains or losses (that are deemed to be temporary) are recognized, net of tax effect, through shareholders’ equity, as a component of other comprehensive income. Realized gains and losses and charges for other-than-temporary impairments are included in determining net income, with related purchase costs based upon specific identification.
 
For marketable securities, the Company reviews, on a recurring basis, industry analyst reports, key ratios and statistics, market analyses and other factors for each investment to determine if an unrealized loss is other-than-temporary.
 
In the past, the Company invested excess cash in auction rate securities. Auction rate securities are investment securities that have interest rates which are reset every 7, 28 or 35 days. The fair values of the auction rate securities held by the Company have been estimated, on a recurring basis, using a discounted cash flow model (Level 3 input). The significant inputs in the discounted cash flow model used to value the auction rate securities include: expected maturity of auction rate securities, discount rate used to determine the present value of expected cash flows and assumptions for credit defaults, since the auction rate securities are backed by credit default swap agreements.
 
In 2009, the Company sold its holdings of Asahi Tec common stock for proceeds approximating book value.
 
During the second quarter of 2010, Asahi Tec approached the Company with an offer to amend the terms of the preferred stock held by the Company. The request was made by Asahi Tec in order to facilitate early negotiations with their bank group for debt that matures in early 2011. The Company and Asahi Tec agreed to amend the preferred stock to include a more favorable conversion feature into common stock and to include a mandatory conversion date of February 28, 2011. The Company agreed to this amendment based on favorable tax benefits related to the Asahi Tec investment. Prior to this amendment, the Company could have settled in cash or common stock in 2017. As a result of the amendment, the Company recognized a $28 million impairment loss based on the current fair value of the preferred stock on an if-converted basis at June 30, 2010. Also, as a result of the amendment, the Company reversed an unrealized gain of $23 million that was previously included in accumulated other comprehensive income. During the last six months of 2010, the Company converted all its holdings of Asahi Tec preferred stock into common stock which was sold, in its entirety, in open market transactions. The Company realized cash proceeds of $11 million and realized losses aggregating $8 million in 2010. As a result of the disposition of the Asahi Tec common stock, the Company will receive a tax refund of $16 million in 2011 relating to the utilization of a loss carryback to offset taxes paid on prior capital gains.
 
In the past, the preferred stock of Asahi Tec was valued primarily using a discounted cash flow model, because there were previously no observable prices in an active market for the same or similar securities. The significant inputs in the discounted cash flow model previously used to value the Asahi Tec preferred stock included: the present value of future dividends, present value of redemption rights, fair value of conversion rights and the discount rate based on credit spreads for Japanese-issued preferred securities (approximately 600 basis points at December 31, 2009) and other market factors.
 
During 2010, the Company sold 481,000 shares of its investment in TriMas common stock for cash of $10 million.
 
Non-Recurring Fair Value Measurements.  It is not practicable for the Company to estimate a fair value for private equity funds and other private investments because there are no quoted market prices, and sufficient information is not readily available for the Company to utilize a valuation model to determine the fair value for each fund. These investments are evaluated, on a non-recurring basis, for potential other-than-temporary impairment when impairment indicators are present, or when an event or change in circumstances has occurred, that may have a significant adverse effect on the fair value of the investment.
 
Impairment indicators the Company considers include the following: whether there has been a significant deterioration in earnings performance, asset quality or business prospects; a significant adverse change in the regulatory, economic or technological environment; a significant adverse change in the general market condition or geographic area in which the investment operates; industry and sector performance; current equity and credit market conditions; and any bona fide offers to purchase the investment for less than the carrying value. The Company also considers specific adverse conditions related to the financial health of and business outlook for the fund, including industry and sector performance. The significant assumptions utilized in analyzing a fund for potential other-than-temporary impairment include current economic conditions, market analysis for specific funds and performance indicators in the residential and commercial construction, bio-technology, health care and information technology sectors in which the applicable funds’ investments operate. Since there is no active trading market for these investments, they are for the most part illiquid. These investments, by their nature, can also have a relatively higher degree of business risk, including financial leverage, than other financial investments. Future changes in market conditions, the future performance of the underlying investments or new information provided by private equity fund managers could affect the recorded values of such investments and the amounts realized upon liquidation. Due to the significant unobservable inputs, the fair value measurements used to evaluate impairment are a Level 3 input.
 
Recurring Fair Value Measurements.  Financial investments and (liabilities) measured at fair value on a recurring basis at each reporting period and the amounts for each level within the fair value hierarchy were as follows, in millions:
 
                                 
          Fair Value Measurements Using  
                Significant
       
          Quoted
    Other
    Significant
 
          Market
    Observable
    Unobservable
 
    Dec. 31,
    Prices
    Inputs
    Inputs
 
    2010     (Level 1)     (Level 2)     (Level 3)  
 
TriMas Corporation
  $ 40     $ 40     $     $  
Auction rate securities
    22                   22  
                                 
Total
  $ 62     $ 40     $     $ 22  
                                 
 
                                 
          Fair Value Measurements Using  
                Significant
       
          Quoted
    Other
    Significant
 
          Market
    Observable
    Unobservable
 
    Dec. 31,
    Prices
    Inputs
    Inputs
 
    2009     (Level 1)     (Level 2)     (Level 3)  
 
Asahi Tec Corporation:
                               
Preferred stock
  $ 71     $     $     $ 71  
Auction rate securities
    22                   22  
TriMas Corporation
    17       17              
                                 
Total
  $ 110     $ 17     $     $ 93  
                                 
 
The following table summarizes the changes in Level 3 financial investments measured at fair value on a recurring basis for the years ended December 31, 2010 and 2009, in millions:
 
                         
    Asahi Tec
    Auction Rate
       
    Preferred Stock     Securities     Total  
 
Fair value January 1, 2010
  $ 71     $ 22     $ 93  
Total losses included in earnings
    (28 )           (28 )
Unrealized losses
    (23 )           (23 )
Purchases, issuances, settlements
                 
Transfers from Level 3 to Level 2
    (20 )           (20 )
                         
Fair value at December 31, 2010
  $     $ 22     $ 22  
                         
 
                         
    Asahi Tec
    Auction Rate
       
    Preferred Stock     Securities     Total  
 
Fair value January 1, 2009
  $ 72     $ 22     $ 94  
Total losses included in earnings
                 
Unrealized losses
    (1 )           (1 )
Purchases, issuances, settlements
                 
                         
Fair value at December 31, 2009
  $ 71     $ 22     $ 93  
                         
 
Non-Recurring Fair Value Measurements.  Financial investments measured at fair value on a non-recurring basis during the period and the amounts for each level within the fair value hierarchy were as follows, in millions:
 
                                         
          Fair Value Measurements Using  
                Significant
             
          Quoted
    Other
    Significant
       
          Market
    Observable
    Unobservable
    Total
 
    Dec. 31,
    Prices
    Inputs
    Inputs
    Gains
 
    2010     (Level 1)     (Level 2)     (Level 3)     (Losses)  
 
Private equity funds
  $ 2     $     $     $ 2     $ (4 )
Other private investments
                            (2 )
                                         
    $ 2     $     $     $ 2     $ (6 )
                                         
 
                                         
          Fair Value Measurements Using  
                Significant
             
          Quoted
    Other
    Significant
       
          Market
    Observable
    Unobservable
    Total
 
    Dec. 31,
    Prices
    Inputs
    Inputs
    Gains
 
    2009     (Level 1)     (Level 2)     (Level 3)     (Losses)  
 
Private equity funds
  $ 31     $     $     $ 31     $ (10 )
Other private investments
    3                   3        
                                         
    $ 34     $     $     $ 34     $ (10 )
                                         
 
The Company’s investments in private equity funds for which fair value was determined with unrealized losses, were as follows, in millions:
 
                         
          Unrealized Loss  
    Fair Value     Less than 12 Months     Over 12 Months  
 
December 31, 2010
  $     $     $  
                         
December 31, 2009
  $     $     $  
                         
 
The remaining private equity investments in 2010 and 2009 with an aggregate carrying value of $104 million and $92 million, respectively, were not reviewed for impairment, as there were no indicators of impairment or identified events or changes in circumstances that would have a significant adverse effect on the fair value of the investment.
 
Realized Gains (Losses) and Impairment Charges.  During 2010, based on information from the fund manager, the Company determined that the decline in the estimated value of three private equity funds (with an aggregate carrying value of $6 million prior to impairment) was other-than-temporary and, accordingly, recognized non-cash, pre-tax impairment charges of $4 million. During 2010, the Company also determined that the decline in the estimated value of one private investment was other-than-temporary and, accordingly, recognized a non-cash, pre-tax impairment charge of $2 million. The Company did not have any transfers between Level 1 and Level 2 financial assets in 2010 or 2009.
 
During 2009, the Company determined that the decline in the estimated value of five private equity funds, with an aggregate carrying value of $41 million prior to impairment, was other-than-temporary. Accordingly, for the year ended December 31, 2009, the Company recognized non-cash, pre-tax impairment charges of $10 million.
 
During 2008, based upon its review of marketable securities, the Company recognized non-cash, pre-tax impairment charges of $31 million related to its investment in TriMas Corporation (“TriMas”) common stock (NYSE: TRS) and $1 million related to its investment in Asahi Tec Corporation (“Asahi Tec”) common stock (Tokyo Stock Exchange: 5606.T). During 2008, the Company determined that the decline in the estimated value of certain private equity fund investments, with an aggregate carrying value of $66 million prior to the impairment, was other-than-temporary. Accordingly, for the year ended December 31, 2008, the Company recognized non-cash, pre-tax impairment charges of $23 million. A review of sector performance and other factors specific to the underlying investments in six funds having other-than-temporary declines in fair value, including the Heartland Fund (automotive and transportation sector of $10 million) and five other funds ($13 million.)
 
Income from financial investments, net, included in other, net, within other income (expense), net, and impairment charges for financial investments were as follows, in millions:
 
                         
    2010     2009     2008  
 
Realized gains from marketable securities
  $ 10     $     $  
Realized losses from marketable securities
    (8 )           (3 )
Dividend income from marketable securities
                 
Income from other investments, net
    7       3       4  
Dividend income from other investments
                 
                         
Income from financial investments, net
  $ 9     $ 3     $ 1  
                         
Impairment charges:
                       
Asahi Tec
  $ (28 )   $     $  
Private equity funds
    (4 )     (10 )     (23 )
Other private investments
    (2 )           (3 )
TriMas Corporation
                (31 )
Marketable securities
                (1 )
                         
Total impairment charges
  $ (34 )   $ (10 )   $ (58 )
                         
 
The impairment charges related to the Company’s financial investments recognized during 2010, 2009 and 2008 were based upon then-current estimates for the fair value of certain financial investments; such estimates could change in the near-term based upon future events and circumstances.
 
The fair value of the Company’s short-term and long-term fixed-rate debt instruments is based principally upon quoted market prices for the same or similar issues or the current rates available to the Company for debt with similar terms and remaining maturities. The aggregate estimated market value of short-term and long-term debt at December 31, 2010 was approximately $4.2 billion, compared with the aggregate carrying value of $4.1 billion. The aggregate estimated market value of short-term and long-term debt at December 31, 2009 was approximately $3.9 billion, compared with the aggregate carrying value of $4.0 billion.
Derivatives
Derivatives
 
F.  DERIVATIVES
 
At December 31, 2010, the Company, including certain European operations, had entered into foreign currency forward contracts with notional amounts of $43 million and $6 million to manage exposure to currency fluctuations in the European euro and the U.S. dollar, respectively. At December 31, 2009, the Company, including certain European operations, had entered into foreign currency forward contracts with notional amounts of $55 million and $10 million to manage exposure to currency fluctuations in the European euro and the U.S. dollar, respectively. Based upon year-end market prices, the Company had recorded (losses) gains of $(2) million and $(1) million to reflect the contract prices at December 31, 2010 and 2009, respectively. Gains (losses) related to these contracts are recorded in the Company’s consolidated statements of income in other income (expense), net. In the event that the counterparties fail to meet the terms of the foreign currency forward contracts, the Company’s exposure is limited to the aggregate foreign currency rate differential with such institutions.
 
At December 31, 2010, the Company had entered into foreign currency exchange contracts to hedge currency fluctuations related to intercompany loans denominated in non-functional currencies with notional amounts of $3 million. At December 31, 2010, the Company had recorded a $4 million loss on the foreign currency exchange contract, which was more than offset by gains related to the translation of loans and accounts denominated in non-functional currencies.
 
During 2010, the Company entered into several contracts to manage its exposure to increases in the price of copper and zinc. Based upon period-end market prices, the Company had recorded assets of $7 million to reflect contract prices at December 31, 2010. Gains (losses) related to these contracts are recorded in the Company’s consolidated statements of income in cost of goods sold. For the year ended December 31, 2010, the Company had recorded gains of $7 million related to these contracts.
 
The fair value of these derivative contracts is estimated on a recurring basis, quarterly, using Level 2 inputs (significant other observable inputs).
 
In 2009, the Company recognized a decrease in interest expense of $10 million related to the amortization of the gains resulting from the terminations (in 2008 and 2004) of two interest rate swap agreements. In 2008, the Company recognized a decrease in interest expense of $12 million related to the interest rate swap agreements.
Property and Equipment
Property and Equipment
 
G.  PROPERTY AND EQUIPMENT
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Land and improvements
  $ 190     $ 195  
Buildings
    1,030       1,044  
Machinery and equipment
    2,419       2,420  
                 
      3,639       3,659  
Less: Accumulated depreciation
    1,902       1,678  
                 
Total
  $ 1,737     $ 1,981  
                 
 
The Company leases certain equipment and plant facilities under noncancellable operating leases. Rental expense recorded in the consolidated statements of income totaled approximately $111 million, $135 million and $161 million during 2010, 2009 and 2008, respectively. Future minimum lease payments at December 31, 2010 were approximately as follows: 2011 — $75 million; 2012 — $48 million; 2013 — $28 million; 2014 — $18 million; and 2015 and beyond — $76 million.
 
The Company leases operating facilities from certain related parties, primarily former owners (and in certain cases, current management personnel) of companies acquired. The Company recorded rental expense to such related parties of approximately $6 million, $8 million and $10 million in 2010, 2009 and 2008, respectively.
 
During 2010, the Company decided to permanently close and hold for sale a cabinet manufacturing facility that had previously been idled. As a result of this decision, the Company estimated a fair value for the manufacturing facility using a market approach, considering the estimated fair values for other comparable buildings in the area where the facility is located (Level 2 inputs). The Company determined that there had been a decline in the estimated value of the facility and, accordingly, recognized a non-cash, pre-tax impairment charge of $67 million. The carrying value of the manufacturing facility was $99 million prior to impairment.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
H.  GOODWILL AND OTHER INTANGIBLE ASSETS
 
The changes in the carrying amount of goodwill for 2010 and 2009, by segment, were as follows, in millions:
 
                         
    Gross Goodwill
    Accumulated
    Net Goodwill
 
    At December 31,
    Impairment
    At December 31,
 
    2010     Losses     2010  
 
Cabinets and Related Products
  $ 587     $ (364 )   $ 223  
Plumbing Products
    536       (340 )     196  
Installation and Other Services
    1,819       (762 )     1,057  
Decorative Architectural Products
    294             294  
Other Specialty Products
    980       (367 )     613  
                         
Total
  $ 4,216     $ (1,833 )   $ 2,383  
                         
 
                                                                         
    Gross Goodwill
    Accumulated
    Net Goodwill
                Pre-tax
          Net Goodwill
       
    At December 31,
    Impairment
    At December 31,
          Discontinued
    Impairment
          At December 31,
       
    2009     Losses     2009     Additions(A)     Operations     Charge     Other(B)     2010        
 
Cabinets and Related Products
  $ 590     $ (364 )   $ 226     $     $     $     $ (3 )   $ 223          
Plumbing Products
    547       (340 )     207                         (11 )     196          
Installation and Other Services
    1,819       (51 )     1,768                   (711 )           1,057          
Decorative Architectural Products
    294             294                               294          
Other Specialty Products
    980       (367 )     613                               613          
                                                                         
Total
  $ 4,230     $ (1,122 )   $ 3,108     $     $     $ (711 )   $ (14 )   $ 2,383          
                                                                         
 
                                                                         
    Gross Goodwill
    Accumulated
    Net Goodwill
                Pre-tax
          Net Goodwill
       
    At December 31,
    Impairment
    At December 31,
          Discontinued
    Impairment
          At December 31,
       
    2008     Losses     2008     Additions(A)     Operations     Charge     Other(B)     2009        
 
Cabinets and Related Products
  $ 589     $ (364 )   $ 225     $     $     $     $ 1     $ 226          
Plumbing Products
    549       (301 )     248       4       (13 )     (39 )     7       207          
Installation and Other Services
    1,819       (51 )     1,768                               1,768          
Decorative Architectural Products
    294             294                               294          
Other Specialty Products
    980       (144 )     836                   (223 )           613          
                                                                         
Total
  $ 4,231     $ (860 )   $ 3,371     $ 4     $ (13 )   $ (262 )   $ 8     $ 3,108          
                                                                         
 
 
(A) Additions include acquisitions.
 
(B) Other principally includes the effect of foreign currency translation and purchase price adjustments related to prior-year acquisitions.
 
In the fourth quarters of 2010 and 2009, the Company completed its annual impairment testing of goodwill and other indefinite-lived intangible assets. During each year, and prior to the fourth quarter testing, there were no events or circumstances that would have indicated potential impairment.
 
The impairment tests in 2010 and 2009 indicated that goodwill recorded for certain of the Company’s reporting units was impaired. The Company recognized the non-cash, pre-tax impairment charges for goodwill of $711 million ($587 million, after tax) and $262 million ($180 million, after tax) for 2010 and 2009, respectively. In 2010, the pre-tax impairment charge in the Installation and Other Services segment reflects the Company’s expectation that the recovery in the new home construction market will be modestly slower than previously anticipated. In 2009, the pre-tax impairment charge in the Plumbing Products segment relates to a European shower enclosure manufacturer; the pre-tax impairment charge in the Other Specialty Products segment relates to the Company’s North American manufacturer of staple gun tackers and other fastening tools. The impairment charges in 2009 reflect the anticipated long-term outlook for the reporting units, including declining demand for certain products, as well as decreased operating profit margins.
 
Other indefinite-lived intangible assets were $185 million and $196 million at December 31, 2010 and 2009, respectively, and principally included registered trademarks. In 2010, the impairment test indicated that the registered trademark for several small installation service businesses in North America in the Installation and Other Services segment and the registered trademark for a North American business unit in the Plumbing Products segment were impaired due to changes in the anticipated long-term outlook for the business units. The Company recognized non-cash, pre-tax impairment charges for other indefinite-lived intangible assets of $10 million ($6 million, after tax) in 2010.
 
The carrying value of the Company’s definite-lived intangible assets was $84 million at December 31, 2010 (net of accumulated amortization of $75 million) and $94 million at December 31, 2009 (net of accumulated amortization of $67 million) and principally included customer relationships and non-compete agreements, with a weighted average amortization period of 15 years in both 2010 and 2009. Amortization expense related to the definite-lived intangible assets was $11 million, $11 million and $16 million in 2010, 2009 and 2008, respectively.
 
At December 31, 2010, amortization expense related to the definite-lived intangible assets during each of the next five years was as follows: 2011 — $11 million; 2012 — $10 million; 2013 — $9 million; 2014 — $9 million; and 2015 — $9 million.
Other Assets
Other Assets
 
I.  OTHER ASSETS
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Financial investments (Note E)
  $ 181     $ 242  
In-store displays, net
    43       44  
Debenture expense
    34       25  
Notes receivable
    2       3  
Other
    27       31  
                 
Total
  $ 287     $ 345  
                 
 
In-store displays are amortized using the straight-line method over the expected useful life of three years; the Company recognized amortization expense related to in-store displays of $33 million, $44 million and $43 million in 2010, 2009 and 2008, respectively. Cash spent for displays was $32 million, $26 million and $37 million in 2010, 2009 and 2008, respectively.
Accrued Liabilities
Accrued Liabilities
J.  ACCRUED LIABILITIES
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Salaries, wages and commissions
  $ 177     $ 193  
Insurance
    176       193  
Warranty (Note S)
    107       109  
Advertising and sales promotion
    90       80  
Interest
    78       68  
Employee retirement plans
    43       36  
Property, payroll and other taxes
    32       35  
Dividends payable
    27       27  
Litigation
    5       9  
Plant closures
    4       3  
Other
    80       86  
                 
Total
  $ 819     $ 839  
                 
Debt
Debt
 
K.  DEBT
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Notes and debentures:
               
5.875%, due July 15, 2012
  $ 791     $ 850  
7.125%, due Aug. 15, 2013
    200       200  
4.8%, due June 15, 2015
    500       500  
6.125%, due Oct. 3, 2016
    1,000       1,000  
5.85%, due Mar. 15, 2017
    300       300  
6.625%, due Apr. 15, 2018
    114       114  
7.125%, due Mar. 15, 2020
    500        
7.75%, due Aug. 1, 2029
    296       296  
6.5%, due Aug. 15, 2032
    300       300  
Zero Coupon Convertible Senior Notes due 2031 (accreted value)
    57       55  
Floating-Rate Notes, due Mar. 12, 2010
          300  
Other
    40       53  
                 
      4,098       3,968  
Less: Current portion
    66       364  
                 
Total Long-term debt
  $ 4,032     $ 3,604  
                 
 
All of the notes and debentures above are senior indebtedness and, other than the 6.625% notes due 2018 and the 7.75% notes due 2029, are redeemable at the Company’s option.
 
On March 10, 2010, the Company issued $500 million of 7.125% Notes (“Notes”) due March 15, 2020. The notes are senior indebtedness and are redeemable at the Company’s option.
 
The Company retired $300 million of floating rate notes on March 12, 2010, the scheduled maturity date.
 
During 2010, the Company repurchased $59 million of 5.875% Notes due July 2012, in open-market transactions. The Company paid a premium of $2 million over par value on the purchase of the notes; this cost was included in interest expense.
 
In July 2001, the Company issued $1.9 billion principal amount at maturity of Zero Coupon Convertible Senior Notes due 2031 (“Old Notes”), resulting in gross proceeds of $750 million. The issue price per Note was $394.45 per $1,000 principal amount at maturity, which represented a yield to maturity of 3.125% compounded semi-annually. In December 2004, the Company completed an exchange of the outstanding Old Notes for Zero Coupon Convertible Senior Notes Series B due July 2031 (“New Notes or Notes”). The Company will not pay interest in cash on the Notes prior to maturity, except in certain circumstances, including possible contingent interest payments that are not expected to be material. Holders of the Notes have the option to require that the Notes be repurchased by the Company on July 20, 2011 and every five years thereafter. Upon conversion of the Notes, the Company will pay the principal return, equal to the lesser of (1) the accreted value of the Notes in only cash, and (2) the conversion value, as defined, which will be settled in cash or shares of Company common stock, or a combination of both, at the option of the Company. The Notes are convertible if the average price of Company common stock for the 20 days immediately prior to the conversion date exceeds 117%, declining by 1/3% each year thereafter, of the accreted value of the Notes divided by the conversion rate of 12.7317 shares for each $1,000 principal amount at maturity of the Notes. Notes also become convertible if the Company’s credit rating is reduced to below investment grade, or if certain actions are taken by the Company. The Company may at any time redeem all or part of the Notes at their then accreted value. On January 20, 2007, holders of $1.8 billion (94 percent) principal amount at maturity of the Notes required the Company to repurchase their Notes at a cash value of $825 million.
 
A credit rating agency (i.e., Moody’s or Standard and Poor’s) is an entity that assigns credit ratings for issuers of certain types of debt obligations. In December 2008, one rating agency reduced the credit rating on the Company’s debt to below investment grade; as a result, the Notes are convertible on demand. The Company does not anticipate conversion of the Notes since, based on the terms, it would not currently be profitable for holders of the Notes to exercise the option to convert the Notes.
 
At both December 31, 2010 and 2009, there were outstanding $108 million principal amount at maturity of Notes, with an accreted value of $57 million and $55 million, respectively, which has been reclassified to short-term debt.
 
On June 21, 2010, the Company entered into a Credit Agreement (the “Credit Agreement”) with a bank group, with an aggregate commitment of $1.25 billion with a maturity date of January 10, 2014. The Company’s 5-Year Revolving Credit Agreement dated as of November 5, 2004, as amended, was terminated at that time.
 
The Credit Agreement provides for an unsecured revolving credit facility available to the Company and one of its foreign subsidiaries, in U.S. dollars, European euros and certain other currencies. Borrowings under the revolver denominated in euros are limited to $500 million, equivalent. The Company can also borrow swingline loans up to $150 million and obtain letters of credit of up to $250 million. Any outstanding Letters of Credit reduce the Company’s borrowing capacity. At December 31, 2010, the Company had $99 million of outstanding and unused Letters of Credit, reducing the Company’s borrowing capacity by such amount.
 
Revolving credit loans bear interest under the Credit Agreement, at the Company’s option: at (A) a rate per annum equal to the greatest of (i) prime rate, (ii) the Federal Funds effective rate plus 0.50% and (iii) LIBOR plus 1.0% (the “Alternative Base Rate”); plus an applicable margin based upon the then-applicable corporate credit ratings of the Company; or (B) LIBOR plus an applicable margin based upon the then-applicable corporate credit ratings of the Company. The foreign currency revolving credit loans bear interest at a rate equal to LIBOR plus an applicable margin based upon the then-applicable corporate credit ratings of the Company.
 
The Credit Agreement contains financial covenants requiring the Company to maintain (A) a maximum debt to total capitalization ratio of 65 percent, and (B) a minimum interest coverage ratio equal to or greater than (i) 2.25 to 1.0 through the quarter ending on September 30, 2011 and (ii) 2.50 to 1.0 thereafter. The debt to total capitalization ratio allows the add-back, if incurred, of up to the first $500 million of certain non-cash charges, including goodwill and other intangible asset impairment charges, occurring from and after April 1, 2010, that would negatively impact shareholders’ equity.
 
Based on the limitations of the debt to total capitalization covenant (before the amendment discussed below), at December 31, 2010, the Company had additional borrowing capacity, subject to availability, of up to $113 million. Alternatively, at December 31, 2010, the Company could absorb a reduction to shareholders’ equity of approximately $61 million, and remain in compliance with the debt to total capitalization covenant.
 
In order to borrow under the Credit Agreement, there must not be any default in the Company’s covenants in the Credit Agreement (i.e., in addition to the two financial covenants, principally limitations on subsidiary debt, negative pledge restrictions, legal compliance requirements and maintenance of properties and insurance) and the Company’s representations and warranties in the Credit Agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, since December 31, 2009, in each case, no material ERISA or environmental non-compliance and no material tax deficiency).
 
At December 31, 2010 and 2009, the Company was in compliance with the requirements of the New Credit Agreement and the Amended Five-Year Revolving Credit Agreement, as applicable.
 
There were no borrowings under the Credit Agreement and the Amended Five-Year Revolving Credit Agreement at December 31, 2010 and 2009, as applicable.
 
Subsequent Event.  On February 11, 2011, the Company entered into an amendment (deemed to be effective and applicable as of December 31, 2010) of the Credit Agreement with its bank group (the “Amendment”). The Amendment provides for the add-back to shareholders’ equity in the Company’s maximum debt to capitalization covenant of (i) certain non-cash charges (including impairment charges for financial investments and goodwill and other intangible assets) and (ii) changes to the valuation allowance on the Company’s deferred tax assets included in income tax expense, each taken in 2010, which aggregate $986 million after tax. The Amendment also permits the Company to add-back, if incurred, up to $350 million in the aggregate of future non-cash charges. We currently have borrowing capacity approximating $1 billion available under the Credit Agreement.
 
At December 31, 2010, the maturities of long-term debt during each of the next five years were as follows: 2011 — $66 million; 2012 — $808 million; 2013 — $201 million; 2014 — $1 million; and 2015 — $501 million.
 
Interest paid was $241 million, $226 million and $232 million in 2010, 2009 and 2008, respectively.
Stock-Based Compensation
Stock-Based Compensation
 
L.  STOCK-BASED COMPENSATION
 
The Company’s 2005 Long Term Stock Incentive Plan (the “2005 Plan”) provides for the issuance of stock-based incentives in various forms to employees and non-employee Directors of the Company. At December 31, 2010, outstanding stock-based incentives were in the form of long-term stock awards, stock options, phantom stock awards and stock appreciation rights.
 
Pre-tax compensation expense (income) and the income tax benefit related to these stock-based incentives were as follows, in millions:
 
                         
    2010     2009     2008  
 
Long-term stock awards
  $ 37     $ 37     $ 43  
Stock options
    22       25       36  
Phantom stock awards and stock appreciation rights
    3       7       (5 )
                         
Total
  $ 62     $ 69     $ 74  
                         
Income tax benefit
  $ 23     $ 26     $ 27  
                         
 
In 2009, the Company recognized $6 million of accelerated stock compensation expense (for previously granted stock awards and options) related to the retirement from full-time employment of the Company’s Executive Chairman of the Board of Directors; he continues to serve as a non-executive, non-employee Chairman of the Board of Directors.
 
At December 31, 2010, a total of 11,860,100 shares of Company common stock were available under the 2005 Plan for the granting of stock options and other long-term stock incentive awards.
 
Long-Term Stock Awards
 
Long-term stock awards are granted to key employees and non-employee Directors of the Company and do not cause net share dilution inasmuch as the Company continues the practice of repurchasing and retiring an equal number of shares on the open market.
 
The Company’s long-term stock award activity was as follows, shares in millions:
 
                         
    2010   2009   2008
 
Unvested stock award shares at January 1
    9       8       9  
Weighted average grant date fair value
  $ 21     $ 26     $ 28  
Stock award shares granted
    3       2       2  
Weighted average grant date fair value
  $ 14     $ 8     $ 21  
Stock award shares vested
    2       1       2  
Weighted average grant date fair value
  $ 23     $ 26     $ 26  
Stock award shares forfeited
                1  
Weighted average grant date fair value
  $ 20     $ 24     $ 28  
Unvested stock award shares at December 31
    10       9       8  
Weighted average grant date fair value
  $ 19     $ 21     $ 26  
 
At December 31, 2010, 2009 and 2008, there was $127 million, $126 million and $155 million, respectively, of unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of five years.
 
The total market value (at the vesting date) of stock award shares which vested during 2010, 2009 and 2008 was $22 million, $16 million and $30 million, respectively.
 
Stock Options
 
Stock options are granted to key employees of the Company. The exercise price equals the market price of the Company’s common stock at the grant date. These options generally become exercisable (vest ratably) over five years beginning on the first anniversary from the date of grant and expire no later than 10 years after the grant date. The 2005 Plan does not permit the granting of restoration stock options, except for restoration options resulting from options previously granted under the 1991 Plan. Restoration stock options become exercisable six months from the date of grant.
 
The Company granted 5,260,100 of stock option shares, including restoration stock option shares, during 2010 with a grant date exercise price range of $11 to $15 per share. During 2010, 3,742,700 stock option shares were forfeited (including options that expired unexercised).
 
The Company’s stock option activity was as follows, shares in millions:
 
                         
    2010   2009   2008
 
Option shares outstanding, January 1
    36       31       26  
Weighted average exercise price
  $ 23     $ 25     $ 27  
Option shares granted, including restoration options
    5       6       6  
Weighted average exercise price
  $ 14     $ 8     $ 19  
Option shares exercised
                 
Aggregate intrinsic value on date of exercise (A)
  $ 1 million     $ – million     $ – million  
Weighted average exercise price
  $ 8     $     $ 20  
Option shares forfeited
    4       1       1  
Weighted average exercise price
  $ 23     $ 22     $ 27  
Option shares outstanding, December 31
    37       36       31  
Weighted average exercise price
  $ 21     $ 23     $ 25  
Weighted average remaining option term (in years)
    6       6       6  
Option shares vested and expected to vest, December 31
    37       36       31  
Weighted average exercise price
  $ 22     $ 23     $ 25  
Aggregate intrinsic value (A)
  $ 23 million     $ 31 million     $ – million  
Weighted average remaining option term (in years)
    6       6       6  
Option shares exercisable (vested), December 31
    22       21       17  
Weighted average exercise price
  $ 25     $ 26     $ 26  
Aggregate intrinsic value (A)
  $ 4 million     $ – million     $ –million  
Weighted average remaining option term (in years)
    4       4       5  
 
 
(A) Aggregate intrinsic value is calculated using the Company’s stock price at each respective date, less the exercise price (grant date price) multiplied by the number of shares.
 
At December 31, 2010, 2009 and 2008, there was $45 million, $41 million and $59 million, respectively, of unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options; such options had a weighted average remaining vesting period of three years.
 
The weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model, was as follows:
 
                         
    2010   2009   2008
 
Weighted average grant date fair value
  $ 5.30     $ 2.28     $ 3.72  
Risk-free interest rate
    2.76 %     2.60 %     3.25 %
Dividend yield
    2.17 %     3.70 %     4.96 %
Volatility factor
    46.03 %     39.18 %     32.00 %
Expected option life
    6 years       6 years       6 years  
 
The following table summarizes information for stock option shares outstanding and exercisable at December 31, 2010, shares in millions:
 
                                         
Option Shares Outstanding   Option Shares Exercisable
        Weighted
           
        Average
  Weighted
      Weighted
        Remaining
  Average
      Average
Range of
  Number of
  Option
  Exercise
  Number of
  Exercise
Prices   Shares   Term   Price   Shares   Price
 
$ 8-23       21     7 Years   $ 15       8     $ 19  
$ 24-28       6     4 Years   $ 27       5     $ 27  
$ 29-32       10     5 Years   $ 30       9     $ 30  
$ 33-38           4 Years   $ 34           $ 34  
                                         
$ 8-38       37     6 Years   $ 21       22     $ 25  
                                         
 
Phantom Stock Awards and Stock Appreciation Rights (“SARs”)
 
The Company grants phantom stock awards and SARs to certain non-U.S. employees.
 
Phantom stock awards are linked to the value of the Company’s common stock on the date of grant and are settled in cash upon vesting, typically over 5 to 10 years. The Company accounts for phantom stock awards as liability-based awards; the compensation expense is initially measured as the market price of the Company’s common stock at the grant date and is recognized over the vesting period. The liability is remeasured and adjusted at the end of each reporting period until the awards are fully-vested and paid to the employees. The Company recognized expense (income) of $2 million, $3 million and $(2) million related to the valuation of phantom stock awards for 2010, 2009 and 2008, respectively. In 2010, 2009 and 2008, the Company granted 299,650 shares, 318,920 shares and 234,800 shares, respectively, of phantom stock awards with an aggregate fair value of $4 million, $3 million and $5 million, respectively, and paid $1 million, $1 million and $2 million of cash in 2010, 2009 and 2008, respectively, to settle phantom stock awards.
 
SARs are linked to the value of the Company’s common stock on the date of grant and are settled in cash upon exercise. The Company accounts for SARs using the fair value method, which requires outstanding SARs to be classified as liability-based awards and valued using a Black-Scholes option pricing model at the grant date; such fair value is recognized as compensation expense over the vesting period, typically five years. The liability is remeasured and adjusted at the end of each reporting period until the SARs are exercised and payment is made to the employees or the SARs expire. The Company recognized expense (income) of $1 million, $4 million and $(3) million related to the valuation of SARs for 2010, 2009 and 2008, respectively. During 2010, 2009 and 2008, the Company granted SARs for 429,300 shares, 438,200 shares and 597,200 shares, respectively, with an aggregate fair value of $2 million, $1 million and $2 million in 2010, 2009 and 2008, respectively.
 
Information related to phantom stock awards and SARs was as follows, in millions:
 
                                 
    Phantom Stock
  Stock Appreciation
    Awards
  Rights
    At December 31,   At December 31,
    2010   2009   2010   2009
 
Accrued compensation cost liability
  $ 6     $ 5     $ 5     $ 4  
Unrecognized compensation cost
  $ 5     $ 5     $ 2     $ 3  
Equivalent common shares
    1       1       2       2  
Employee Retirement Plans
Employee Retirement Plans
 
M.  EMPLOYEE RETIREMENT PLANS
 
The Company sponsors qualified defined-benefit and defined-contribution retirement plans for most of its employees. In addition to the Company’s qualified defined-benefit pension plans, the Company has unfunded non-qualified defined-benefit pension plans covering certain employees, which provide for benefits in addition to those provided by the qualified pension plans. Substantially all salaried employees participate in non-contributory defined-contribution retirement plans, to which payments are determined annually by the Organization and Compensation Committee of the Board of Directors. Aggregate charges to earnings under the Company’s defined-benefit and defined-contribution retirement plans were $37 million and $47 million in 2010, $63 million and $35 million in 2009 and $38 million and $30 million in 2008, respectively.
 
In March 2009, based on management’s recommendation, the Board of Directors approved a plan to freeze all future benefit accruals under substantially all of the Company’s domestic qualified and non-qualified defined-benefit pension plans. The freeze was effective January 1, 2010. As a result of this action, the liabilities for the plans impacted by the freeze were remeasured and the Company recognized a curtailment charge of $8 million in the first quarter of 2009.
 
Changes in the projected benefit obligation and fair value of plan assets, and the funded status of the Company’s defined-benefit pension plans were as follows, in millions:
 
                                 
    2010     2009  
    Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Changes in projected benefit obligation:
                               
Projected benefit obligation at January 1
  $ 806     $ 152     $ 758     $ 147  
Service cost
    3             9       1  
Interest cost
    45       9       45       9  
Participant contributions
    1             1        
Actuarial loss (gain), net
    61       12       27       9  
Foreign currency exchange
    (10 )           9        
Disposition
                (3 )      
Recognized curtailment loss
    (1 )           (3 )     (5 )
Benefit payments
    (37 )     (10 )     (37 )     (9 )
                                 
Projected benefit obligation at December 31
  $ 868     $ 163     $ 806     $ 152  
                                 
Changes in fair value of plan assets:
                               
Fair value of plan assets at January 1
  $ 474     $     $ 414     $  
Actual return on plan assets
    46             74        
Foreign currency exchange
    (3 )           7        
Company contributions
    31       10       18       9  
Participant contributions
    1             1        
Disposition
                (1 )      
Expenses, other
    (3 )           (2 )      
Benefit payments
    (37 )     (10 )     (37 )     (9 )
                                 
Fair value of plan assets at December 31
  $ 509     $     $ 474     $  
                                 
Funded status at December 31:
  $ (359 )   $ (163 )   $ (332 )   $ (152 )
                                 
 
Amounts in the Company’s consolidated balance sheets were as follows, in millions:
 
                                 
    At December 31, 2010     At December 31, 2009  
    Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Accrued liabilities
  $ (3 )   $ (11 )   $ (3 )   $ (10 )
Deferred income taxes and other
    (356 )     (152 )     (329 )     (142 )
                                 
Total net liability
  $ (359 )   $ (163 )   $ (332 )   $ (152 )
                                 
 
 
Amounts in accumulated other comprehensive income before income taxes were as follows, in millions:
 
                                 
    At December 31, 2010     At December 31, 2009  
    Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Net loss
  $ 326     $ 31     $ 287     $ 20  
Net transition obligation
    1             1        
Net prior service cost
    (1 )           (2 )      
                                 
Total
  $ 326     $ 31     $ 286     $ 20  
                                 
 
Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions:
 
                                 
    At December 31
    2010   2009
    Qualified   Non-Qualified   Qualified   Non-Qualified
 
Projected benefit obligation
  $ 868     $ 163     $ 797     $ 152  
Accumulated benefit obligation
  $ 866     $ 163     $ 793     $ 152  
Fair value of plan assets
  $ 509     $     $ 466     $  
 
The projected benefit obligation was in excess of plan assets for all of the Company’s qualified defined-benefit pension plans at December 31, 2010 and 2009.
 
Net periodic pension cost for the Company’s defined-benefit pension plans was as follows, in millions:
 
                                                 
    2010     2009     2008  
    Qualified     Non-Qualified     Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Service cost
  $ 3     $     $ 9     $ 1     $ 14     $ 2  
Interest cost
    45       9       45       9       46       9  
Expected return on plan assets
    (34 )           (29 )           (48 )      
Recognized prior service cost
    (1 )                             2  
Recognized curtailment loss
                3       5       1        
Recognized net loss
    10             12             1        
                                                 
Net periodic pension cost
  $ 23     $ 9     $ 40     $ 15     $ 14     $ 13  
                                                 
 
The Company expects to recognize $11 million of pre-tax net loss from accumulated other comprehensive income into net periodic pension cost in 2011 related to its defined-benefit pension plans.
 
Plan Assets
 
The Company’s qualified defined-benefit pension plan weighted average asset allocation, which is based upon fair value, was as follows:
 
                 
    At December 31  
    2010     2009  
 
Equity securities
    67%       71%  
Debt securities
    31%       26%  
Other
    2%       3%  
                 
Total
    100%       100%  
                 
 
Plan assets included 1.2 million shares for each of the years, of Company common stock valued at $14 million and $16 million at December 31, 2010 and 2009, respectively.
 
The Company’s qualified defined-benefit pension plans have adopted accounting guidance that defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Accounting guidance defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
 
Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2010.
 
Common and preferred stocks, debt securities and short-term and other investments:  Valued at the closing price reported on the active market on which the individual securities are traded.
 
Limited Partnerships:  Valued based on an estimated fair value. There is no active trading market for these investments and they are for the most part illiquid. Due to the significant unobservable inputs, the fair value measurements are a Level 3 input.
 
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
 
The following table sets forth by level, within the fair value hierarchy, the qualified defined-benefit pension plan assets at fair value as of December 31, 2010 and 2009, in millions.
 
                                 
    Assets at Fair Value as of December 31,
 
    2010  
    Level 1     Level 2     Level 3     Total  
 
Common and preferred stocks
  $ 261     $ 19     $     $ 280  
Limited Partnerships
                64       64  
Debt securities
    100       57             157  
Short-term and other investments
    8                   8  
                                 
Total assets at fair value
  $ 369     $ 76     $ 64     $ 509  
                                 
 
                                 
    Assets at Fair Value as of December 31,
 
    2009  
    Level 1     Level 2     Level 3     Total  
 
Common and preferred stocks
  $ 267     $ 17     $     $ 284  
Limited Partnerships
                52       52  
Debt securities
    97       25             122  
Short-term and other investments
    16                   16  
                                 
Total assets at fair value
  $ 380     $ 42     $ 52     $ 474  
                                 
 
The table below sets forth a summary of changes in the fair value of the qualified defined-benefit pension plan level 3 assets for the year ended December 31, 2010, in millions.
 
                 
    Year Ended
    Year Ended
 
    December 31, 2010
    December 31, 2009
 
    Limited Partnerships     Limited Partnerships  
 
Balance, beginning of year
  $ 52     $ 48  
Purchases, sales, issuances and settlements (net)
    12       4  
Unrealized losses
           
                 
Balance, end of year
    64       52  
                 
 
Assumptions
 
Major assumptions used in accounting for the Company’s defined-benefit pension plans were as follows:
 
                         
    December 31
    2010   2009   2008
 
Discount rate for obligations
    5.30%       5.80%       6.10%  
Expected return on plan assets
    7.25%       8.00%       8.00%  
Rate of compensation increase
    1.00%       2.00%       4.00%  
Discount rate for net periodic pension cost
    5.80%       6.10%       6.25%  
 
The discount rate for obligations for 2010 was based upon the expected duration of each defined-benefit pension plan’s liabilities matched to the December 31, 2010 Towers Watson Rate Link Curve. Such rates for the Company’s defined benefit pension plans ranged from 2.30 percent to 5.55 percent, with the most significant portion of the liabilities having a discount rate for obligations of 5.0 percent or higher at December 31, 2010. The decline in the weighted average discount rate to 5.3 percent in 2010 from 5.8 percent in 2009 was principally the result of lower long-term interest rates in the bond market in 2010. The discount rate for obligations for 2009 was based upon the expected duration of each defined-benefit plan’s liabilities matched to the widely used Citigroup Pension Discount Curve and Liability index for December 31, 2009. The weighted average discount rates in 2010 and 2009 were also affected by the freezing of all future benefit accruals for substantially all of the Company’s domestic qualified and non-qualified defined-benefit plans, which shortened the period of future payments.
 
The Company determined the expected long-term rate of return on plan assets of 7.25 percent based upon an analysis of expected and historical rates of return of various asset classes utilizing the current and long-term target asset allocation of the plan assets. The projected asset return at December 31, 2010 also considered near term returns, including current market conditions and also that pension assets are long-term in nature. The actual annual rate of return on the Company’s pension plan assets was 4.3 percent and 3.3 percent for the 10-year periods ended December 31, 2010 and 2009, respectively. Although these rates of return are less than the Company’s current expected long-term rate of return on plan assets, the Company notes that these 10-year periods include two significant declines in the equity markets. Accordingly, the Company believes a 7.25 percent expected long-term rate of return is reasonable.
 
The investment objectives seek to minimize the volatility of the value of the Company’s plan assets relative to pension liabilities and to ensure plan assets are sufficient to pay plan benefits. The Company, based upon discussions with its pension investment advisor, reduced its equity allocation to 70 percent from 80 percent; increased its fixed-income allocation to 25 percent from 10 percent and allocated 5 percent to alternative investments. The revised asset allocation of the investment portfolio was developed with the objective of achieving the Company’s expected rate of return and reducing volatility of asset returns, and considered the freezing of future benefits. The equity portfolios are invested in individual securities or funds that are expected to mirror broad market returns for equity securities. The fixed-income portfolio is invested in corporate bonds, bond index funds or U.S. Treasury securities. The increased allocation to fixed-income securities partially matches the bond-like and long-term nature of the pension liabilities. In 2010, the pension investment advisor recommended that, longer term, the Company should achieve the following targeted asset portfolio: 45 percent equities, 25 percent fixed-income, 15 percent global assets (combination of equity and fixed-income) and 15 percent alternative investments (such as private equity, commodities and hedge funds). The Company expects to achieve this allocation by December 31, 2011. This targeted portfolio is expected to yield a long-term rate of return of 7.25 percent.
 
The fair value of the Company’s plan assets is subject to risk including significant concentrations of risk in the Company’s plan assets related to equity, interest rate and operating risk. In order to ensure plan assets are sufficient to pay benefits, a portion of plan assets is allocated to equity investments that are expected, over time, to earn higher returns with more volatility than fixed-income investments which more closely match pension liabilities. Within equity, risk is mitigated by targeting a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process.
 
In order to minimize asset volatility relative to the liabilities, a portion of plan assets are allocated to fixed-income investments that are exposed to interest rate risk. Rate increases generally will result in a decline in fixed-income assets, while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities.
 
The Company has targeted alternative investments such as hedge funds, private equity funds and commodities that are expected to comprise 15 percent of the pension assets. It is expected that the alternative investments would have a higher rate of return than the targeted overall long-term return of 7.25 percent. However, these investments are subject to greater volatility, due to their nature, than a portfolio of equities and fixed-income investments, and would be less liquid than financial instruments that trade on public markets.
 
Potential events or circumstances that could have a negative effect on estimated fair value include the risks of inadequate diversification and other operating risks. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight, plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance and audit reviews to ensure adherence to these policies. In addition, the Company periodically seeks the input of its independent advisor to ensure the investment policy is appropriate.
 
Other
 
The Company sponsors certain post-retirement benefit plans that provide medical, dental and life insurance coverage for eligible retirees and dependents in the United States based upon age and length of service. The aggregate present value of the unfunded accumulated post-retirement benefit obligation was $13 million at both December 31, 2010 and 2009.
 
Cash Flows
 
At December 31, 2010, the Company expected to contribute approximately $30 million to $35 million to its qualified defined-benefit pension plans to meet ERISA requirements in 2011. The Company also expected to pay benefits of $3 million and $10 million to participants of its unfunded foreign and non-qualified (domestic) defined-benefit pension plans, respectively, in 2011.
 
At December 31, 2010, the benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter, relating to the Company’s defined-benefit pension plans, were as follows, in millions:
 
                 
    Qualified
  Non-Qualified
    Plans   Plans
 
2011
  $ 38     $ 10  
2012
  $ 40     $ 11  
2013
  $ 41     $ 11  
2014
  $ 41     $ 12  
2015
  $ 43     $ 12  
2016-2020
  $ 235     $ 59  
Stockholders' Equity
Shareholders' Equity
 
N.  SHAREHOLDERS’ EQUITY
 
In July 2007, the Company’s Board of Directors authorized the repurchase for retirement of up to 50 million shares of the Company’s common stock in open-market transactions or otherwise. At December 31, 2010, the Company had remaining authorization to repurchase up to 27 million shares. During 2010, the Company repurchased and retired three million shares of Company common stock, for cash aggregating $45 million to offset the dilutive impact of the 2010 grant of three million shares of long-term stock awards. The Company repurchased and retired two million common shares in 2009 and nine million common shares in 2008 for cash aggregating $11 million and $160 million in 2009 and 2008, respectively.
 
On the basis of amounts paid (declared), cash dividends per common share were $.30 ($.30) in 2010, $.46 ($.30) in 2009 and $.925 ($.93) in 2008, respectively. In 2009, the Company decreased its quarterly cash dividend to $.075 per common share from $.235 per common share.
 
Accumulated Other Comprehensive (Loss) Income
 
The components of accumulated other comprehensive income attributable to Masco Corporation were as follows, in millions:
 
                 
    At December 31
    2010   2009
 
Cumulative translation adjustments
  $ 505     $ 546  
Unrealized gain on marketable securities, net
    26       25  
Unrecognized prior service cost and net loss, net
    (258 )     (205 )
                 
Accumulated other comprehensive income
  $ 273     $ 366  
                 
 
The unrealized gain on marketable securities, net, is reported net of income tax expense of $14 million at both December 31, 2010 and 2009. The unrecognized prior service cost and net loss, net, is reported net of income tax benefit of $105 million at both December 31, 2010 and 2009.
Segment Information
Segment Information
 
O. SEGMENT INFORMATION
 
The Company’s reportable segments are as follows:
 
Cabinets and Related Products – principally includes assembled and ready-to-assemble kitchen and bath cabinets; home office workstations; entertainment centers; storage products; bookcases; and kitchen utility products.
 
Plumbing Products – principally includes faucets; plumbing fittings and valves; showerheads and hand showers; bathtubs and shower enclosures; and spas.
 
Installation and Other Services – principally includes the sale, installation and distribution of insulation and other building products.
 
Decorative Architectural Products – principally includes paints and stains; and cabinet, door, window and other hardware.
 
Other Specialty Products – principally includes windows, window frame components and patio doors; staple gun tackers, staples and other fastening tools.
 
The above products and services are sold to the home improvement and new home construction markets through mass merchandisers, hardware stores, home centers, builders, distributors and other outlets for consumers and contractors.
 
The Company’s operations are principally located in North America and Europe. The Company’s country of domicile is the United States of America.
 
Corporate assets consist primarily of real property, equipment, cash and cash investments and other investments.
 
The Company’s segments are based upon similarities in products and services and represent the aggregation of operating units, for which financial information is regularly evaluated by the Company’s corporate operating executives in determining resource allocation and assessing performance and is periodically reviewed by the Board of Directors. Accounting policies for the segments are the same as those for the Company. The Company primarily evaluates performance based upon operating profit (loss) and, other than general corporate expense, allocates specific corporate overhead to each segment. The evaluation of segment operating profit also excludes the charge for defined-benefit plan curtailment, the charge for litigation settlements, the accelerated stock compensation expense and the (loss) on corporate fixed assets, net.
 
Information about the Company by segment and geographic area was as follows, in millions:
 
                                                                         
    Net Sales (1)(2)(3)(4)(5)     Operating (Loss) Profit(5)(6)     Assets at December 31 (11)(12)  
    2010     2009     2008     2010     2009     2008     2010     2009     2008  
 
The Company’s operations by segment were:
                                                                       
Cabinets and Related Products
  $ 1,464     $ 1,674     $ 2,276     $ (250 )   $ (64 )   $ 4     $ 1,108     $ 1,382     $ 1,518  
Plumbing Products
    2,692       2,564       3,002       331       237       110       1,866       1,815       1,877  
Installation and Other Services
    1,147       1,256       1,861       (834 )     (131 )     (46 )     1,537       2,339       2,454  
Decorative Architectural Products
    1,693       1,714       1,629       345       375       299       851       871       878  
Other Specialty Products
    596       584       716       19       (199 )     (124 )     1,182       1,197       1,441  
                                                                         
Total
  $ 7,592     $ 7,792     $ 9,484     $ (389 )   $ 218     $ 243     $ 6,544     $ 7,604     $ 8,168  
                                                                         
The Company’s operations by geographic area were:
                                                                       
North America
  $ 5,929     $ 6,135     $ 7,482     $ (543 )   $ 93     $ 493     $ 5,063     $ 6,113     $ 6,648  
International, principally Europe
    1,663       1,657       2,002       154       125       (250 )     1,481       1,491       1,520  
                                                                         
Total, as above
  $ 7,592     $ 7,792     $ 9,484       (389 )     218       243       6,544       7,604       8,168  
                                                                         
General corporate expense, net (7)
    (110 )     (140 )     (144 )                        
Charge for defined-benefit curtailment (8)
          (8 )                              
Charge for litigation settlements (9)
          (7 )     (9 )                        
Accelerated stock compensation expense (10)
          (6 )                              
Loss on corporate fixed assets, net
          (2 )                              
                                                 
Operating (loss) profit, as reported
    (499 )     55       90                          
Other income (expense), net
    (278 )     (206 )     (283 )                        
                                                 
Loss from continuing operations before income taxes
  $ (777 )   $ (151 )   $ (193 )                        
                                                 
Corporate assets
    1,596       1,571       1,315  
                         
Total assets
  $ 8,140     $ 9,175     $ 9,483  
                         
 
                                                 
          Depreciation and
 
    Property Additions(5)     Amortization(5)  
    2010     2009     2008     2010     2009     2008  
 
The Company’s operations by segment were:
                                               
Cabinets and Related Products
  $ 34     $ 30     $ 50     $ 112     $ 84     $ 70  
Plumbing Products
    65       47       72       63       70       72  
Installation and Other Services
    7       30       45       40       35       23  
Decorative Architectural Products
    9       7       14       18       18       18  
Other Specialty Products
    18       7       10       26       28       33  
                                                 
      133       121       191       259       235       216  
Unallocated amounts, principally related to corporate assets
    4       1       2       20       17       16  
                                                 
Total
  $ 137     $ 122     $ 193     $ 279     $ 252     $ 232  
                                                 
­ ­
 
(1) Included in net sales were export sales from the U.S. of $246 million, $277 million and $275 million in 2010, 2009 and 2008, respectively.
 
(2) Intra-company sales between segments represented approximately two percent of net sales in 2010, three percent of net sales in 2009 and one percent of net sales in 2008.
 
(3) Included in net sales were sales to one customer of $1,993 million, $2,053 million and $2,058 million in 2010, 2009 and 2008, respectively. Such net sales were included in the following segments: Cabinets and Related Products, Plumbing Products, Decorative Architectural Products and Other Specialty Products.
 
(4) Net sales from the Company’s operations in the U.S. were $5,618 million, $5,952 million and $7,150 million in 2010, 2009 and 2008, respectively.
 
(5) Net sales, operating (loss) profit, property additions and depreciation and amortization expense for 2010, 2009 and 2008 excluded the results of businesses reported as discontinued operations in 2010, 2009 and 2008.
 
(6) Included in segment operating (loss) profit for 2010 were impairment charges for goodwill and other intangible assets as follows: Plumbing Products – $1 million; and Installation and Other Services – $720 million. Included in segment operating profit (loss) for 2009 were impairment charges for goodwill as follows: Plumbing Products – $39 million; Other Specialty Products – $223 million. Included in segment operating profit (loss) for 2008 were impairment charges for goodwill and other intangible assets as follows: Cabinets and Related Products – $59 million; Plumbing Products – $203 million; Installation and Other Services – $52 million; and Other Specialty Products – $153 million.
 
(7) General corporate expense, net included those expenses not specifically attributable to the Company’s segments.
 
(8) During 2009, the Company recognized a curtailment loss related to the plan to freeze all future benefit accruals beginning January 1, 2010 under substantially all of the Company’s domestic qualified and non-qualified defined-benefit pension plans. See Note M to the consolidated financial statements.
 
(9) The charge for litigation settlement in 2009 relates to a business unit in the Cabinets and Related Products segment. The charge for litigation settlement in 2008 relates to a business unit in the Installation and Other Services segment.
 
(10) See Note L to the consolidated financial statements.
 
(11) Long-lived assets of the Company’s operations in the U.S. and Europe were $3,684 million and $617 million, $4,628 million and $690 million, and $4,887 million and $770 million at December 31, 2010, 2009 and 2008, respectively.
 
(12) Segment assets for 2009 and 2008 excluded the assets of businesses reported as discontinued operations.
Other Income (Expense), Net
Other Income (Expense), Net
 
P.  OTHER INCOME (EXPENSE), NET
 
Other, net, which is included in other income (expense), net, was as follows, in millions:
 
                         
    2010     2009     2008  
 
Income from cash and cash investments
  $ 6     $ 7     $ 22  
Other interest income
    1       2       2  
Income from financial investments, net (Note E)
    9       3       1  
Other items, net
    (9 )     17       (22 )
                         
Total other, net
  $ 7     $ 29     $ 3  
                         
 
 
Other items, net, included realized foreign currency transaction gains (losses) of $(2) million, $17 million and $(29) million in 2010, 2009 and 2008, respectively, as well as other miscellaneous items.
Income Taxes
Income Taxes
 
Q.  INCOME TAXES
 
                         
          (In Millions)  
    2010     2009     2008  
 
(Loss) income from continuing operations before income taxes:
                       
U.S. 
  $ (964 )   $ (301 )   $ 4  
Foreign
    187       150       (197 )
                         
    $ (777 )   $ (151 )   $ (193 )
                         
Income tax expense (benefit) on (loss) income from continuing operations:
                       
Currently payable:
                       
U.S. Federal
  $ (24 )   $ (29 )   $ 6  
State and local
    22       12       20  
Foreign
    59       45       68  
Deferred:
                       
U.S. Federal
    177       (64 )     47  
State and local
    (9 )     (2 )     4  
Foreign
          (11 )     (11 )
                         
    $ 225     $ (49 )   $ 134  
                         
Deferred tax assets at December 31:
                       
Receivables
  $ 15     $ 19          
Inventories
    35       31          
Other assets, principally stock-based compensation
    119       135          
Accrued liabilities
    143       171          
Long-term liabilities
    227       200          
Net operating loss carryforward
    136       63          
Capital loss carryforward
    3                
Tax credit carryforward
    12       6          
                         
      690       625          
Valuation allowance
    (462 )     (43 )        
                         
      228       582          
                         
Deferred tax liabilities at December 31:
                       
Property and equipment
    223       324          
Investment in foreign subsidiaries
          9          
Intangibles
    323       398          
Other, principally notes payable
    29       32          
                         
      575       763          
                         
Net deferred tax liability at December 31
  $ 347     $ 181          
                         
 
At December 31, 2010 and 2009, the net deferred tax liability consisted of net short-term deferred tax assets included in prepaid expenses and other of $50 million and $203 million, respectively, and net long-term deferred tax liabilities included in deferred income taxes and other of $397 million and $384 million, respectively.
 
The accounting guidance for income taxes requires that the future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income.
 
If, based upon all available evidence, both positive and negative, it is more likely than not (more than 50 percent likely) such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company’s three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable and the accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets.
 
In the fourth quarter of 2010, the Company recorded a $371 million valuation allowance against its U.S. Federal deferred tax assets as a non-cash charge to income tax expense. In reaching this conclusion, the Company considered the weaker retail sales of certain of its building products and the slower than anticipated recovery in the U.S. housing market which led to U.S. operating losses and significant U.S. goodwill impairment charges, that primarily occurred in the fourth quarter of 2010, causing the Company to be in a three-year cumulative U.S. loss position. These factors negatively impacted the Company’s ability to utilize previously identified tax-planning strategies that included the potential sale of certain non-core operating assets to support the realization of its U.S. Federal deferred tax assets, since current year losses are heavily weighted in determining if sufficient income would exist in the carryforward period to realize the benefit of the strategies.
 
Recording the valuation allowance does not restrict the Company’s ability to utilize the future deductions and net operating losses associated with the deferred tax assets assuming taxable income is recognized in future periods.
 
A rebound in the U.S. housing market from the current historic lows and retail sales of building products improving from their current levels should have a positive impact on the Company’s operating results in the U.S. A return to sustained profitability in the U.S. should result in objective positive evidence thereby warranting consideration of our previously identified tax-planning strategies and the potential reversal of all or a portion of the valuation allowance.
 
The $228 million of deferred tax assets at December 31, 2010, for which there is no valuation allowance recorded, is anticipated to be realized through the future reversal of existing taxable temporary differences recorded as deferred tax liabilities at December 31, 2010.
 
The valuation allowance of $43 million as of December 31, 2009 consisted of certain state and foreign net operating loss carryforward and other deferred tax asset balances that the Company believes would not be realized in future periods primarily due to the recent history of losses of certain subsidiaries.
 
Of the deferred tax asset related to the net operating loss and tax credit carryforwards at December 31, 2010 and 2009, $143 million and $65 million will expire between 2019 and 2030 and $5 million and $4 million is unlimited, respectively. The capital loss carryforward of $3 million at December 31, 2010 will expire in 2015.
 
A $9 million deferred tax liability has been provided at December 31, 2009 on the undistributed earnings of certain foreign subsidiaries as such earnings are intended to be repatriated in the foreseeable future. A tax provision has not been provided at December 31, 2010 for U.S. income taxes or additional foreign withholding taxes on approximately $60 million of undistributed earnings of certain foreign subsidiaries that are considered to be permanently reinvested. It is not practicable to determine the amount of deferred tax liability on such earnings as the actual U.S. tax would depend on income tax laws and circumstances at the time of distribution.
 
A reconciliation of the U.S. Federal statutory tax rate to the income tax expense (benefit) on (loss) income from continuing operations was as follows:
 
                         
    2010     2009     2008  
 
U.S. federal statutory tax rate – (benefit)
    (35 )%     (35 )%     (35 )%
State and local taxes, net of U.S. Federal tax benefit
    1       4       8  
Lower taxes on foreign earnings
    (1 )     (11 )     (11 )
Foreign uncertain tax positions
          (5 )      
Change in U.S. and foreign taxes on distributed and undistributed foreign earnings, including the impact of foreign tax credit
          5       35  
Goodwill impairment charges providing no tax benefit
    17       10       73  
U.S. Federal valuation allowance
    48              
Other, net
    (1 )     (1 )     (1 )
                         
Effective tax rate – expense (benefit)
    29 %     (33 )%     69 %
                         
 
During 2010, the Company recorded pre-tax impairment charges for goodwill and other intangible assets of $721 million ($593 million after-tax) that increased the effective tax rate as a portion of the impairment charges did not provide a tax benefit. In addition, the Company recorded a $371 million income tax expense related to a valuation allowance on its U.S. Federal deferred tax assets. Excluding the effects of these items, the Company’s effective tax rate in 2010 was approximately a 32% tax benefit on its 2010 pre-tax loss.
 
During 2009, the Company reversed an accrual for uncertain tax positions of approximately $8 million related to a withholding tax issue from a formerly held European company due to a favorable court decision which resulted in a decrease in the effective tax rate. In addition, the Company recorded pre-tax impairment charges for goodwill of $262 million ($180 million after-tax) in 2009 that increased the effective tax rate as a portion of the impairment charges did not provide a tax benefit. Excluding the effects of these items, the Company’s effective tax rate in 2009 was approximately 37 percent.
 
During 2008, the Company made a substantial repatriation of low-taxed earnings from certain foreign subsidiaries to fully utilize the existing foreign tax credit carryforward by December 31, 2008. Although the majority of the current U.S. tax on this substantial repatriation was offset by the foreign tax credit carryforward, the Company’s tax expense was increased by approximately $65 million. Also during 2008, the Company recorded pre-tax impairment charges for goodwill and other intangibles of $467 million ($445 million after-tax) that significantly increased the Company’s effective tax rate as the majority of the impairment charges did not provide a tax benefit. Excluding the effects of the substantial repatriation of low-taxed earnings and the impairment charges, the Company’s effective tax rate in 2008 was approximately 33 percent.
 
Income taxes paid were $47 million, $25 million and $117 million in 2010, 2009 and 2008, respectively.
 
A reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties, is as follows:
 
                         
          (In Millions)  
    Uncertain
    Interest and
       
    Tax Positions     Penalties     Total  
 
Balance at January 1, 2009
  $ 81     $ 25     $ 106  
Current year tax positions:
                       
Additions
    5               5  
Reductions
    (1 )             (1 )
Prior year tax positions:
                       
Additions
    7               7  
Reductions
    (8 )             (8 )
Settlements with tax authorities
    (13 )     (3 )     (16 )
Lapse of applicable statute of limitations
    (6 )             (6 )
Interest and penalties recognized in income tax expense
            (1 )     (1 )
                         
Balance at December 31, 2009
  $ 65     $ 21     $ 86  
                         
Current year tax positions:
                       
Additions
    6               6  
Prior year tax positions:
                       
Additions
    18               18  
Reductions
    (5 )             (5 )
Settlements with tax authorities
    (3 )     (1 )     (4 )
Lapse of applicable statute of limitations
    (10 )             (10 )
Interest and penalties recognized in income tax expense
            3       3  
                         
Balance at December 31, 2010
  $ 71     $ 23     $ 94  
                         
 
If recognized, $47 million and $44 million of the liability for uncertain tax positions at December 31, 2010 and 2009, respectively, net of any U.S. Federal tax benefit, would impact the Company’s effective tax rate.
 
At December 31, 2010 and 2009, $97 and $87 million of the total liability for uncertain tax positions, including related interest and penalties, is recorded in deferred income taxes and other, $5 and $8 million is recorded in accrued liabilities and $8 and $9 million is recorded in other assets, respectively.
 
The Company files income tax returns in the U.S. Federal jurisdiction, and various local, state and foreign jurisdictions. The Company continues to participate in the Compliance Assurance Program (“CAP”). CAP is a real-time audit of the U.S. Federal income tax return that allows the Internal Revenue Service (“IRS”), working in conjunction with the Company, to determine tax return compliance with the U.S. Federal tax law prior to filing the return. This program provides the Company with greater certainty about its tax liability for a given year within months, rather than years, of filing its annual tax return and greatly reduces the need for recording a liability for U.S. Federal uncertain tax positions. The IRS has completed their examination of the Company’s consolidated U.S. Federal tax returns through 2009. With few exceptions, the Company is no longer subject to state or foreign income tax examinations on filed returns for years before 2000.
 
As a result of tax audit closings, settlements and the expiration of applicable statutes of limitations in various jurisdictions within the next 12 months, the Company anticipates that it is reasonably possible the liability for uncertain tax positions could be reduced by approximately $7 million.
Earning Per Common Share
Earnings Per Common Share
R.  EARNINGS PER COMMON SHARE
 
Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions:
 
                         
    2010     2009     2008  
 
Numerator (basic and diluted):
                       
Loss from continuing operations
  $ (1,043 )   $ (140 )   $ (366 )
Allocation to unvested restricted stock awards
    (3 )     (3 )     (7 )
                         
Loss from continuing operations attributable to common shareholders
    (1,046 )     (143 )     (373 )
Loss from discontinued operations, net
          (43 )     (25 )
                         
Net loss available to common shareholders
  $ (1,046 )   $ (186 )   $ (398 )
                         
Denominator:
                       
Basic common shares (based on weighted average)
    349       351       353  
Add:
                       
Contingent common shares
                 
Stock option dilution
                 
                         
Diluted common shares
    349       351       353  
                         
 
Effective January 1, 2009, the Company adopted accounting guidance regarding determining whether instruments granted in share-based payment transactions are participating securities. This new accounting guidance clarifies that share-based payment awards that entitle their holders to receive non-forfeitable dividends prior to vesting should be considered participating securities. The Company has granted restricted stock awards that contain non-forfeitable rights to dividends on unvested shares; such unvested restricted stock awards are considered participating securities. As participating securities, the unvested shares are required to be included in the calculation of the Company’s basic earnings per common share, using the “two-class method.” The two-class method of computing earnings per common share is an allocation method that calculates earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Unvested restricted stock awards were previously included in the Company’s diluted share calculation using the treasury stock method. For the years ended December 31, 2010, 2009 and 2008, the Company allocated dividends to the unvested restricted stock awards (participating securities).
 
At December 31, 2010, 2009 and 2008, the Company did not include any common shares related to the Zero Coupon Convertible Senior Notes (“Notes”) in the calculation of diluted earnings per common share, as the price of the Company’s common stock at December 31, 2010, 2009 and 2008 did not exceed the equivalent accreted value of the Notes.
 
Additionally, 37 million common shares, 36 million common shares and 31 million common shares for 2010, 2009 and 2008, respectively, related to stock options were excluded from the computation of diluted earnings per common share due to their antidilutive effect.
 
Common shares outstanding included on the Company’s balance sheet and for the calculation of earnings per common share do not include unvested stock awards (10 million and nine million common shares at December 31, 2010 and 2009, respectively); shares outstanding for legal requirements included all common shares that have voting rights (including unvested stock awards).
Other Commitments and Contingencies
Other Commitments and Contingencies
S.  OTHER COMMITMENTS AND CONTINGENCIES
 
Litigation
 
The Company is subject to lawsuits and pending or asserted claims with respect to matters generally arising in the ordinary course of business.
 
Early in 2003, a suit was brought against the Company and a number of its insulation installation companies in the federal court in Atlanta, Georgia, alleging that certain practices violate provisions of federal and state antitrust laws. The plaintiff publicized the lawsuit with a press release and stated in that release that the U.S. Department of Justice was investigating the business practices of the Company’s insulation installation companies. Although the Company was unaware of any investigation at that time, the Company was later advised that an investigation had been commenced but was subsequently closed without any enforcement action recommended. Two additional lawsuits were subsequently brought in Virginia making similar claims under the antitrust laws. Both of these lawsuits have since been dismissed without any payment or requirement for any change in business practices.
 
During the second half of 2004, the same counsel who commenced the initial action in Atlanta filed six additional lawsuits on behalf of several of Masco’s competitors in the insulation installation business. The plaintiffs then dismissed all of these lawsuits and, represented by the same counsel, filed another action in the same federal court as a putative class action against the Company, a number of its insulation installation companies and certain of their suppliers. All of the Company’s suppliers, who were co-defendants in this lawsuit, have settled this case. On February 9, 2009, the federal court in Atlanta issued an Opinion in which the Court certified a class of 377 insulation contractors. In its Opinion, the Court also ruled on various other motions. Two additional lawsuits, seeking class action status and alleging anticompetitive conduct, were filed against the Company and a number of its insulation suppliers. One of these lawsuits was filed in a Florida state court and has been dismissed by the court with prejudice. The other lawsuit was filed in federal court in northern California and was subsequently transferred to federal court in Atlanta, Georgia. This case has been administratively stayed by the court. The Company is vigorously defending the pending active case. Based upon the advice of its outside counsel, the Company believes that the conduct of the Company and its insulation installation companies, which has been the subject of the above-described lawsuits, has not violated any antitrust laws. The Company is unable at this time to reliably estimate any potential liability which might occur from an adverse judgment. There cannot be any assurance that the Company will ultimately prevail in the remaining lawsuits or, if unsuccessful, that the ultimate liability would not be material and would not have a material adverse effect on its businesses or the methods used by its insulation installation companies in doing business.
 
Warranty
 
Certain of the Company’s products and product finishes and services are covered by a warranty to be free from defects in material and workmanship for periods ranging from one year to the life of the product. At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of warranty obligations. The Company’s estimate of costs to service its warranty obligations is based upon historical experience and expectations of future conditions. To the extent that the Company experiences any changes in warranty claim activity or costs associated with servicing those claims, its warranty liability is adjusted accordingly.
 
Changes in the Company’s warranty liability were as follows, in millions:
 
                 
    2010     2009  
 
Balance at January 1
  $ 109     $ 119  
Accruals for warranties issued during the year
    42       32  
Accruals related to pre-existing warranties
    (4 )     5  
Settlements made (in cash or kind) during the year
    (37 )     (44 )
Other, net (including currency translation)
    (3 )     (3 )
                 
Balance at December 31
  $ 107     $ 109  
                 
 
Investments
 
With respect to the Company’s investments in private equity funds, the Company had, at December 31, 2010, commitments to contribute up to $33 million of additional capital to such funds representing the Company’s aggregate capital commitment to such funds less capital contributions made to date. The Company is contractually obligated to make additional capital contributions to certain of its private equity funds upon receipt of a capital call from the private equity fund. The Company has no control over when or if the capital calls will occur. Capital calls are funded in cash and generally result in an increase in the carrying value of the Company’s investment in the private equity fund when paid.
 
Other Matters
 
The Company enters into contracts, which include reasonable and customary indemnifications that are standard for the industries in which it operates. Such indemnifications include customer claims against builders for issues relating to the Company’s products and workmanship. In conjunction with divestitures and other transactions, the Company occasionally provides reasonable and customary indemnifications relating to various items including: the enforceability of trademarks; legal and environmental issues; provisions for sales returns; and asset valuations. The Company has never had to pay a material amount related to these indemnifications and evaluates the probability that amounts may be incurred and appropriately records an estimated liability when probable.
Interim Financial Information (Unaudited)
Interim Financial Information (UNAUDITED)
T.  INTERIM FINANCIAL INFORMATION (UNAUDITED)
 
                                         
        (In Millions, Except Per Common Share Data)
    Total
  Quarters Ended
    Year   December 31   September 30   June 30   March 31
 
2010
                                       
Net sales
  $ 7,592     $ 1,735     $ 1,957     $ 2,048     $ 1,852  
Gross profit
  $ 1,840     $ 308     $ 494     $ 546     $ 492  
(Loss) income from continuing operations
  $ (1,043 )   $ (1,034 )   $ (5 )   $ 3     $ (7 )
Net (loss) income
  $ (1,043 )   $ (1,034 )   $ (5 )   $ 3     $ (7 )
(Loss) earnings per common share:
                                       
Basic:
                                       
(Loss) income from continuing operations
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
Net (loss) income
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
Diluted:
                                       
(Loss) income from continuing operations
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
Net (loss) income
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
2009
                                       
Net sales
  $ 7,792     $ 1,898     $ 2,084     $ 2,013     $ 1,797  
Gross profit
  $ 2,018     $ 495     $ 567     $ 543     $ 413  
(Loss) income from continuing operations
  $ (140 )   $ (173 )   $ 51     $ 67     $ (85 )
Net income (loss)
  $ (183 )   $ (185 )   $ 28     $ 55     $ (81 )
(Loss) earnings per common share:
                                       
Basic:
                                       
(Loss) income from continuing operations
  $ (.41 )   $ (.49 )   $ .14     $ .19     $ (.24 )
Net (loss) income
  $ (.53 )   $ (.53 )   $ .08     $ .15     $ (.23 )
Diluted:
                                       
(Loss) income from continuing operations
  $ (.41 )   $ (.49 )   $ .14     $ .19     $ (.24 )
Net (loss) income
  $ (.53 )   $ (.53 )   $ .08     $ .15     $ (.23 )
 
(Loss) earnings per common share amounts for the four quarters of 2010 and 2009 may not total to the earnings per common share amounts for the years ended December 31, 2010 and 2009 due to the allocation of income to unvested stock awards.
 
The first, second and third quarters of 2009 have been recast to reflect the Company’s sale of a business unit (discontinued operation) in the fourth quarter of 2009.
 
Fourth quarter 2010 loss from continuing operations and net loss include non-cash impairment charges for goodwill and other intangible assets of $593 million after tax ($721 million pre-tax). Fourth quarter 2010 loss from continuing operations and net loss include a valuation allowance on net U.S. deferred tax assets of $371 million. Income (loss) from continuing operations and net (loss) income include after-tax impairment charges for financial investments of $21 million ($33 million pre-tax) and $– million ($1 million pre-tax) in the second and fourth quarters of 2010, respectively.
 
Fourth quarter 2009 loss from continuing operations and net loss include non-cash impairment charges for goodwill of $180 million after tax ($262 million pre-tax). Income (loss) from continuing operations and net (loss) income include after-tax impairment charges for financial investments of $2 million ($3 million pre-tax) and $5 million ($7 million pre-tax) in the first and second quarters of 2009, respectively. Net (loss) income for 2009 includes after-tax income (loss), net, related to discontinued operations of $4 million ($(4) million pre-tax), $(12) million ($(4) million pre-tax), $(23) million ($(24) million pre-tax) and $(12) million ($(18) million pre-tax) in the first, second, third and fourth quarters of 2009, respectively.
Valuation and Qualifying Accounts
Valuation and Qualifying Accounts
VALUATION AND QUALIFYING ACCOUNTS

MASCO CORPORATION
 
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
 
for the years ended December 31, 2010, 2009 and 2008
 
                                         
    (In Millions)  
Column A   Column B     Column C     Column D     Column E  
          Additions              
    Balance at
    Charged to
    Charged
          Balance at
 
    Beginning
    Costs and
    to Other
          End of
 
Description   of Period     Expenses     Accounts     Deductions     Period  
 
Allowance for doubtful accounts, deducted from accounts receivable in the balance sheet:
                                       
2010
  $ 75     $ 16     $  (a)   $ (26 ) (b)   $ 65  
                                         
2009
  $ 75     $ 30     $ (1 ) (a)   $ (29 ) (b)   $ 75  
                                         
2008
  $ 85     $ 37     $ (2 ) (a)   $ (45 ) (b)   $ 75  
                                         
Valuation allowance on deferred tax assets:
                                       
2010
  $ 43     $ 400     $ 19  (c)   $     $ 462  
                                         
2009
  $ 15     $ 28     $     $     $ 43  
                                         
2008
  $ 9     $ 6     $     $     $ 15  
                                         
 
 
(a) Allowance of companies acquired and companies disposed of, net.
 
(b) Deductions, representing uncollectible accounts written off, less recoveries of accounts written off in prior years.
 
(c) Valuation allowance on deferred tax assets recorded in other comprehensive income.
Accounting Policies (Policies)
 
Principles of Consolidation.  The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. The Company consolidates the assets, liabilities and results of operations of variable interest entities, for which the Company is the primary beneficiary.
 
Use of Estimates and Assumptions in the Preparation of Financial Statements.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions.
 
Revenue Recognition.  The Company recognizes revenue as title to products and risk of loss is transferred to customers or when services are rendered, net of applicable provisions for discounts, returns and allowances. The Company records revenue for unbilled services performed based upon estimates of labor incurred in the Installation and Other Services segment; such amounts are recorded in Receivables. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales.
 
Customer Promotion Costs.  The Company records estimated reductions to revenue for customer programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. In-store displays that are owned by the Company and used to market the Company’s products are included in other assets in the consolidated balance sheets and are amortized using the straight-line method over the expected useful life of three years; related amortization expense is classified as a selling expense in the consolidated statements of income.
 
Foreign Currency.  The financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. The resulting cumulative translation adjustments have been recorded in the accumulated other comprehensive income component of shareholders’ equity. Realized foreign currency transaction gains and losses are included in the consolidated statements of income in other income (expense), net.
 
Cash and Cash Investments.  The Company considers all highly liquid investments with an initial maturity of three months or less to be cash and cash investments.
 
Receivables.  The Company does significant business with a number of customers, including certain home centers and homebuilders. The Company monitors its exposure for credit losses on its customer receivable balances and the credit worthiness of its customers on an on-going basis and records related allowances for doubtful accounts. Allowances are estimated based upon specific customer balances, where a risk of default has been identified, and also include a provision for non-customer specific defaults based upon historical collection, return and write-off activity. During downturns in the Company’s markets, declines in the financial condition and creditworthiness of customers impacts the credit risk of the receivables involved and the Company has incurred additional bad debt expense related to customer defaults. A separate allowance is recorded for customer incentive rebates and is generally based upon sales activity. Receivables are presented net of certain allowances (including allowances for doubtful accounts) of $65 million and $75 million at December 31, 2010 and 2009, respectively. Receivables include unbilled revenue related to the Installation and Other Services segment of $12 million and $15 million at December 31, 2010 and 2009, respectively.
 
 
Property and Equipment.  Property and equipment, including significant betterments to existing facilities, are recorded at cost. Upon retirement or disposal, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of income. Maintenance and repair costs are charged against earnings as incurred.
 
The Company reviews its property and equipment as an event occurs or circumstances change that would more likely than not reduce the fair value of the property and equipment below the carrying amount. If the carrying amount of property and equipment is not recoverable from its undiscounted cash flows, then the Company would recognize an impairment loss for the difference between the carrying amount and the current fair value. Further, the Company evaluates the remaining useful lives of property and equipment at each reporting period to determine whether events and circumstances warrant a revision to the remaining depreciation periods.
 
Depreciation.  Depreciation expense is computed principally using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows: buildings and land improvements, 2 to 10 percent, and machinery and equipment, 5 to 33 percent. Depreciation expense was $261 million, $237 million and $220 million in 2010, 2009 and 2008, respectively.
 
Goodwill and Other Intangible Assets.  The Company performs its annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has defined its reporting units and completed the impairment testing of goodwill at the operating segment level, as defined by accounting guidance. The Company’s operating segments are reporting units that engage in business activities, for which discrete financial information, including five-year forecasts, are available. The Company compares the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing. Fair value is determined using a discounted cash flow method, which includes significant unobservable inputs (Level 3 inputs).
 
Determining market values using a discounted cash flow method requires the Company to make significant estimates and assumptions, including long-term projections of cash flows, market conditions and appropriate discount rates. The Company’s judgments are based upon historical experience, current market trends, consultations with external valuation specialists and other information. In estimating future cash flows, the Company relies on internally generated five-year forecasts for sales and operating profits, including capital expenditures, and generally a one to three percent long-term assumed annual growth rate of cash flows for periods after the five-year forecast. The Company generally utilizes its weighted average cost of capital (discount rate) of approximately eight percent to discount the estimated cash flows. However, in 2010 and 2009, due to market conditions, the Company increased the discount rate to a range of nine percent to eleven percent for most of its reporting units, based upon a review of the current risks impacting our businesses. The Company records an impairment to goodwill (adjusting the value to the estimated fair value) if the book value is below the estimated fair value, on a non-recurring basis.
 
The Company reviews its other indefinite-lived intangible assets for impairment annually in the fourth quarter of each year, or as events occur or circumstances change that indicate the assets may be impaired without regard to the reporting unit. The Company considers the implications of both external (e.g., market growth, competition and local economic conditions) and internal (e.g., product sales and expected product growth) factors and their potential impact on cash flows related to the intangible asset in both the near- and long-term.
 
Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. The Company evaluates the remaining useful lives of amortizable identifiable intangible assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining periods of amortization. See Note H for additional information regarding Goodwill and Other Intangible Assets.
 
Fair Value Accounting.  On January 1, 2008, the Company adopted accounting guidance for its financial investments and liabilities which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. On January 1, 2009, the Company adopted this guidance for its non-financial investments and liabilities; such adoption did not have a significant effect on its consolidated financial statements.
 
The fair value of financial investments and liabilities is determined at each balance sheet date and future declines in market conditions, the future performance of the underlying investments or new information could affect the recorded values of the Company’s investments in marketable securities, private equity funds and other private investments.
 
The Company uses derivative financial instruments to manage certain exposure to fluctuations in earnings and cash flows resulting from changes in foreign currency exchange rates and commodity costs. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at fair value. For each derivative financial instrument that is designated and qualifies as a fair-value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in determining current earnings during the period of the change in fair values. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in determining current earnings during the period of the change in fair value.
 
Warranty.  At the time of sale, the Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of warranty obligations. The Company’s estimate of costs to service its warranty obligations is based upon historical experience and expectations of future conditions.
 
A majority of the Company’s business is at the consumer retail level through home centers and major retailers. A consumer may return a product to a retail outlet that is a warranty return. However, certain retail outlets do not distinguish between warranty and other types of returns when they claim a return deduction from the Company. The Company’s revenue recognition policy takes into account this type of return when recognizing revenue, and deductions are recorded at the time of sale.
 
Product Liability.  The Company provides for expenses associated with product liability obligations when such amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change that would affect the estimated liability.
 
Stock-Based Compensation.  The Company measures compensation expense for stock awards at the market price of the Company’s common stock at the grant date. Effective January 1, 2006, such expense is being recognized ratably over the shorter of the vesting period of the stock awards, typically 5 to 10 years (except for stock awards held by grantees age 66 or older, which vest over five years), or the length of time until the grantee becomes retirement-eligible at age 65. For stock awards granted prior to January 1, 2006, such expense is being recognized over the vesting period of the stock awards, typically 10 years, or for executive grantees that are, or will become, retirement-eligible during the vesting period, the expense is being recognized over five years or immediately upon a grantee’s retirement.
 
The Company measures compensation expense for stock options using a Black-Scholes option pricing model. For stock options granted subsequent to January 1, 2006, such expense is being recognized ratably over the shorter of the vesting period of the stock options, typically five years, or the length of time until the grantee becomes retirement-eligible at age 65. The expense for unvested stock options at January 1, 2006 is based upon the grant date fair value of those options as calculated using a Black-Scholes option pricing model. For stock options granted prior to January 1, 2006, such expense is being recognized ratably over the vesting period of the stock options, typically five years. The Company utilizes the shortcut method to determine the tax windfall pool associated with stock options.
 
Noncontrolling Interest.  The Company owns 68 percent of Hansgrohe AG at both December 31, 2010 and 2009. The aggregate noncontrolling interest, net of dividends, at December 31, 2010 and 2009 has been recorded as a component of equity on the Company’s consolidated balance sheets.
 
Interest and Penalties on Uncertain Tax Positions.  The Company records interest and penalties on its uncertain tax positions in income tax expense.
 
Reclassifications.  Certain prior-year amounts have been reclassified to conform to the 2010 presentation in the consolidated financial statements. In the Company’s consolidated statements of cash flows, the cash flows from discontinued operations are not separately classified.
 
Recently Issued Accounting Pronouncements.  Effective January 1, 2010, the Company adopted new FASB guidance regarding how a company determines when an entity is insufficiently capitalized or is not controlled through voting and should be consolidated. The adoption of this guidance did not have any impact on the Company’s consolidated financial condition and results of operations.
Discontinued Operations (Tables)
Financial information for discontinued operations
 
                 
    2009     2008  
 
Net sales
  $ 66     $ 216  
                 
(Loss) from discontinued operations
  $ (10 )   $ (5 )
Impairment of assets held for sale
          (45 )
(Loss) gain on disposal of discontinued operations, net
    (40 )     3  
                 
(Loss) before income tax
    (50 )     (47 )
Income tax benefit
    7       22  
                 
(Loss) from discontinued operations, net
  $ (43 )   $ (25 )
                 
Inventories (Tables)
Inventories
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Finished goods
  $ 393     $ 405  
Raw material
    246       247  
Work in process
    93       91  
                 
Total
  $ 732     $ 743  
                 
Fair Value of Financial Investments and Liabilities (Tables)
 
                 
    At December 31  
    2010     2009  
 
TriMas Corporation common stock
  $ 40     $ 17  
Auction rate securities
    22       22  
Asahi Tec Corporation — common and preferred stock
          71  
                 
Total recurring investments
    62       110  
                 
Private equity funds
    106       123  
Other investments
    13       9  
                 
Total non-recurring investments
    119       132  
Total
  $ 181     $ 242  
                 
 
                                 
          Pre-tax        
          Unrealized
    Unrealized
    Recorded
 
    Cost Basis     Gains     Losses     Basis  
 
December 31, 2010
  $ 22     $ 40     $     $ 62  
December 31, 2009
  $ 71     $ 39     $     $ 110  
 
                                 
          Fair Value Measurements Using  
                Significant
       
          Quoted
    Other
    Significant
 
          Market
    Observable
    Unobservable
 
    Dec. 31,
    Prices
    Inputs
    Inputs
 
    2010     (Level 1)     (Level 2)     (Level 3)  
 
TriMas Corporation
  $ 40     $ 40     $     $  
Auction rate securities
    22                   22  
                                 
Total
  $ 62     $ 40     $     $ 22  
                                 
 
                                 
          Fair Value Measurements Using  
                Significant
       
          Quoted
    Other
    Significant
 
          Market
    Observable
    Unobservable
 
    Dec. 31,
    Prices
    Inputs
    Inputs
 
    2009     (Level 1)     (Level 2)     (Level 3)  
 
Asahi Tec Corporation:
                               
Preferred stock
  $ 71     $     $     $ 71  
Auction rate securities
    22                   22  
TriMas Corporation
    17       17              
                                 
Total
  $ 110     $ 17     $     $ 93  
                                 
 
                         
    Asahi Tec
    Auction Rate
       
    Preferred Stock     Securities     Total  
 
Fair value January 1, 2010
  $ 71     $ 22     $ 93  
Total losses included in earnings
    (28 )           (28 )
Unrealized losses
    (23 )           (23 )
Purchases, issuances, settlements
                 
Transfers from Level 3 to Level 2
    (20 )           (20 )
                         
Fair value at December 31, 2010
  $     $ 22     $ 22  
                         
 
                         
    Asahi Tec
    Auction Rate
       
    Preferred Stock     Securities     Total  
 
Fair value January 1, 2009
  $ 72     $ 22     $ 94  
Total losses included in earnings
                 
Unrealized losses
    (1 )           (1 )
Purchases, issuances, settlements
                 
                         
Fair value at December 31, 2009
  $ 71     $ 22     $ 93  
                         
 
                                         
          Fair Value Measurements Using  
                Significant
             
          Quoted
    Other
    Significant
       
          Market
    Observable
    Unobservable
    Total
 
    Dec. 31,
    Prices
    Inputs
    Inputs
    Gains
 
    2010     (Level 1)     (Level 2)     (Level 3)     (Losses)  
 
Private equity funds
  $ 2     $     $     $ 2     $ (4 )
Other private investments
                            (2 )
                                         
    $ 2     $     $     $ 2     $ (6 )
                                         
 
                                         
          Fair Value Measurements Using  
                Significant
             
          Quoted
    Other
    Significant
       
          Market
    Observable
    Unobservable
    Total
 
    Dec. 31,
    Prices
    Inputs
    Inputs
    Gains
 
    2009     (Level 1)     (Level 2)     (Level 3)     (Losses)  
 
Private equity funds
  $ 31     $     $     $ 31     $ (10 )
Other private investments
    3                   3        
                                         
    $ 34     $     $     $ 34     $ (10 )
                                         
 
                         
          Unrealized Loss  
    Fair Value     Less than 12 Months     Over 12 Months  
 
December 31, 2010
  $     $     $  
                         
December 31, 2009
  $     $     $  
                         
 
                         
    2010     2009     2008  
 
Realized gains from marketable securities
  $ 10     $     $  
Realized losses from marketable securities
    (8 )           (3 )
Dividend income from marketable securities
                 
Income from other investments, net
    7       3       4  
Dividend income from other investments
                 
                         
Income from financial investments, net
  $ 9     $ 3     $ 1  
                         
Impairment charges:
                       
Asahi Tec
  $ (28 )   $     $  
Private equity funds
    (4 )     (10 )     (23 )
Other private investments
    (2 )           (3 )
TriMas Corporation
                (31 )
Marketable securities
                (1 )
                         
Total impairment charges
  $ (34 )   $ (10 )   $ (58 )
                         
Property and Equipment (Tables)
Property and Equipment
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Land and improvements
  $ 190     $ 195  
Buildings
    1,030       1,044  
Machinery and equipment
    2,419       2,420  
                 
      3,639       3,659  
Less: Accumulated depreciation
    1,902       1,678  
                 
Total
  $ 1,737     $ 1,981  
                 
Goodwill and Other Intangible Assets (Tables)
Changes in carrying amount of goodwill
 
                         
    Gross Goodwill
    Accumulated
    Net Goodwill
 
    At December 31,
    Impairment
    At December 31,
 
    2010     Losses     2010  
 
Cabinets and Related Products
  $ 587     $ (364 )   $ 223  
Plumbing Products
    536       (340 )     196  
Installation and Other Services
    1,819       (762 )     1,057  
Decorative Architectural Products
    294             294  
Other Specialty Products
    980       (367 )     613  
                         
Total
  $ 4,216     $ (1,833 )   $ 2,383  
                         
 
                                                                         
    Gross Goodwill
    Accumulated
    Net Goodwill
                Pre-tax
          Net Goodwill
       
    At December 31,
    Impairment
    At December 31,
          Discontinued
    Impairment
          At December 31,
       
    2009     Losses     2009     Additions(A)     Operations     Charge     Other(B)     2010        
 
Cabinets and Related Products
  $ 590     $ (364 )   $ 226     $     $     $     $ (3 )   $ 223          
Plumbing Products
    547       (340 )     207                         (11 )     196          
Installation and Other Services
    1,819       (51 )     1,768                   (711 )           1,057          
Decorative Architectural Products
    294             294                               294          
Other Specialty Products
    980       (367 )     613                               613          
                                                                         
Total
  $ 4,230     $ (1,122 )   $ 3,108     $     $     $ (711 )   $ (14 )   $ 2,383          
                                                                         
 
                                                                         
    Gross Goodwill
    Accumulated
    Net Goodwill
                Pre-tax
          Net Goodwill
       
    At December 31,
    Impairment
    At December 31,
          Discontinued
    Impairment
          At December 31,
       
    2008     Losses     2008     Additions(A)     Operations     Charge     Other(B)     2009        
 
Cabinets and Related Products
  $ 589     $ (364 )   $ 225     $     $     $     $ 1     $ 226          
Plumbing Products
    549       (301 )     248       4       (13 )     (39 )     7       207          
Installation and Other Services
    1,819       (51 )     1,768                               1,768          
Decorative Architectural Products
    294             294                               294          
Other Specialty Products
    980       (144 )     836                   (223 )           613          
                                                                         
Total
  $ 4,231     $ (860 )   $ 3,371     $ 4     $ (13 )   $ (262 )   $ 8     $ 3,108          
                                                                         
 
 
(A) Additions include acquisitions.
 
(B) Other principally includes the effect of foreign currency translation and purchase price adjustments related to prior-year acquisitions.
Other Assets (Tables)
Schedule of other assets
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Financial investments (Note E)
  $ 181     $ 242  
In-store displays, net
    43       44  
Debenture expense
    34       25  
Notes receivable
    2       3  
Other
    27       31  
                 
Total
  $ 287     $ 345  
                 
Accrued Liabilities (Tables)
Schedule of Accrued Liabilities
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Salaries, wages and commissions
  $ 177     $ 193  
Insurance
    176       193  
Warranty (Note S)
    107       109  
Advertising and sales promotion
    90       80  
Interest
    78       68  
Employee retirement plans
    43       36  
Property, payroll and other taxes
    32       35  
Dividends payable
    27       27  
Litigation
    5       9  
Plant closures
    4       3  
Other
    80       86  
                 
Total
  $ 819     $ 839  
                 
Debt (Tables)
Schedule of long-term debt
 
                 
(In Millions)  
    At December 31  
    2010     2009  
 
Notes and debentures:
               
5.875%, due July 15, 2012
  $ 791     $ 850  
7.125%, due Aug. 15, 2013
    200       200  
4.8%, due June 15, 2015
    500       500  
6.125%, due Oct. 3, 2016
    1,000       1,000  
5.85%, due Mar. 15, 2017
    300       300  
6.625%, due Apr. 15, 2018
    114       114  
7.125%, due Mar. 15, 2020
    500        
7.75%, due Aug. 1, 2029
    296       296  
6.5%, due Aug. 15, 2032
    300       300  
Zero Coupon Convertible Senior Notes due 2031 (accreted value)
    57       55  
Floating-Rate Notes, due Mar. 12, 2010
          300  
Other
    40       53  
                 
      4,098       3,968  
Less: Current portion
    66       364  
                 
Total Long-term debt
  $ 4,032     $ 3,604  
                 
Stock-Based Compensation (Tables)
 
                         
    2010     2009     2008  
 
Long-term stock awards
  $ 37     $ 37     $ 43  
Stock options
    22       25       36  
Phantom stock awards and stock appreciation rights
    3       7       (5 )
                         
Total
  $ 62     $ 69     $ 74  
                         
Income tax benefit
  $ 23     $ 26     $ 27  
                         
 
                         
    2010   2009   2008
 
Unvested stock award shares at January 1
    9       8       9  
Weighted average grant date fair value
  $ 21     $ 26     $ 28  
Stock award shares granted
    3       2       2  
Weighted average grant date fair value
  $ 14     $ 8     $ 21  
Stock award shares vested
    2       1       2  
Weighted average grant date fair value
  $ 23     $ 26     $ 26  
Stock award shares forfeited
                1  
Weighted average grant date fair value
  $ 20     $ 24     $ 28  
Unvested stock award shares at December 31
    10       9       8  
Weighted average grant date fair value
  $ 19     $ 21     $ 26  
 
                         
    2010   2009   2008
 
Option shares outstanding, January 1
    36       31       26  
Weighted average exercise price
  $ 23     $ 25     $ 27  
Option shares granted, including restoration options
    5       6       6  
Weighted average exercise price
  $ 14     $ 8     $ 19  
Option shares exercised
                 
Aggregate intrinsic value on date of exercise (A)
  $ 1 million     $ – million     $ – million  
Weighted average exercise price
  $ 8     $     $ 20  
Option shares forfeited
    4       1       1  
Weighted average exercise price
  $ 23     $ 22     $ 27  
Option shares outstanding, December 31
    37       36       31  
Weighted average exercise price
  $ 21     $ 23     $ 25  
Weighted average remaining option term (in years)
    6       6       6  
Option shares vested and expected to vest, December 31
    37       36       31  
Weighted average exercise price
  $ 22     $ 23     $ 25  
Aggregate intrinsic value (A)
  $ 23 million     $ 31 million     $ – million  
Weighted average remaining option term (in years)
    6       6       6  
Option shares exercisable (vested), December 31
    22       21       17  
Weighted average exercise price
  $ 25     $ 26     $ 26  
Aggregate intrinsic value (A)
  $ 4 million     $ – million     $ –million  
Weighted average remaining option term (in years)
    4       4       5  
 
                         
    2010   2009   2008
 
Weighted average grant date fair value
  $ 5.30     $ 2.28     $ 3.72  
Risk-free interest rate
    2.76 %     2.60 %     3.25 %
Dividend yield
    2.17 %     3.70 %     4.96 %
Volatility factor
    46.03 %     39.18 %     32.00 %
Expected option life
    6 years       6 years       6 years  
 
                                         
Option Shares Outstanding   Option Shares Exercisable
        Weighted
           
        Average
  Weighted
      Weighted
        Remaining
  Average
      Average
Range of
  Number of
  Option
  Exercise
  Number of
  Exercise
Prices   Shares   Term   Price   Shares   Price
 
$ 8-23       21     7 Years   $ 15       8     $ 19  
$ 24-28       6     4 Years   $ 27       5     $ 27  
$ 29-32       10     5 Years   $ 30       9     $ 30  
$ 33-38           4 Years   $ 34           $ 34  
                                         
$ 8-38       37     6 Years   $ 21       22     $ 25  
                                         
 
                                 
    Phantom Stock
  Stock Appreciation
    Awards
  Rights
    At December 31,   At December 31,
    2010   2009   2010   2009
 
Accrued compensation cost liability
  $ 6     $ 5     $ 5     $ 4  
Unrecognized compensation cost
  $ 5     $ 5     $ 2     $ 3  
Equivalent common shares
    1       1       2       2  
Employee Retirement Plans (Tables)
 
                                 
    2010     2009  
    Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Changes in projected benefit obligation:
                               
Projected benefit obligation at January 1
  $ 806     $ 152     $ 758     $ 147  
Service cost
    3             9       1  
Interest cost
    45       9       45       9  
Participant contributions
    1             1        
Actuarial loss (gain), net
    61       12       27       9  
Foreign currency exchange
    (10 )           9        
Disposition
                (3 )      
Recognized curtailment loss
    (1 )           (3 )     (5 )
Benefit payments
    (37 )     (10 )     (37 )     (9 )
                                 
Projected benefit obligation at December 31
  $ 868     $ 163     $ 806     $ 152  
                                 
Changes in fair value of plan assets:
                               
Fair value of plan assets at January 1
  $ 474     $     $ 414     $  
Actual return on plan assets
    46             74        
Foreign currency exchange
    (3 )           7        
Company contributions
    31       10       18       9  
Participant contributions
    1             1        
Disposition
                (1 )      
Expenses, other
    (3 )           (2 )      
Benefit payments
    (37 )     (10 )     (37 )     (9 )
                                 
Fair value of plan assets at December 31
  $ 509     $     $ 474     $  
                                 
Funded status at December 31:
  $ (359 )   $ (163 )   $ (332 )   $ (152 )
                                 
 
                                 
    At December 31, 2010     At December 31, 2009  
    Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Accrued liabilities
  $ (3 )   $ (11 )   $ (3 )   $ (10 )
Deferred income taxes and other
    (356 )     (152 )     (329 )     (142 )
                                 
Total net liability
  $ (359 )   $ (163 )   $ (332 )   $ (152 )
                                 
 
 
                                 
    At December 31, 2010     At December 31, 2009  
    Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Net loss
  $ 326     $ 31     $ 287     $ 20  
Net transition obligation
    1             1        
Net prior service cost
    (1 )           (2 )      
                                 
Total
  $ 326     $ 31     $ 286     $ 20  
                                 
 
                                 
    At December 31
    2010   2009
    Qualified   Non-Qualified   Qualified   Non-Qualified
 
Projected benefit obligation
  $ 868     $ 163     $ 797     $ 152  
Accumulated benefit obligation
  $ 866     $ 163     $ 793     $ 152  
Fair value of plan assets
  $ 509     $     $ 466     $  
 
                                                 
    2010     2009     2008  
    Qualified     Non-Qualified     Qualified     Non-Qualified     Qualified     Non-Qualified  
 
Service cost
  $ 3     $     $ 9     $ 1     $ 14     $ 2  
Interest cost
    45       9       45       9       46       9  
Expected return on plan assets
    (34 )           (29 )           (48 )      
Recognized prior service cost
    (1 )                             2  
Recognized curtailment loss
                3       5       1        
Recognized net loss
    10             12             1        
                                                 
Net periodic pension cost
  $ 23     $ 9     $ 40     $ 15     $ 14     $ 13  
                                                 
 
                 
    At December 31  
    2010     2009  
 
Equity securities
    67%       71%  
Debt securities
    31%       26%  
Other
    2%       3%  
                 
Total
    100%       100%  
                 
 
                                 
    Assets at Fair Value as of December 31,
 
    2010  
    Level 1     Level 2     Level 3     Total  
 
Common and preferred stocks
  $ 261     $ 19     $     $ 280  
Limited Partnerships
                64       64  
Debt securities
    100       57             157  
Short-term and other investments
    8                   8  
                                 
Total assets at fair value
  $ 369     $ 76     $ 64     $ 509  
                                 
 
                                 
    Assets at Fair Value as of December 31,
 
    2009  
    Level 1     Level 2     Level 3     Total  
 
Common and preferred stocks
  $ 267     $ 17     $     $ 284  
Limited Partnerships
                52       52  
Debt securities
    97       25             122  
Short-term and other investments
    16                   16  
                                 
Total assets at fair value
  $ 380     $ 42     $ 52     $ 474  
                                 
 
                 
    Year Ended
    Year Ended
 
    December 31, 2010
    December 31, 2009
 
    Limited Partnerships     Limited Partnerships  
 
Balance, beginning of year
  $ 52     $ 48  
Purchases, sales, issuances and settlements (net)
    12       4  
Unrealized losses
           
                 
Balance, end of year
    64       52  
                 
 
                         
    December 31
    2010   2009   2008
 
Discount rate for obligations
    5.30%       5.80%       6.10%  
Expected return on plan assets
    7.25%       8.00%       8.00%  
Rate of compensation increase
    1.00%       2.00%       4.00%  
Discount rate for net periodic pension cost
    5.80%       6.10%       6.25%  
 
                 
    Qualified
  Non-Qualified
    Plans   Plans
 
2011
  $ 38     $ 10  
2012
  $ 40     $ 11  
2013
  $ 41     $ 11  
2014
  $ 41     $ 12  
2015
  $ 43     $ 12  
2016-2020
  $ 235     $ 59  
Stockholders' Equity (Tables)
Accumulated other comprehensive income attributable to Masco Corporation
 
                 
    At December 31
    2010   2009
 
Cumulative translation adjustments
  $ 505     $ 546  
Unrealized gain on marketable securities, net
    26       25  
Unrecognized prior service cost and net loss, net
    (258 )     (205 )
                 
Accumulated other comprehensive income
  $ 273     $ 366  
                 
Segment Information (Tables)
Company by segment and geographic area
 
                                                                         
    Net Sales (1)(2)(3)(4)(5)     Operating (Loss) Profit(5)(6)     Assets at December 31 (11)(12)  
    2010     2009     2008     2010     2009     2008     2010     2009     2008  
 
The Company’s operations by segment were:
                                                                       
Cabinets and Related Products
  $ 1,464     $ 1,674     $ 2,276     $ (250 )   $ (64 )   $ 4     $ 1,108     $ 1,382     $ 1,518  
Plumbing Products
    2,692       2,564       3,002       331       237       110       1,866       1,815       1,877  
Installation and Other Services
    1,147       1,256       1,861       (834 )     (131 )     (46 )     1,537       2,339       2,454  
Decorative Architectural Products
    1,693       1,714       1,629       345       375       299       851       871       878  
Other Specialty Products
    596       584       716       19       (199 )     (124 )     1,182       1,197       1,441  
                                                                         
Total
  $ 7,592     $ 7,792     $ 9,484     $ (389 )   $ 218     $ 243     $ 6,544     $ 7,604     $ 8,168  
                                                                         
The Company’s operations by geographic area were:
                                                                       
North America
  $ 5,929     $ 6,135     $ 7,482     $ (543 )   $ 93     $ 493     $ 5,063     $ 6,113     $ 6,648  
International, principally Europe
    1,663       1,657       2,002       154       125       (250 )     1,481       1,491       1,520  
                                                                         
Total, as above
  $ 7,592     $ 7,792     $ 9,484       (389 )     218       243       6,544       7,604       8,168  
                                                                         
General corporate expense, net (7)
    (110 )     (140 )     (144 )                        
Charge for defined-benefit curtailment (8)
          (8 )                              
Charge for litigation settlements (9)
          (7 )     (9 )                        
Accelerated stock compensation expense (10)
          (6 )                              
Loss on corporate fixed assets, net
          (2 )                              
                                                 
Operating (loss) profit, as reported
    (499 )     55       90                          
Other income (expense), net
    (278 )     (206 )     (283 )                        
                                                 
Loss from continuing operations before income taxes
  $ (777 )   $ (151 )   $ (193 )                        
                                                 
Corporate assets
    1,596       1,571       1,315  
                         
Total assets
  $ 8,140     $ 9,175     $ 9,483  
                         
 
                                                 
          Depreciation and
 
    Property Additions(5)     Amortization(5)  
    2010     2009     2008     2010     2009     2008  
 
The Company’s operations by segment were:
                                               
Cabinets and Related Products
  $ 34     $ 30     $ 50     $ 112     $ 84     $ 70  
Plumbing Products
    65       47       72       63       70       72  
Installation and Other Services
    7       30       45       40       35       23  
Decorative Architectural Products
    9       7       14       18       18       18  
Other Specialty Products
    18       7       10       26       28       33  
                                                 
      133       121       191       259       235       216  
Unallocated amounts, principally related to corporate assets
    4       1       2       20       17       16  
                                                 
Total
  $ 137     $ 122     $ 193     $ 279     $ 252     $ 232  
                                                 
Other Income (Expense), Net (Tables)
Other, net
 
                         
    2010     2009     2008  
 
Income from cash and cash investments
  $ 6     $ 7     $ 22  
Other interest income
    1       2       2  
Income from financial investments, net (Note E)
    9       3       1  
Other items, net
    (9 )     17       (22 )
                         
Total other, net
  $ 7     $ 29     $ 3  
                         
 
Income Taxes (Tables)
 
                         
          (In Millions)  
    2010     2009     2008  
 
(Loss) income from continuing operations before income taxes:
                       
U.S. 
  $ (964 )   $ (301 )   $ 4  
Foreign
    187       150       (197 )
                         
    $ (777 )   $ (151 )   $ (193 )
                         
Income tax expense (benefit) on (loss) income from continuing operations:
                       
Currently payable:
                       
U.S. Federal
  $ (24 )   $ (29 )   $ 6  
State and local
    22       12       20  
Foreign
    59       45       68  
Deferred:
                       
U.S. Federal
    177       (64 )     47  
State and local
    (9 )     (2 )     4  
Foreign
          (11 )     (11 )
                         
    $ 225     $ (49 )   $ 134  
                         
Deferred tax assets at December 31:
                       
Receivables
  $ 15     $ 19          
Inventories
    35       31          
Other assets, principally stock-based compensation
    119       135          
Accrued liabilities
    143       171          
Long-term liabilities
    227       200          
Net operating loss carryforward
    136       63          
Capital loss carryforward
    3                
Tax credit carryforward
    12       6          
                         
      690       625          
Valuation allowance
    (462 )     (43 )        
                         
      228       582          
                         
Deferred tax liabilities at December 31:
                       
Property and equipment
    223       324          
Investment in foreign subsidiaries
          9          
Intangibles
    323       398          
Other, principally notes payable
    29       32          
                         
      575       763          
                         
Net deferred tax liability at December 31
  $ 347     $ 181          
                         
 
                         
    2010     2009     2008  
 
U.S. federal statutory tax rate – (benefit)
    (35 )%     (35 )%     (35 )%
State and local taxes, net of U.S. Federal tax benefit
    1       4       8  
Lower taxes on foreign earnings
    (1 )     (11 )     (11 )
Foreign uncertain tax positions
          (5 )      
Change in U.S. and foreign taxes on distributed and undistributed foreign earnings, including the impact of foreign tax credit
          5       35  
Goodwill impairment charges providing no tax benefit
    17       10       73  
U.S. Federal valuation allowance
    48              
Other, net
    (1 )     (1 )     (1 )
                         
Effective tax rate – expense (benefit)
    29 %     (33 )%     69 %
                         
 
                         
          (In Millions)  
    Uncertain
    Interest and
       
    Tax Positions     Penalties     Total  
 
Balance at January 1, 2009
  $ 81     $ 25     $ 106  
Current year tax positions:
                       
Additions
    5               5  
Reductions
    (1 )             (1 )
Prior year tax positions:
                       
Additions
    7               7  
Reductions
    (8 )             (8 )
Settlements with tax authorities
    (13 )     (3 )     (16 )
Lapse of applicable statute of limitations
    (6 )             (6 )
Interest and penalties recognized in income tax expense
            (1 )     (1 )
                         
Balance at December 31, 2009
  $ 65     $ 21     $ 86  
                         
Current year tax positions:
                       
Additions
    6               6  
Prior year tax positions:
                       
Additions
    18               18  
Reductions
    (5 )             (5 )
Settlements with tax authorities
    (3 )     (1 )     (4 )
Lapse of applicable statute of limitations
    (10 )             (10 )
Interest and penalties recognized in income tax expense
            3       3  
                         
Balance at December 31, 2010
  $ 71     $ 23     $ 94  
                         
Earning Per Common Share (Tables)
Numerators and denominators used in the computations of basic and diluted earnings per common share
 
                         
    2010     2009     2008  
 
Numerator (basic and diluted):
                       
Loss from continuing operations
  $ (1,043 )   $ (140 )   $ (366 )
Allocation to unvested restricted stock awards
    (3 )     (3 )     (7 )
                         
Loss from continuing operations attributable to common shareholders
    (1,046 )     (143 )     (373 )
Loss from discontinued operations, net
          (43 )     (25 )
                         
Net loss available to common shareholders
  $ (1,046 )   $ (186 )   $ (398 )
                         
Denominator:
                       
Basic common shares (based on weighted average)
    349       351       353  
Add:
                       
Contingent common shares
                 
Stock option dilution
                 
                         
Diluted common shares
    349       351       353  
                         
Other Commitments and Contingencies (Tables)
Warranty liability
 
                 
    2010     2009  
 
Balance at January 1
  $ 109     $ 119  
Accruals for warranties issued during the year
    42       32  
Accruals related to pre-existing warranties
    (4 )     5  
Settlements made (in cash or kind) during the year
    (37 )     (44 )
Other, net (including currency translation)
    (3 )     (3 )
                 
Balance at December 31
  $ 107     $ 109  
                 
Interim Financial Information (Unaudited) (Tables)
Interim Financial Information(Unaudited)
 
                                         
        (In Millions, Except Per Common Share Data)
    Total
  Quarters Ended
    Year   December 31   September 30   June 30   March 31
 
2010
                                       
Net sales
  $ 7,592     $ 1,735     $ 1,957     $ 2,048     $ 1,852  
Gross profit
  $ 1,840     $ 308     $ 494     $ 546     $ 492  
(Loss) income from continuing operations
  $ (1,043 )   $ (1,034 )   $ (5 )   $ 3     $ (7 )
Net (loss) income
  $ (1,043 )   $ (1,034 )   $ (5 )   $ 3     $ (7 )
(Loss) earnings per common share:
                                       
Basic:
                                       
(Loss) income from continuing operations
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
Net (loss) income
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
Diluted:
                                       
(Loss) income from continuing operations
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
Net (loss) income
  $ (3.00 )   $ (2.96 )   $ (.02 )   $ .01     $ (.02 )
2009
                                       
Net sales
  $ 7,792     $ 1,898     $ 2,084     $ 2,013     $ 1,797  
Gross profit
  $ 2,018     $ 495     $ 567     $ 543     $ 413  
(Loss) income from continuing operations
  $ (140 )   $ (173 )   $ 51     $ 67     $ (85 )
Net income (loss)
  $ (183 )   $ (185 )   $ 28     $ 55     $ (81 )
(Loss) earnings per common share:
                                       
Basic:
                                       
(Loss) income from continuing operations
  $ (.41 )   $ (.49 )   $ .14     $ .19     $ (.24 )
Net (loss) income
  $ (.53 )   $ (.53 )   $ .08     $ .15     $ (.23 )
Diluted:
                                       
(Loss) income from continuing operations
  $ (.41 )   $ (.49 )   $ .14     $ .19     $ (.24 )
Net (loss) income
  $ (.53 )   $ (.53 )   $ .08     $ .15     $ (.23 )
Accounting Policies (Details)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expense for stock awards stock granted
 
 
Accounting Policies (Textuals) [Abstract]
 
 
 
Expected useful life of products
 
 
Maturity period of cash and cash investments
Three months or less 
 
 
Accounts Receivable Net
65 
75 
 
Unbilled revenue related to the Installation and Other Services
12 
15 
 
Annual depreciation rate for Buildings and land improvements
2 to 10 percent 
 
 
Annual depreciation rate for machinery and equipment
5 to 33 percent 
 
 
Depreciation expense
261 
237 
220 
Assumed annual growth rate of cash Flows
1-3 Percent 
 
 
Discount rate on estimated discounted cash flows
0.08 
 
 
Range of increase in discount rate
9-11 percent 
9-11 percent 
 
Ownership percentage of Hansgrohe AG
0.68 
0.68 
 
Noncontrolling Interest, Increase from Stock Issuance of additional four percent ownership in Hangshore AG
 
With effect from January 1, 2006 [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expense for stock awards stock granted
Typically 5 to 10 years (except for stock awards held by grantees age 66 or older, which vest over five years), or the length of time until the grantee becomes retirement-eligible at age 65 
 
 
Stock awards granted prior to January 1, 2006 [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expense for stock awards stock granted
Typically 10 years, or for executive grantees that are, or will become, retirement-eligible during the vesting period, the expense is being recognized over five years or immediately upon a grantee’s retirement. 
 
 
Subsequent to January 1, 2006 [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expense for stock awards stock granted
Typically five years, or the length of time until the grantee becomes retirement-eligible at age 65. 
 
 
Stock Option [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expense for stock awards stock granted
5 years 
 
 
Discontinued Operations (Details)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Net pre tax loss on sale of business units
 
(40)
Total Net Proceeds from the sale of discontinued operations
 
179 
Impairment of assets, goodwill
(711)
262 
 
Impairment of assets, Other assets
34 
10 
58 
Net gain on disposal
 
(40)
(38)
Financial information for discontinued operations
 
 
 
Net sales
 
66 
216 
(Loss) from discontinued operations
 
(10)
(5)
Impairment of assets held for sale
 
 
(45)
(Loss) gain on disposal of discontinued operations, net
 
(40)
(Loss) before income tax
 
(50)
(47)
Income tax benefit (expense)
 
(7)
(22)
Loss from discontinued operations, net
 
(43)
(25)
Discontinued Operations (Textuals) [Abstract]
 
 
 
Proceeds from sale of business units
 
 
Gain (Loss) on disposal of discontinued operations
 
 
Other income included in (loss) gain on disposal of discontinued operations
 
 
Other net expenses included in (loss) gain on disposal of discontinued operations
 
 
Income tax benefit (expense) related to (loss) from discontinued operations
 
Number of Business Units Sold
 
 
Damixa and Breuer [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Net pre tax loss on sale of business units
 
43 
 
Financial information for discontinued operations
 
 
 
(Loss) gain on disposal of discontinued operations, net
 
43 
 
The Heating Group Business Unit [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Total Net Proceeds from the sale of discontinued operations
 
174 
 
Net gain on disposal
 
 
Segment, Discontinued Operations [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Impairment of assets, goodwill
 
24 
 
Impairment of assets, Other assets
 
21 
 
Acquisitions (Details)
In Millions
Year Ended
Dec. 31,
2009
2008
Dec. 31, 2010
Acquisitions (Textuals) [Abstract]
 
 
 
Annual sale after acquisition
11 
40 
 
Outstanding contigent consideration
 
Cash paid for Acquisition related consideration
 
 
Total net cash purchase price of acquisitions
18 
 
Inventories (Details) (USD $)
In Millions
Dec. 31, 2010
Dec. 31, 2009
Inventories [Abstract]
 
 
Finished goods
$ 393 
$ 405 
Raw material
246 
247 
Work in process
93 
91 
Total
$ 732 
$ 743 
Financial Investments Included in Other Assets (Details 1) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
Financial investments included in other assets
 
 
Total recurring investments
$ 62 
$ 110 
Total non-recurring investments
119 
132 
Total
181 
242 
Company's investments in available-for-sale securities
 
 
Cost Basis
22 
71 
Pre-tax Unrealized Gains
40 
39 
Pre-tax Unrealized Losses
Recorded Basis
62 
110 
Asahi Tec Corporation - preferred stock [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
71 
Auction rate securities [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
22 
22 
Common Shares ($1 par value)
 
 
Financial investments included in other assets
 
 
Total recurring investments
40 
17 
Private equity funds [Member]
 
 
Financial investments included in other assets
 
 
Total non-recurring investments
106 
123 
Other investments [Member]
 
 
Financial investments included in other assets
 
 
Total non-recurring investments
$ 13 
$ 9 
Recurring Fair Value Measurements (Details 2) (USD $)
In Millions
Dec. 31, 2010
Dec. 31, 2009
Financial investments included in other assets
 
 
Total recurring investments
$ 62 
$ 110 
Asahi Tec Corporation - preferred stock [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
71 
Asahi Tec Corporation - preferred stock [Member] | Quoted Market Prices (Level 1) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
 
Asahi Tec Corporation - preferred stock [Member] | Significant Other Observable Inputs (Level 2) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
 
Asahi Tec Corporation - preferred stock [Member] | Significant Unobservable Inputs Level 3 [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
 
71 
Auction rate securities [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
22 
22 
Auction rate securities [Member] | Quoted Market Prices (Level 1) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
Auction rate securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
Auction rate securities [Member] | Significant Unobservable Inputs Level 3 [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
22 
22 
Common Shares ($1 par value)
 
 
Financial investments included in other assets
 
 
Total recurring investments
40 
17 
Common Shares ($1 par value) | Quoted Market Prices (Level 1) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
40 
17 1
Common Shares ($1 par value) | Significant Other Observable Inputs (Level 2) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
Common Shares ($1 par value) | Significant Unobservable Inputs Level 3 [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
Quoted Market Prices (Level 1) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
40 
17 
Significant Other Observable Inputs (Level 2) [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
Significant Unobservable Inputs Level 3 [Member]
 
 
Financial investments included in other assets
 
 
Total recurring investments
$ 22 
$ 93 
Level 3 Financial Assets Fair Value (Details 3) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2010
2009
2010
Dec. 31, 2008
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Fair value, Beginning Balance
$ 93 
$ 94 
$ 71 
$ 72 
$ 22 
$ 22 
Total losses included in earnings
(28)
 
(28)
 
 
Unrealized (losses)
(23)
(1)
(23)
(1)
 
Purchases, issuances, settlements
 
 
 
Transfers from Level 3 to Level 2
(20)
 
(20)
 
 
Fair value, Ending Balance
$ 22 
$ 93 
$ 0 
$ 71 
$ 22 
$ 22 
Non-recurring Fair Value Measurements (Details 4) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
$ 2 
$ 34 
Impairment charges for financial investments
(34)
(10)
Asahi Tec Corporation - preferred stock [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Impairment charges for financial investments
(28)
 
Private equity funds [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
31 
Impairment charges for financial investments
(4)
(10)
Private equity funds [Member] | Quoted Market Prices (Level 1) [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Private equity funds [Member] | Significant Other Observable Inputs (Level 2) [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Private equity funds [Member] | Significant Unobservable Inputs Level 3 [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
31 
Private equity funds [Member] | Non Recurring Fair-Value Measurements [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Impairment charges for financial investments
(4)
(10)
Other investments [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Impairment charges for financial investments
(2)
 
Other investments [Member] | Quoted Market Prices (Level 1) [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Other investments [Member] | Significant Other Observable Inputs (Level 2) [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Other investments [Member] | Significant Unobservable Inputs Level 3 [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Other investments [Member] | Non Recurring Fair-Value Measurements [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Impairment charges for financial investments
(2)
Quoted Market Prices (Level 1) [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Significant Other Observable Inputs (Level 2) [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
Significant Unobservable Inputs Level 3 [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Fair value on a non-recurring basis of financial investments
34 
Non Recurring Fair-Value Measurements [Member]
 
 
Non-Recurring Fair Value Measurements
 
 
Impairment charges for financial investments
$ (6)
$ (10)
Impairment Charges for Financial Assets (Details 5)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Schedule of Investments [Line Items]
 
 
 
Realized gains from marketable securities
10 
 
 
Realized losses from marketable securities
(8)
 
(3)
Income from financial investments, net
Impairment charges:
 
 
 
Total impairment charges
(34)
(10)
(58)
Asahi Tec Corporation - preferred stock [Member]
 
 
 
Impairment charges:
 
 
 
Total impairment charges
(28)
 
(1)
Common Shares ($1 par value)
 
 
 
Impairment charges:
 
 
 
Total impairment charges
 
 
(31)
Private equity funds [Member]
 
 
 
Impairment charges:
 
 
 
Total impairment charges
(4)
(10)
(23)
Fair value determined with unrealized losses
 
 
 
Fair Value
 
Less than 12 Months
 
Over 12 Months
 
Other investments [Member]
 
 
 
Schedule of Investments [Line Items]
 
 
 
Dividend income
 
 
Income from other investments, net
Impairment charges:
 
 
 
Total impairment charges
(2)
 
(3)
Marketable Securities [Member]
 
 
 
Schedule of Investments [Line Items]
 
 
 
Dividend income
 
 
Impairment charges:
 
 
 
Total impairment charges
 
 
(1)
Fair Value of Financial Investments and Liabilities (Details Textuals)
Year Ended
Dec. 31,
6 Months Ended
Jun. 30, 2010
2010
2009
2008
Schedule of Investments [Line Items]
 
 
 
 
Impairment charges for financial investments
 
(34,000,000)
(10,000,000)
(58,000,000)
Fair Value of Financial Investments and Liabilities (Textuals) [Abstract]
 
 
 
 
Venture capital fund, Aggregate carrying value
 
22,000,000 
 
 
Number of venture capital fund
 
17 
 
 
Number of buy out fund
 
26 
 
 
Buy out fund, Aggregate carrying value
 
84,000,000 
 
 
Auction rate securities interest rates reset periods
 
7, 28 or 35 days 
 
 
Aggregate carrying value of remaining private equity funds
 
104,000,000 
92,000,000 
 
Estimated decline in the private equity fund value
 
6,000,000 
41,000,000 
66,000,000 
Estimated market value of long-term and short-term debt
 
4,200,000,000 
3,900,000,000 
 
Aggregate carrying value of long-term and short-term debt
 
4,100,000,000 
4,000,000,000 
 
Impairment charges for financial investments
 
10,000,000 
13,000,000 
 
Impairment loss on fair value of marketable securities
 
28,000,000 
 
 
Reversal of unrealized gain from accumulated other comprehensive income
23,000,000 
 
 
 
Cash proceeds from marketable securities
 
11,000,000 
 
 
Realized losses from marketable securities
 
8,000,000 
 
 
Tax refund on disposition of securities
 
16,000,000 
 
 
Discount rate on marketable securities
 
600 Basis Points 
 
 
Sale of financial investments, Shares
 
481,000 
 
 
Sale of financial investments
 
10,000,000 
 
 
Asahi Tec Corporation - preferred stock [Member]
 
 
 
 
Schedule of Investments [Line Items]
 
 
 
 
Impairment charges for financial investments
 
(28,000,000)
 
(1,000,000)
Common Shares ($1 par value)
 
 
 
 
Schedule of Investments [Line Items]
 
 
 
 
Impairment charges for financial investments
 
 
 
(31,000,000)
Private equity funds [Member]
 
 
 
 
Schedule of Investments [Line Items]
 
 
 
 
Impairment charges for financial investments
 
(4,000,000)
(10,000,000)
(23,000,000)
Other investments [Member]
 
 
 
 
Schedule of Investments [Line Items]
 
 
 
 
Impairment charges for financial investments
 
(2,000,000)
 
(3,000,000)
Derivatives (Details)
In Millions
Year Ended
Dec. 31,
Year Ended
Dec. 31,
2010
2009
2008
Dec. 31, 2010
Dec. 31, 2009
2010
2009
Dec. 31, 2010
Derivatives (Textuals) [Abstract]
 
 
 
 
 
 
 
 
Notional Amount of Foreign Currency Derivative Purchase Contracts
10 
 
43 
55 
 
 
 
Gains (losses) related to these foreign currency forward contracts recorded in the Company consolidated statements of income
 
 
 
 
 
(2)
(1)
 
Foreign currency exchange contracts to hedge currency with notional amounts fluctuations related to intercompany loans
 
 
 
 
 
 
 
Loss on the foreign currency exchange contract
 
 
 
 
 
 
 
Gain related to hedging contracts
 
 
 
 
 
 
 
Assets recorded by the company as a result of hedging activities
 
 
 
 
 
 
 
Increase Decrease in Interest expense due to amortization of gain on discontinuation of interest rate swap agreement
 
10 
12 
 
 
 
 
 
Number of interest rate swap agreement
 
 
 
 
 
 
 
Property and Equipment (Details)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Property and Equipment
 
 
 
Land and improvements
190 
195 
 
Buildings
1,030 
1,044 
 
Machinery and equipment
2,419 
2,420 
 
Property and equipment, Gross
3,639 
3,659 
 
Less: Accumulated depreciation
1,902 
1,678 
 
Total
1,737 
1,981 
 
Property and Equipment (Textuals) [Abstract]
 
 
 
Rental expense
111 
135 
161 
Rental expense to related parties
10 
Future minimum lease payments, 2011
75 
 
 
Future minimum lease payments, 2012
48 
 
 
Future minimum lease payments, 2013
28 
 
 
Future minimum lease payments, 2014
18 
 
 
Future minimum lease payments,2015 and beyond
76 
 
 
Non-cash pre-tax impairment charges
67 
 
 
Carrying value of manufacturing facility before impairment
99 
 
 
Goodwill and Other Intangible Assets (Details) (USD $)
In Millions
3 Months Ended
Dec. 31,
Year Ended
Dec. 31,
2010
2009
2010
2009
2008
Changes in carrying amount of goodwill
 
 
 
 
 
Gross Goodwill
$ 4,216 
$ 4,230 
$ 4,216 
$ 4,230 
$ 4,231 
Accumulated Impairment Losses
(1,833)
(1,122)
(1,833)
(1,122)
(860)
Goodwill
2,383 
3,108 
2,383 
3,108 
3,371 
Additions
 
 
1
1
 
Discontinued Operations
 
 
(13)
24 
Pre-tax impairment charges for goodwill
 
 
(711)
262 
 
Other
 
 
(14)2
2
 
Goodwill and Other Intangible Assets (Textuals) [Abstract]
 
 
 
 
 
Other indefinite-lived intangible assets
185 
196 
185 
196 
 
Carrying value of definite-lived intangible assets
84 
94 
84 
94 
 
Accumulated amortization
77 
67 
77 
67 
 
Charges for write-down of goodwill
 
 
(13)
24 
Pre-tax impairment charges for goodwill
 
 
(711)
262 
 
After-tax impairment charges for goodwill
593 
180 
587 
180 
 
Weighted average amortization period
 
 
15 
15 
 
Amortization expense related to the definite-lived intangible assets
 
 
11 
11 
16 
Amortization expense related to the definite-lived intangible assets, 2011
 
 
11 
 
 
Amortization expense related to the definite-lived intangible assets, 2012
 
 
10 
 
 
Amortization expense related to the definite-lived intangible assets, 2013
 
 
 
 
Amortization expense related to the definite-lived intangible assets, 2014
 
 
 
 
Amortization expense related to the definite-lived intangible assets, 2015
 
 
 
 
Pre-tax impairment charges for other indefinite-lived intangible assets
 
 
10 
 
 
After tax impairment charges for other indefinite-lived intangible assets
 
 
 
 
Cabinets and Related Products [Member]
 
 
 
 
 
Changes in carrying amount of goodwill
 
 
 
 
 
Gross Goodwill
 
 
587 
590 
589 
Accumulated Impairment Losses
 
 
(364)
(364)
(364)
Goodwill
 
 
223 
226 
225 
Other
 
 
(3)2
2
 
Plumbing Products [Member]
 
 
 
 
 
Changes in carrying amount of goodwill
 
 
 
 
 
Gross Goodwill
 
 
536 
547 
549 
Accumulated Impairment Losses
 
 
(340)
(340)
(301)
Goodwill
 
 
196 
207 
248 
Additions
 
 
1
1
 
Discontinued Operations
 
 
(13)
 
Pre-tax impairment charges for goodwill
 
 
39 
 
Other
 
 
(11)2
2
 
Goodwill and Other Intangible Assets (Textuals) [Abstract]
 
 
 
 
 
Charges for write-down of goodwill
 
 
(13)
 
Pre-tax impairment charges for goodwill
 
 
39 
 
Installation and Other Services [Member]
 
 
 
 
 
Changes in carrying amount of goodwill
 
 
 
 
 
Gross Goodwill
 
1,819 
1,819 
 
1,819 
Accumulated Impairment Losses
 
(51)
(762)
 
(51)
Goodwill
 
1,768 
1,057 
 
1,768 
Additions
 
 
1
 1
 
Discontinued Operations
 
 
 
 
Pre-tax impairment charges for goodwill
 
 
(711)
 
 
Other
 
 
2
 2
 
Goodwill and Other Intangible Assets (Textuals) [Abstract]
 
 
 
 
 
Charges for write-down of goodwill
 
 
 
 
Pre-tax impairment charges for goodwill
 
 
(711)
 
 
Decorative Architectural Products [Member]
 
 
 
 
 
Changes in carrying amount of goodwill
 
 
 
 
 
Gross Goodwill
 
294 
294 
 
294 
Accumulated Impairment Losses
 
 
Goodwill
 
294 
294 
 
294 
Additions
 
 
1
 1
 
Discontinued Operations
 
 
 
 
Pre-tax impairment charges for goodwill
 
 
 
 
Other
 
 
2
 2
 
Goodwill and Other Intangible Assets (Textuals) [Abstract]
 
 
 
 
 
Charges for write-down of goodwill
 
 
 
 
Pre-tax impairment charges for goodwill
 
 
 
 
Other Specialty Products [Member]
 
 
 
 
 
Changes in carrying amount of goodwill
 
 
 
 
 
Gross Goodwill
 
 
980 
980 
980 
Accumulated Impairment Losses
 
 
(367)
(367)
(144)
Goodwill
 
 
613 
613 
836 
Pre-tax impairment charges for goodwill
 
 
223 
 
Goodwill and Other Intangible Assets (Textuals) [Abstract]
 
 
 
 
 
Pre-tax impairment charges for goodwill
 
 
223 
 
Other Assets (Details) (USD $)
In Millions, unless otherwise specified
Year Ended
Dec. 31,
2010
2009
2008
Other Assets
 
 
 
Financial investments (Note E)
181 
242 
 
Instore displays
43 
44 
 
Debenture expense
34 
25 
 
Notes receivable
 
Other
27 
31 
 
Total
287 
345 
 
Other Assets (Textuals) [Abstract]
 
 
 
Amortization period of in-store displays in years
 
 
Amortization Expense Related To Instore Displays
33 
44 
43 
Amortization Method of in-store displays
straight-line method 
 
 
Cash spent for instore displays
$ 32 
$ 26 
$ 37 
Accrued Liabilities (Details) (USD $)
In Millions
Dec. 31, 2010
Dec. 31, 2009
Schedule of Accrued Liabilities
 
 
Insurance
$ 176 
$ 193 
Salaries, wages and commissions
177 
193 
Warranty (Note S)
107 
109 
Advertising and sales promotion
90 
80 
Interest
78 
68 
Employee retirement plans
43 
36 
Property, payroll and other taxes
32 
35 
Dividends payable
27 
27 
Litigation
Plant closures
Other
80 
81 
Total
$ 819 
$ 839 
Debt (Details)
Year Ended
Dec. 31,
3 Months Ended
Sep. 30, 2010
9 Months Ended
Sep. 30, 2010
2010
2009
2008
Jun. 21, 2010
Mar. 12, 2010
Mar. 10, 2010
Jan. 20, 2007
Nov. 04, 2004
Jul. 31, 2001
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
4,098,000,000 
3,968,000,000 
 
 
 
 
 
 
 
Less: Current portion
 
 
66,000,000 
364,000,000 
 
 
 
 
 
 
 
Total Long-term debt
 
 
4,032,000,000 
3,604,000,000 
 
 
 
 
 
 
 
Debt (Textuals) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Issued notes
 
 
 
 
 
 
 
500,000,000 
 
 
 
Principal amount of Zero Coupon Convertible Senior Notes
108,000,000 
108,000,000 
108,000,000 
108,000,000 
 
 
 
 
 
 
 
Accreted value, Principal amount of Zero Coupon Convertible Senior Notes
57,000,000 
57,000,000 
57,000,000 
55,000,000 
 
 
 
 
 
 
 
Retirement of floating rate notes
 
 
 
 
 
 
300,000,000 
 
 
 
 
Principal Amount at Maturity of Zero Coupon convertible Notes
 
 
 
 
 
 
 
 
1,800,000,000 
 
1,900,000,000 
Gross Proceeds on Zero Coupon convertible Notes
 
 
4,000,000 
3,000,000 
 
 
 
 
 
 
 
Issue price per note
 
 
$394.45 per $1,000 principal amount at maturity 
 
 
 
 
 
 
 
 
Payment of debt
 
 
(6,000,000)
(14,000,000)
(33,000,000)
 
 
 
 
 
 
Cumulative Effect of Accounting Change
 
 
1,000,000 
 
 
 
 
 
 
 
 
Interest Paid
 
 
241,000,000 
226,000,000 
232,000,000 
 
 
 
 
 
 
Aggregate commitment under Credit Agreement
 
 
 
 
 
1,250,000,000 
 
 
 
 
 
Terminated credit agreement
 
 
 
 
 
 
 
 
 
1,250,000,000 
 
Revolving credit agreement maturity period
 
 
 
 
 
 
 
 
 
 
Effective interest rate under credit agreement
 
either a rate per annum equal to the lower of prime rate, the Federal Funds effective rate plus 0.50% or LIBOR plus 1.0%; plus an applicable margin 
 
 
 
 
 
 
 
 
 
Either rate per annum equal to lower of prime rate, Federal Funds effective rate plus half percent plus an applicable margin
 
 
0.005 
 
 
 
 
 
 
 
 
Either rate per annum equal to lower of prime rate, Federal Funds effective LIBOR plus one percent plus an applicable margin
 
 
0.01 
 
 
 
 
 
 
 
 
Maximum debt to total capitalization ratio, in percent
 
 
0.65 
 
 
 
 
 
 
 
 
Minimum interest coverage ratio
 
 
equal to or greater than 2.25 to 1.0 
 
 
 
 
 
 
 
 
Minimum interest coverage ratio after period
 
 
 
2.50 to 1.0 
 
 
 
 
 
 
 
Maximum non cash charges can be added back
500,000,000 
 
 
 
 
 
 
 
 
 
 
Additional borrowing capacity
 
 
113,000,000 
 
 
 
 
 
 
 
 
Absorption of reduction to shareholders' equity to remain in compliance with covenant
61,000,000 
61,000,000 
 
 
 
 
 
 
 
 
 
Financial covenants
 
 
 
 
 
 
 
 
 
 
Borrowings under Five Year Revolving Credit Agreement
 
 
1,000,000,000 
 
 
 
 
 
 
 
Premium paid on purchase of the notes over par value
 
 
2,000,000 
 
 
 
 
 
 
 
 
Period of notes repurchase
 
 
July 20, 2011 and every five years thereafter 
 
 
 
 
 
 
 
 
Yield to Maturity, Zero Coupon convertible Bonds
 
 
0.03125 
 
 
 
 
 
 
 
 
Terms of notes conversion
 
 
the average price of Company common stock for the 20 days immediately prior to the conversion date exceeds 117 %, declining by 1/3% each year 
 
 
 
 
 
 
 
 
Conversion rate of Shares, per 1000
 
 
12.7317 
 
 
 
 
 
 
 
 
Maturities of long term Debt in the year 2011
 
 
66,000,000 
 
 
 
 
 
 
 
 
Maturities of long term Debt in the year 2012
 
 
808,000,000 
 
 
 
 
 
 
 
 
Maturities of long term Debt in the year 2013
 
 
201,000,000 
 
 
 
 
 
 
 
 
Maturities of long term Debt in the year 2014
 
 
1,000,000 
 
 
 
 
 
 
 
 
Maturities of long term Debt in the year 2015
 
 
501,000,000 
 
 
 
 
 
 
 
 
Aggregate amount add-back to shareholder's equity after tax
 
 
986,000,000 
 
 
 
 
 
 
 
 
Aggregate amount add-back of future non-cash charges
 
 
350,000,000 
 
 
 
 
 
 
 
 
Euro Denominated Revolver [Member]
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Borrowing capacity, maximum
 
 
500,000,000 
 
 
 
 
 
 
 
 
Swingline loans [Member]
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Borrowing capacity, maximum
 
 
150,000,000 
 
 
 
 
 
 
 
 
Letter of Credit [Member]
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Borrowing capacity, maximum
 
 
250,000,000 
 
 
 
 
 
 
 
 
Unused Letters of Credit
 
 
99,000,000 
 
 
 
 
 
 
 
 
Notes Payable, Other Payables [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Interest on notes
 
 
 
 
 
 
 
0.07125 
 
 
 
5.875% Notes and Debentures due July 2012 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
791,000,000 
850,000,000 
 
 
 
 
 
 
 
Interest on notes
 
 
0.05875 
 
 
 
 
 
 
 
 
Company repurchased Notes in open-market transactions
 
 
59,000,000 
 
 
 
 
 
 
 
 
7.125% Notes and Debentures due 15 August 2013 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
200,000,000 
200,000,000 
 
 
 
 
 
 
 
6.125% Notes and Debentures due 3 October 2016 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
1,000,000,000 
1,000,000,000 
 
 
 
 
 
 
 
5.85% Notes and Debentures due 15 March 2017 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
300,000,000 
300,000,000 
 
 
 
 
 
 
 
4.8% Notes and Debentures due 15 June 2015 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
500,000,000 
500,000,000 
 
 
 
 
 
 
 
6.625% Notes and Debentures Due 15 April 2018 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
114,000,000 
114,000,000 
 
 
 
 
 
 
 
Interest on notes
 
 
0.06625 
 
 
 
 
 
 
 
 
7.125% Notes and Debentures due 15 March 2020 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
500,000,000 
 
 
 
 
 
 
 
7.75% Notes and Debentures Due 1 August 2029 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
296,000,000 
296,000,000 
 
 
 
 
 
 
 
Interest on notes
 
 
0.0775 
 
 
 
 
 
 
 
 
6.5% Notes and Debentures Due 15 August 2032[ Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
300,000,000 
300,000,000 
 
 
 
 
 
 
 
Zero Coupon Convertible Senior Notes Due 2031 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
57,000,000 
55,000,000 
 
 
 
 
 
 
 
Floating Rate Notes Due 12 March 2010 [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
300,000,000 
 
 
 
 
 
 
 
Other Notes and Debentures [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of long-term debt
 
 
 
 
 
 
 
 
 
 
 
Long term debt includes notes and debentures
 
 
40,000,000 
53,000,000 
 
 
 
 
 
 
 
Stock-Based Compensation (Details)
In Millions, except Share data
Year Ended
Dec. 31,
2010
2009
2008
2007
Sep. 30, 2010
Sep. 30, 2009
Pre-tax compensation expense and related income tax benefit for stock -based incentives
 
 
 
 
 
 
Long-term stock awards
37 
37 
43 
 
 
 
Stock options
22 
25 
36 
 
 
 
Phantom stock awards and stock appreciation rights
(5)
 
 
 
Total
62 
69 
74 
 
 
 
Income tax benefit
23 
26 
27 
 
 
 
Company's long-term stock award activity
 
 
 
 
 
 
Unvested stock award shares at January 1
9,000,000 
8,000,000 
9,000,000 
 
10,000,000 
9,000,000 
Weighted average grant date fair value
21 
26 
28 
 
19 
21 
Stock award shares granted
3,000,000 
2,000,000 
2,000,000 
 
 
 
Weighted average grant date fair value
14 
21 
 
 
 
Stock award shares vested
2,000,000 
1,000,000 
2,000,000 
 
 
 
Weighted average grant date fair value
23 
26 
26 
 
 
 
Stock award shares forfeited
 
 
1,000,000 
 
 
 
Weighted average grant date fair value
20 
24 
28 
 
 
 
Unvested stock award shares at December 31
 
9,000,000 
8,000,000 
9,000,000 
10,000,000 
9,000,000 
Weighted average grant date fair value
 
21 
26 
28 
19 
21 
Companys stock option activity
 
 
 
 
 
 
Option shares outstanding, January 1
36,000,000 
31,000,000 
26,000,000 
 
 
 
Weighted average exercise price
23 
25 
27 
 
 
 
Option shares granted, including restoration options
5,000,000 
6,000,000 
6,000,000 
 
 
 
Weighted average exercise price
14 
19 
 
 
 
Option shares exercised
 
 
 
Aggregate intrinsic value on date of exercise (A)
1
 
 
 
 
 
Weighted average exercise price
 
20 
 
 
 
Option shares forfeited
4,000,000 
1,000,000 
1,000,000 
 
 
 
Weighted average exercise price
23 
22 
27 
 
 
 
Option shares outstanding, December 31
37,000,000 
36,000,000 
31,000,000 
26,000,000 
 
 
Weighted average exercise price
21 
23 
25 
27 
 
 
Weighted average remaining option term (in years)
 
 
 
Option shares vested and expected to vest, December 31
37,000,000 
36,000,000 
31,000,000 
 
 
 
Weighted average exercise price
22 
23 
25 
 
 
 
Aggregate intrinsic value (A)
23 1
31 1
 
 
 
 
Weighted average remaining option term (in years)
 
 
 
Option shares exercisable (vested), December 31
22,000,000 
21,000,000 
17,000,000 
 
 
 
Weighted average exercise price
25 
26 
26 
 
 
 
Aggregate intrinsic value (A)
1
 
 
 
 
 
Weighted average remaining option term (in years)
 
 
 
Weighted average grant date fair value of option shares granted and the assumptions used to estimate those values using a Black-Scholes option pricing model
 
 
 
 
 
 
Weighted average grant date fair value
5.30 
2.28 
3.72 
 
 
 
Risk-free interest rate
0.0276 
0.026 
0.0325 
 
 
 
Dividend yield
0.0217 
0.037 
0.0496 
 
 
 
Volatility factor
0.4603 
0.3918 
0.32 
 
 
 
Vesting period over which expense for stock options granted prior to January 1,2006 recognized
 
 
 
Stock-Based Compensation (Textuals) (Abstract)
 
 
 
 
 
 
Accelerated stock compensation expense
(6)
 
 
 
 
Common Stock Available for granting Stock Options
11,860,100 
 
 
 
 
 
Typical vesting period of stock awards granted prior to January 1, 2010
10 
 
 
 
 
 
Stock awards granted subsequent to January1, 2010 have a vesting period, in years
 
 
 
 
 
Total unrecognized compensation expense
127 
126 
155 
 
 
 
Remaining weighted average vesting period
5,000,000 
 
 
 
 
 
Total market value (at the vesting date) of stock award shares
22 
16 
30 
 
 
 
Grant and expire date
Not less then 10 years 
 
 
 
 
 
Stock option shares granted
5,000,000 
6,000,000 
6,000,000 
 
 
 
Approx grant date exercise price
11 to 15 
 
 
 
 
 
Stock option shares forfeited
4,000,000 
1,000,000 
1,000,000 
 
 
 
Unrecognized compensation expense related to unvested stock options
45 
41 
59 
 
 
 
Weighted average vesting period for unvested stock options
 
 
 
 
 
Income from Exercise of Stock Options
 
 
 
60 
 
 
Stock Based Compensation (Details 1) (USD $)
In Millions, except Per Share data, unless otherwise specified
Year Ended
Dec. 31, 2010
Range One [Member]
 
Stock Option Shares Outstanding and Exercisable
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit
$ 8,000,000 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit
23,000,000 
Option Shares Outstanding, Number of Shares
21,000,000 
Option Shares Outstanding, Weighted Average Remaining Option Term
Option Shares Outstanding, Weighted Average Exercise Price
15 
Option Shares Exercisable, Number of Shares
8,000,000 
Option Shares Exercisable, Weighted Average Exercise price
19 
Range Two [Member]
 
Stock Option Shares Outstanding and Exercisable
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit
24,000,000 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit
28,000,000 
Option Shares Outstanding, Number of Shares
6,000,000 
Option Shares Outstanding, Weighted Average Remaining Option Term
Option Shares Outstanding, Weighted Average Exercise Price
27 
Option Shares Exercisable, Number of Shares
5,000,000 
Option Shares Exercisable, Weighted Average Exercise price
27 
Range Three [Member]
 
Stock Option Shares Outstanding and Exercisable
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit
29,000,000 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit
32,000,000 
Option Shares Outstanding, Number of Shares
10,000,000 
Option Shares Outstanding, Weighted Average Remaining Option Term
Option Shares Outstanding, Weighted Average Exercise Price
30 
Option Shares Exercisable, Number of Shares
9,000,000 
Option Shares Exercisable, Weighted Average Exercise price
30 
Range Four [Member]
 
Stock Option Shares Outstanding and Exercisable
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit
33,000,000 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit
38,000,000 
Option Shares Outstanding, Number of Shares
Option Shares Outstanding, Weighted Average Remaining Option Term
Option Shares Outstanding, Weighted Average Exercise Price
34 
Option Shares Exercisable, Number of Shares
Option Shares Exercisable, Weighted Average Exercise price
34 
Range Five [Member]
 
Stock Option Shares Outstanding and Exercisable
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit
8,000,000 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit
38,000,000 
Option Shares Outstanding, Number of Shares
37,000,000 
Option Shares Outstanding, Weighted Average Remaining Option Term
Option Shares Outstanding, Weighted Average Exercise Price
21 
Option Shares Exercisable, Number of Shares
22,000,000 
Option Shares Exercisable, Weighted Average Exercise price
$ 25 
Stock Based Compensation (Details 2) (USD $)
In Millions, except Share data
Year Ended
Dec. 31,
2010
2009
2008
Phantom Stock Awards and Stock Appreciation Rights (Textuals) [Abstract]
 
 
 
Stock awards granted
3,000,000 
2,000,000 
2,000,000 
Fair value of Stock Awards
$ 22 
$ 16 
$ 30 
Phantom Stock Awards Member
 
 
 
Phantom Stock Awards and Stock Appreciation Rights
 
 
 
Accrued compensation cost liability
6,000,000 
5,000,000 
 
Unrecognized compensation cost
5,000,000 
5,000,000 
 
Equivalent common shares
1,000,000 
1,000,000 
 
Phantom Stock Awards and Stock Appreciation Rights (Textuals) [Abstract]
 
 
 
Expenses related to valuation
(2)
Stock awards granted
299,650 
318,920 
234,800 
Fair value of Stock Awards
Cash paid to settle phantom stock award
Stock Appreciation Rights Member
 
 
 
Phantom Stock Awards and Stock Appreciation Rights
 
 
 
Accrued compensation cost liability
5,000,000 
4,000,000 
 
Unrecognized compensation cost
2,000,000 
3,000,000 
 
Equivalent common shares
2,000,000 
2,000,000 
 
Phantom Stock Awards and Stock Appreciation Rights (Textuals) [Abstract]
 
 
 
Expenses related to valuation
(3)
Stock awards granted
429,300 
438,200 
597,200 
Fair value of Stock Awards
$ 2 
$ 1 
$ 2 
Employee Retirement Plans (Details)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
2010
2009
2008
Changes In Employee Retirement Plan Abstract
 
 
 
 
 
 
Projected benefit obligation at January 1
806 
758 
 
152 
147 
 
Service cost
14 
 
Interest cost
45 
45 
46 
Actuarial loss (gain), net
61 
27 
 
12 
 
Foreign currency exchange
(10)
 
 
 
Disposition
 
(3)
 
 
 
 
Recognized curtailment loss
(1)
(3)
 
 
(5)
 
Benefit payments
(37)
(37)
 
(10)
(9)
 
Projected benefit obligation at December 31
868 
806 
758 
163 
152 
147 
Fair value of plan assets, Beginning Balance
474 
414 
 
 
Actual return on plan assets
46 
74 
 
 
 
 
Foreign currency exchange
(3)
 
 
 
 
Company contributions
31 
18 
 
10 
 
Participant contributions
 
 
 
 
Expenses, other
(3)
(2)
 
 
 
 
Disposition In Fair Value Of Plan Assets
 
(1)
 
 
 
 
Fair value of plan assets, Ending Balance
509 
474 
414 
Funded status at December 31:
(359)
(332)
 
(163)
(152)
 
Employee Retirement Plans (Details 1) (USD $)
In Millions
Dec. 31, 2010
Dec. 31, 2009
Consolidated Balance Sheet
 
 
Accrued liabilities
$ 43 
$ 36 
Summary of Accumulated other Comprehensive Income Before income Taxes
 
 
Net loss
11 
 
Qualified [Member]
 
 
Consolidated Balance Sheet
 
 
Accrued liabilities
(3)
(3)
Deferred income taxes and other
(356)
(329)
Total net liability
(359)
(332)
Summary of Accumulated other Comprehensive Income Before income Taxes
 
 
Net loss
326 
287 
Net transition obligation
Net prior service cost
(1)
(2)
Total
326 
286 
Information About Plan Assets
 
 
Projected benefit obligation
868 
797 
Accumulated benefit obligation
866 
793 
Fair value of plan assets
509 
466 
Non-Qualified [Member]
 
 
Consolidated Balance Sheet
 
 
Accrued liabilities
(11)
(10)
Deferred income taxes and other
(152)
(142)
Total net liability
(163)
(152)
Summary of Accumulated other Comprehensive Income Before income Taxes
 
 
Net loss
31 
20 
Net transition obligation
Net prior service cost
Total
31 
20 
Information About Plan Assets
 
 
Projected benefit obligation
163 
152 
Accumulated benefit obligation
163 
152 
Fair value of plan assets
$ 0 
$ 0 
Employee Retirement Plans (Details 2) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Qualified [Member]
 
 
 
Net periodic pension cost for defined-benefit pension plans
 
 
 
Service cost
$ 3 
$ 9 
$ 14 
Interest cost
45 
45 
46 
Expected return on plan assets
(34)
(29)
(48)
Recognized prior service cost
(1)
 
 
Recognized curtailment loss
Recognized net loss
10 
12 
Net periodic pension cost
23 
40 
14 
Qualified defined-benefit pension plan weighted average asset allocation
 
 
 
Equity securities
0.67 
0.71 
 
Debt securities
0.31 
0.26 
 
Other
0.02 
0.03 
 
Total
 
Non-Qualified [Member]
 
 
 
Net periodic pension cost for defined-benefit pension plans
 
 
 
Service cost
 
Interest cost
Recognized prior service cost
 
 
Recognized curtailment loss
 
 
Net periodic pension cost
$ 9 
$ 15 
$ 13 
Employee Retirement Plans (Details 3) (Qualified [Member], USD $)
In Millions
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
$ 509 
$ 474 
$ 414 
Qualified [Member] | Quoted Market Prices (Level 1) [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
369 
380 
 
Qualified [Member] | Quoted Market Prices (Level 1) [Member] | Common And Preferred Stock [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
261 
267 
 
Qualified [Member] | Quoted Market Prices (Level 1) [Member] | Limited Partnership [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
 
Qualified [Member] | Quoted Market Prices (Level 1) [Member] | Debt Securities [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
100 
97 
 
Qualified [Member] | Quoted Market Prices (Level 1) [Member] | Short Term And Other Investments [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
16 
 
Qualified [Member] | Significant Other Observable Inputs (Level 2) [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
76 
42 
 
Qualified [Member] | Significant Other Observable Inputs (Level 2) [Member] | Common And Preferred Stock [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
19 
17 
 
Qualified [Member] | Significant Other Observable Inputs (Level 2) [Member] | Limited Partnership [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
 
Qualified [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
57 
25 
 
Qualified [Member] | Significant Other Observable Inputs (Level 2) [Member] | Short Term And Other Investments [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
 
Qualified [Member] | Significant Unobservable Inputs Level 3 [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
64 
52 
 
Qualified [Member] | Significant Unobservable Inputs Level 3 [Member] | Common And Preferred Stock [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
 
Qualified [Member] | Significant Unobservable Inputs Level 3 [Member] | Limited Partnership [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
64 
52 
 
Qualified [Member] | Significant Unobservable Inputs Level 3 [Member] | Debt Securities [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
 
Qualified [Member] | Significant Unobservable Inputs Level 3 [Member] | Short Term And Other Investments [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
 
Qualified [Member] | Common And Preferred Stock [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
280 
284 
 
Qualified [Member] | Limited Partnership [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
64 
52 
 
Qualified [Member] | Debt Securities [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
157 
122 
 
Qualified [Member] | Short Term And Other Investments [Member]
 
 
 
Qualified defined-benefit pension plan assets at fair value
 
 
 
Total assets at fair value
16 
 
Employee Retirement Plans (Details 4) (USD $)
In Millions
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Major assumptions used in defined-benefit pension plans
 
 
 
Discount rate for obligations
0.053 
0.058 
0.061 
Expected return on plan assets
0.0725 
0.08 
0.08 
Rate of compensation increase
0.01 
0.02 
0.04 
Discount rate for net periodic pension cost
0.058 
0.061 
0.0625 
Qualified [Member]
 
 
 
Summary of changes in the fair value of the qualified defined-benefit pension plan
 
 
 
Fair value of plan assets, Beginning Balance
$ 509 
$ 474 
$ 414 
Fair value of plan assets, Ending Balance
509 
474 
414 
Benefits expected to be paid
 
 
 
2011
38 
 
 
2012
40 
 
 
2013
41 
 
 
2014
41 
 
 
2015
43 
 
 
2016-2020
235 
 
 
Qualified [Member] | Limited Partnerships [Member]
 
 
 
Summary of changes in the fair value of the qualified defined-benefit pension plan
 
 
 
Fair value of plan assets, Beginning Balance
52 
48 
 
Purchases, sales, issuances and settlements (net)
12 
 
Unrealized losses
 
Fair value of plan assets, Ending Balance
64 
52 
 
Non-Qualified [Member]
 
 
 
Summary of changes in the fair value of the qualified defined-benefit pension plan
 
 
 
Fair value of plan assets, Beginning Balance
Fair value of plan assets, Ending Balance
Benefits expected to be paid
 
 
 
2011
10 
 
 
2012
11 
 
 
2013
11 
 
 
2014
12 
 
 
2015
12 
 
 
2016-2020
59 
 
 
Employee Retirement Plans (Details Textuals)
In Millions
Year Ended
Dec. 31,
2011
2010
2009
2008
Dec. 31, 2009
Mar. 31, 2009
Employee Retirement Plans (Textuals) [Abstract]
 
 
 
 
 
 
Aggregate charges to earnings under defined benefit plan
 
37 
63 
38 
 
 
Aggregate charges to earnings under defined Contribution Retirement Plan
 
47 
35 
30 
 
 
Curtailment charges on benefit obligation
 
 
 
 
 
Pre-tax net loss from accumulated other comprehensive income into net periodic pension cost
 
11 
 
 
 
 
Debt allocation
0.25 
0.25 
0.10 
 
 
 
Equity allocation
0.45 
0.70 
0.80 
 
 
 
Allocation to alternative investments
0.15 
0.05 
 
 
 
 
Number of common stock shares included in Plan Assets
 
 
 
Value of common stock shares included in Plan Assets
 
14 
16 
 
16 
 
Minimum discount rate for defined benefit pension plans
 
 
0.023 
 
0.023 
 
Maximum discount rate for defined benefit pension plans
 
 
0.0555 
 
0.0555 
 
Minimum liabilities having a discount rate for obligations
 
 
0.05 
 
0.05 
 
Weighted average discount rate
 
0.053 
0.058 
0.061 
0.058 
 
Increase in projected benefit obligation
 
 
29 
 
 
 
Expected long-term rate of return on plan assets
 
0.0725 
0.08 
0.08 
0.08 
 
Actual annual rate of return on the Company's pension plan assets
 
0.043 
 
 
0.033 
 
Reasonable long-term rate of return
 
0.0725 
 
 
 
 
Portfolio in global assets
0.15 
 
 
 
 
 
Rate of return from targeted portfolio
 
0.0725 
 
 
 
 
Targeted alternative investment in hedge funds, private equity funds and commodities
 
0.15 
 
 
 
 
Present value of unfunded accumulated post-retirement benefit obligation
 
13 
13 
 
13 
 
Contribution to qualified defined-benefit pension plans
 
30 
35 
 
 
 
Payments to participants of unfunded foreign and non-qualified (domestic) defined-benefit pension plans
 
10 
 
 
 
Stockholders' Equity (Details)
In Millions, except Per Share data
3 Months Ended
Dec. 31,
Year Ended
Dec. 31,
2009
2008
2010
2009
2008
Jul. 31, 2007
Accumulated other comprehensive income attributable to Masco Corporation
 
 
 
 
 
 
Accumulated other comprehensive income
366 
 
273 
366 
 
 
Stockholders Equity (Textuals) [Abstract]
 
 
 
 
 
 
Income tax on unrealized (loss) gain on marketable securities
 
 
14 
14 
 
 
Income tax on unrecognized prior service cost and net loss
 
 
105 
105 
 
 
Cash dividends per common share paid
0.075 
0.235 
0.30 
0.46 
0.925 
 
Cash dividends per common share declared
 
 
0.30 
0.30 1
0.93 
 
Grant of long term stock awards
 
 
 
 
 
Repurchase and retirement of common stock to offset the dilutive impact of long term stock awards
 
 
 
Repurchase and retirement of common stock cash aggregate to offset the dilutive effect
 
 
45 
11 
160 
 
Common stock outstanding under repurchase authorization
 
 
27 
 
 
50 
Parent Company [Member]
 
 
 
 
 
 
Accumulated other comprehensive income attributable to Masco Corporation
 
 
 
 
 
 
Cumulative translation adjustments
546 
 
505 
 
 
 
Unrealized gain on marketable securities, net
25 
 
26 
 
 
 
Unrecognized prior service cost and net loss, net
(205)
 
(258)
 
 
 
Accumulated other comprehensive income
366 
 
273 
 
 
 
Segment Information (Details)
In Millions
3 Months Ended
Dec. 31,
Year Ended
Dec. 31,
2010
2009
2010
2009
2008
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
7,592 
7,792 
9,484 
Segment Reporting, Operating Profit (Loss)
 
 
(389)
218 
243 
Segment Reporting, Assets
6,544 
7,604 
6,544 
7,604 
8,168 
General corporate expense, net
 
 
(110)
(140)
(144)
Charge for defined-benefit curtailment
 
 
 
(8)
 
Sgement Litigation Expense
 
 
 
(7)
(9)
Accelerated stock compensation expense
 
 
(6)
 
Loss on corporate fixed assets, net
 
 
 
(2)
 
Operating (loss) profit, as reported
 
 
(499)
55 
90 
Other income (expense), net
 
 
(278)
(206)
(283)
Corporate assets
1,596 
1,571 
1,596 
1,571 
1,315 
Total Assets
8,140 
9,175 
8,140 
9,175 
9,483 
Loss from continuing operations before income taxes
 
 
(777)
(151)
(193)
Segment Reporting, Property Additions
 
 
133 
121 
191 
Segment Reporting, Depreciation and Amortization
 
 
259 
235 
216 
Unallocated amounts, principally related to corporate assets, Property Additions
 
 
Unallocated amounts, principally related to corporate assets, Depreciation and Amortization
 
 
20 
17 
16 
Payments to Acquire Property, Plant, and Equipment
 
 
137 
122 
193 
Depreciation, Depletion and Amortization
 
 
279 
252 
232 
Segment Information (Textuals) [Abstract]
 
 
 
 
 
Export sales from U.S included in net sales
 
 
246 
277 
275 
Intra-company sales between segments in percentage
 
 
0.02 
0.03 
0.01 
Sales to one customer included in net sales
 
 
1,993 
2,053 
2,058 
Net sales from the Company's operations in U.S.
 
 
5,618 
5,952 1
7,150 
Impairment charges for goodwill and other intangible assets
721 
262 
721 
262 
467 
Long-lived assets of Company's operations, Domestic
3,684 
4,628 
3,684 
4,628 
4,887 
Cabinets and Related Products [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
1,464 
1,674 
2,276 
Segment Reporting, Operating Profit (Loss)
 
 
(250)
(64)
Segment Reporting, Assets
 
 
1,108 
1,382 
1,518 
Segment Reporting, Property Additions
 
 
34 
30 
50 
Segment Reporting, Depreciation and Amortization
 
 
112 
84 
70 
Segment Information (Textuals) [Abstract]
 
 
 
 
 
Impairment charges for goodwill and other intangible assets
 
 
 
 
59 
Plumbing Products [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
2,692 
2,564 
3,002 
Segment Reporting, Operating Profit (Loss)
 
 
331 
237 
110 
Segment Reporting, Assets
 
 
1,866 
1,815 
1,877 
Segment Reporting, Property Additions
 
 
65 
47 
72 
Segment Reporting, Depreciation and Amortization
 
 
63 
70 
72 
Segment Information (Textuals) [Abstract]
 
 
 
 
 
Impairment charges for goodwill and other intangible assets
 
 
 
203 
Impairment charges for goodwill
 
 
 
39 
 
Installation and Other Services [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
1,147 
1,256 
1,861 
Segment Reporting, Operating Profit (Loss)
 
 
(834)
(131)
(46)
Segment Reporting, Assets
 
 
1,537 
2,339 
2,454 
Segment Reporting, Property Additions
 
 
30 
45 
Segment Reporting, Depreciation and Amortization
 
 
40 
35 
23 
Segment Information (Textuals) [Abstract]
 
 
 
 
 
Impairment charges for goodwill and other intangible assets
 
 
720 
 
52 
Decorative Architectural Products [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
1,693 
1,714 
1,629 
Segment Reporting, Operating Profit (Loss)
 
 
345 
375 
299 
Segment Reporting, Assets
 
 
851 
871 
878 
Segment Reporting, Property Additions
 
 
14 
Segment Reporting, Depreciation and Amortization
 
 
18 
18 
18 
Other Specialty Products [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
596 
584 
716 
Segment Reporting, Operating Profit (Loss)
 
 
19 
(199)
(124)
Segment Reporting, Assets
 
 
1,182 
1,197 
1,441 
Segment Reporting, Property Additions
 
 
18 
10 
Segment Reporting, Depreciation and Amortization
 
 
26 
28 
33 
Segment Information (Textuals) [Abstract]
 
 
 
 
 
Impairment charges for goodwill and other intangible assets
 
 
 
 
153 
Impairment charges for goodwill
 
 
 
223 
 
North America [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
5,929 
6,135 
7,482 
Segment Reporting, Operating Profit (Loss)
 
 
(543)
93 
493 
Segment Reporting, Assets
 
 
5,063 
6,113 
6,648 
International, principally Europe [Member]
 
 
 
 
 
Company by segment and geographic area
 
 
 
 
 
Segment Reporting, Net Sales
 
 
1,663 
1,657 
2,002 
Segment Reporting, Operating Profit (Loss)
 
 
154 
125 
(250)
Segment Reporting, Assets
 
 
1,481 
1,491 
1,520 
Europe [Member]
 
 
 
 
 
Segment Information (Textuals) [Abstract]
 
 
 
 
 
Long-lived assets of the Company's operations, Foreign
617 
690 
 
 
770 
Other Income (Expense), Net (Details) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Other, net
 
 
 
Income from cash and cash investments
$ 6 
$ 7 
$ 22 
Other interest income
Loss from financial investments, net (Note E)
Other items, net
(9)
17 
(22)
Total other, net
29 
Other Income (Expense), Net (Textuals) [Abstract]
 
 
 
Currency losses included in other items , net
$ (2)
$ 17 
$ (29)
Income Taxes (Details) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
(Loss) income from continuing operations before income taxes:
 
 
 
U.S
$ (964)
$ (301)
$ 4 
Foreign
187 
150 
(197)
Total
(777)
(151)
(193)
Currently payable:
 
 
 
U.S. Federal
(24)
(29)
State and local
22 
12 
20 
Foreign
59 
45 
68 
Deferred:
 
 
 
U.S. Federal
177 
(64)
47 
State and local
(9)
(2)
Foreign
 
(11)
(11)
Income tax expense (benefit)
225 
(49)
134 
Deferred tax assets at December 31:
 
 
 
Receivables
15 
19 
 
Inventories
35 
31 
 
Other assets, including stock-based compensation
119 
135 
 
Accrued liabilities
143 
171 
 
Long-term liabilities
227 
200 
 
Net operating loss carryforward
136 
63 
 
Capital loss carryforward
 
Tax credit carryforward
12 
 
Total
690 
625 
 
Valuation allowance
(462)
(43)
 
Total
228 
582 
 
Deferred tax liabilities at December 31:
 
 
 
Property and equipment
223 
324 
 
Investment in foreign subsidiaries
 
Intangibles
323 
398 
 
Other, principally notes payable
29 
32 
 
Total
575 
763 
 
Net deferred tax liability at December 31
347 
181 
 
Income Taxes (Details 1)
Year Ended
Dec. 31,
2010
2009
2008
Reconciliation of U.S. Federal statutory rate to the provision (benefit) for income taxes on (loss) income from continuing operations
 
 
 
U.S. federal statutory rate
(0.35)
(0.35)
(0.35)
State and local taxes, net of U.S. Federal tax benefit
0.01 
0.04 
0.08 
Lower taxes on foreign earnings
(0.01)
(0.11)
(0.11)
Foreign unrecognized tax benefits
 
(0.05)
 
Change in U.S. and foreign taxes on distributed and undistributed foreign earnings, including the impact of foreign tax credit
 
0.05 
0.35 
Goodwill impairment charges providing no tax benefit
0.17 
0.10 
0.73 
U.S. Federal valuation allowance
0.48 
 
 
Other, net
(0.01)
(0.01)
(0.01)
Effective tax rate
0.29 
(0.33)
0.69 
Income Taxes (Details 2) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
Reconciliation of unrecognized tax benefits, including related interest and penalties
 
 
Unrecognized Tax Benefits, Beginning Balance
$ 65 
$ 81 
Unrecognized Tax Benefits interest and penalties recognized in income tax expense, Beginning balance
21 
25 
Unrecognized tax benefits and income tax penalties and interest accrued, Beginning balance
86 
106 
Unrecognized Tax Benefits, Additions Resulting from Current Period Tax Positions
Unrecognized Tax Benefits, Reductions Resulting from Current Period Tax Positions
 
(1)
Unrecognized Tax Benefits, Additions Resulting from Prior Period Tax Positions
18 
Unrecognized Tax Benefits, Reductions Resulting from Prior Period Tax Positions
(5)
(8)
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities
(3)
(13)
Interest and penalties decrease resulting from settlements with tax authorities
(1)
(3)
Unrecognized tax benefits and income tax penalties and interest accrued decrease resulting from settlements with tax authorities
(4)
(16)
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations
(10)
(6)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense
(1)
Unrecognized Tax Benefits, Ending Balance
71 
65 
Unrecognized Tax Benefits interest and penalties recognized in income tax expense, Ending balance
23 
21 
Unrecognized tax benefits and income tax penalties and interest accrued, Ending balance
$ 94 
$ 86 
Income Taxes (Details Textuals)
In Millions
3 Months Ended
Dec. 31,
Year Ended
Dec. 31,
2010
2009
2010
2009
2008
Income Taxes (Textuals) [Abstract]
 
 
 
 
 
Net short-term deferred tax assets included in prepaid expense and other
50 
203 
50 
203 
 
Net long term deferred tax liability included in deferred income taxes
397 
384 
397 
384 
 
Valuation allowance on net operating loss carryforward and other deferred tax assets
43 
43 
 
Deferred tax assets
228 
582 
228 
582 
 
Net operating loss and tax credit carryforwards With Limited Expiration period Expiration Dates
 
 
between 2019 and 2030 
between 2019 and 2030 
 
Net operating loss and tax credit carryforwards expiring between 2019 and 2030
143 
65 
143 
65 
 
Net operating loss and tax credit carryforwards With Unlimited Expiration period
 
Net operating loss and tax credit carryforwards With Unlimited Expiration period
 
Deferred tax liabilities
575 
763 
575 
763 
 
Deferred tax liabilities on the undistributed earnings of certain foreign subsidiaries
60 
60 
 
Income taxes paid
 
 
47 
25 
117 
Reversed accrual adjustment for unrecognised tax benefits related to withholding tax issue
 
 
(3)
(13)
 
Pre-tax impairment charges for goodwill
 
 
721 
262 
467 
After-tax impairment charges for goodwill
 
 
593 
180 
445 
After-tax impairment charges for goodwill
593 
180 
587 
180 
 
Effective tax rate
 
 
0.32 
(0.37)
(0.33)
Increase in tax expense from valuation allowance
 
 
371 
 
65 
Cumulative effect of adopting accounting guidance regarding accounting for uncertainty in income taxes
 
 
 
 
26 
Unrecognized tax benefits that would impact effective tax rate if recognized
47 
44 
47 
44 
 
Unrecognised tax benefits recorded in deferred income taxes and other
97 
87 
97 
87 
 
Unrecognized tax benefits recorded in accrued liabilities
 
Unrecognised tax benefits recorded in other assets
 
Reduction in the liability for unrecognized tax benefits
 
 
 
Time limits for tax audit closings settlements and expiration of applicable statutes of limitations in various jurisdictions
 
 
12 
 
 
Deferred tax assets expected to be realised
 
 
more than 50 percent 
 
 
Earning Per Common Share (Details) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Numerator (basic and diluted):
 
 
 
Loss from continuing operations
$ (1,043)
$ (140)
$ (366)
Allocation to unvested restricted stock awards
(3)
(3)
(7)
Loss from continuing operations attributable to common shareholders
(1,046)
(143)
(373)
Loss from discontinued operations, net
 
(43)
(25)
Net loss income available to common shareholders
$ (1,046)
$ (186)
$ (398)
Denominator:
 
 
 
Basic common shares (based upon weighted average)
349 
351 
353 
Add:
 
 
 
Contingent common shares
Stock option dilution
Diluted common shares
349 
351 
353 
Earning Per Common Share (Textuals) [Abstract]
 
 
 
Antidilutive effect on computation of diluted earnings per common share
37 
36 
31 
Convertible Debt Securities [Member]
 
 
 
Earning Per Common Share (Textuals) [Abstract]
 
 
 
Antidilutive effect on computation of diluted earnings per common share
Outstanding Stock Awards [Member]
 
 
 
Earning Per Common Share (Textuals) [Abstract]
 
 
 
Antidilutive effect on computation of diluted earnings per common share
10 
 
Other Commitments and Contingencies (Details) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
Warranty liability
 
 
Balance at January 1
$ 109 
$ 119 
Accruals for warranties issued during the year
43 
32 
Accruals related to pre-existing warranties
Settlements made (in cash or kind) during the year
(37)
(44)
Other, net (including currency translation)
(3)
(3)
Balance at end of period
113 
109 
Other Commitments and Contingencies (Textuals) [Abstract]
 
 
Number of additional lawsuits filed on behalf of several of Masco's competitors in insulation installation business
 
Number of insulation installation contractors certified by the federal court in Atlanta
 
377 
Number of additional lawsuits pending
 
Warranty period of company's products and product finishes and services
one year to the life of the product 
 
Additional capital representing company's aggregate capital commitment less capital contributions made
33 
 
Interim Financial Information (Unaudited) (Details) (USD $)
In Millions, except Per Share data
3 Months Ended
Dec. 31, 2010
3 Months Ended
Jun. 30, 2010
3 Months Ended
Dec. 31, 2009
3 Months Ended
Sep. 30, 2009
3 Months Ended
Jun. 30, 2009
3 Months Ended
Mar. 31, 2009
Interim Financial Information (Unaudited)
 
 
 
 
 
 
Net sales
$ 1,735 
$ 2,048 
$ 1,898 
$ 2,084 
$ 2,013 
$ 1,797 
Gross profit
308 
546 
495 
567 
543 
413 
Loss from continuing operations
(1,034)
(173)
51 
67 
(85)
Net loss
(1,034)
(185)
28 
55 
(81)
Basic:
 
 
 
 
 
 
Loss from continuing operations
(2.96)
0.01 
(0.49)
0.14 
0.19 
(0.24)
Net loss
(2.96)
0.01 
(0.53)
0.08 
0.15 
(0.23)
Diluted:
 
 
 
 
 
 
Loss income from continuing operations
(2.96)
0.01 
(0.49)
0.14 
0.19 
(0.24)
Net loss
$ (2.96)
$ 0.01 
$ (0.53)
$ 0.08 
$ 0.15 
$ (0.23)
Interim Financial Information (Unaudited) (Textuals) [Abstract]
 
 
 
 
 
 
Non cash impairment charges for goodwill after tax
593 
 
180 
 
 
 
Non cash impairment charges for goodwill pre-tax
721 
 
262 
 
 
 
Valuation allowance on net US deferred tax assets
371 
 
 
 
 
 
Impairement of Financial Investment before Tax
33 
 
 
Impairement of Financial Investment Net of Tax
21 
 
 
Net (loss) income includes after tax income (loss), net related to discontinued operations
 
 
(12)
(23)
(12)
Net (loss) income, pre-tax income (loss), net related to discontinued operations
 
 
(18)
(24)
(4)
(4)
Valuation and Qualifying Accounts (Details) (USD $)
In Millions
Year Ended
Dec. 31,
2010
2009
2008
Allowance for Doubtful Accounts [Member]
 
 
 
VALUATION AND QUALIFYING ACCOUNTS
 
 
 
Balance at Beginning of Period
$ 75 
$ 75 
$ 85 
Charged to Costs and Expenses
16 
30 
37 
Charged to Other Accounts
(1)
(2)
Deductions
(26)
(29)
(45)
Balance at End of Period
65 
75 
75 
Valuation Allowance of Deferred Tax Assets [Member]
 
 
 
VALUATION AND QUALIFYING ACCOUNTS
 
 
 
Balance at Beginning of Period
43 
15 
Charged to Costs and Expenses
400 
28 
Charged to Other Accounts
19 
Deductions
Balance at End of Period
$ 462 
$ 43 
$ 15