| Debt
|
|
|
|
|
|
|
A. | ACCOUNTING POLICIES |
|
B. | 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 | ) | ||
|
C. | ACQUISITIONS |
|
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 | ||||
|
E. | FAIR VALUE OF FINANCIAL INVESTMENTS AND LIABILITIES |
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 | ) | |||
|
F. | DERIVATIVES |
|
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 | ||||
|
H. | GOODWILL AND OTHER INTANGIBLE ASSETS |
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. |
|
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 | ||||
|
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 | ||||
|
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 | ||||
|
L. | STOCK-BASED COMPENSATION |
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 |
(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. |
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 |
|
M. | EMPLOYEE RETIREMENT PLANS |
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 |
|
N. | SHAREHOLDERS’ EQUITY |
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 | ||||
|
O. | SEGMENT INFORMATION |
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. |
|
P. | OTHER INCOME (EXPENSE), 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 | ||||||
|
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 | ||||||||
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 | ||||||
|
S. | OTHER COMMITMENTS AND CONTINGENCIES |
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 | ||||
|
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 | ) |
|
(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. |
|
|
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 | ) | ||
|
(In Millions) | ||||||||
At December 31 | ||||||||
2010 | 2009 | |||||||
Finished goods
|
$ | 393 | $ | 405 | ||||
Raw material
|
246 | 247 | ||||||
Work in process
|
93 | 91 | ||||||
Total
|
$ | 732 | $ | 743 | ||||
|
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 | ) | |||
|
(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 | ||||
|
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 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 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 | ||||
|
(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 | ||||
|
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 |
|
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 |
|
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 | ||||
|
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 | ||||||||||||
|
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 | ||||||
|
(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 | ||||||
|
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 | ||||
|
(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 | ) |
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