MASCO CORP /DE/, 10-Q filed on 4/26/2016
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2016
Document and Entity Information [Abstract]
 
Entity Registrant Name
MASCO CORP /DE/ 
Entity Central Index Key
0000062996 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Large Accelerated Filer 
Document Type
10-Q 
Document Period End Date
Mar. 31, 2016 
Document Fiscal Year Focus
2016 
Document Fiscal Period Focus
Q1 
Amendment Flag
false 
Entity Common Stock, Shares Outstanding (in shares)
332,746,136 
Entity Current Reporting Status
Yes 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash investments
$ 2,175 
$ 1,468 
Short-term bank deposits
195 
248 
Receivables
1,036 
853 
Prepaid expenses and other
87 
72 
Inventories:
 
 
Finished goods
420 
358 
Raw material
244 
238 
Work in process
91 
91 
Total
755 
687 
Total current assets
4,248 
3,328 
Property and equipment, net
1,040 
1,027 
Goodwill
844 
839 
Other intangible assets, net
158 
160 
Other assets
264 
310 
Total assets
6,554 
5,664 
Current liabilities:
 
 
Notes payable
1,303 
1,004 
Accounts payable
834 
749 
Accrued liabilities
652 
752 
Total current liabilities
2,789 
2,505 
Long-term debt
2,993 
2,403 
Other liabilities
688 
698 
Total liabilities
6,470 
5,606 
Commitments and contingencies
   
   
Masco Corporation’s shareholders’ equity:
 
 
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2016 – 328,700,000 ; 2015 – 330,500,000
329 
330 
Preferred shares authorized: 1,000,000; Issued and outstanding: 2016 and 2015 – None
Paid-in capital
Retained deficit
(310)
(300)
Accumulated other comprehensive loss
(145)
(165)
Total Masco Corporation’s shareholders’ deficit
(126)
(135)
Noncontrolling interest
210 
193 
Total equity
84 
58 
Total liabilities and equity
$ 6,554 
$ 5,664 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Common share, par value (in dollars per share)
$ 1 
$ 1 
Common shares, shares authorized
1,400,000,000 
1,400,000,000 
Common shares, shares issued
328,700,000 
330,500,000 
Common shares, shares outstanding
328,700,000 
330,500,000 
Preferred shares, shares authorized
1,000,000 
1,000,000 
Preferred shares, shares issued
Preferred shares, shares outstanding
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income Statement [Abstract]
 
 
Net sales
$ 1,720 
$ 1,659 
Cost of sales
1,151 
1,164 
Gross profit
569 
495 
Selling, general and administrative expenses
335 
330 
Operating profit
234 
165 
Other income (expense), net:
 
 
Interest expense
(56)
(56)
Other, net
(1)
Total other income (expense), net
(57)
(55)
Income from continuing operations before income taxes
177 
110 
Income tax expense
(58)
(40)
Income from continuing operations
119 
70 
Income from discontinued operations, net
Net income
119 
73 
Less: Net income attributable to noncontrolling interest
10 
Net income attributable to Masco Corporation
109 
64 
Basic:
 
 
Income from continuing operations (in dollars per share)
$ 0.33 
$ 0.17 
Income (loss) from discontinued operations, net (in dollars per share)
$ 0.00 
$ 0.01 
Net income (in dollars per share)
$ 0.33 
$ 0.18 
Diluted:
 
 
Income from continuing operations (in dollars per share)
$ 0.32 
$ 0.17 
Income (loss) from discontinued operations, net (in dollars per share)
$ 0.00 
$ 0.01 
Net income (in dollars per share)
$ 0.32 
$ 0.18 
Amounts attributable to Masco Corporation:
 
 
Income from continuing operations
109 
61 
Income from discontinued operations, net
Net income attributable to Masco Corporation
$ 109 
$ 64 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
Net income
$ 119 
$ 73 
Less: Net income attributable to noncontrolling interest
10 
Net income attributable to Masco Corporation
109 
64 
Other comprehensive income (loss), net of tax
 
 
Cumulative translation adjustment
24 
(96)
Pension and other post-retirement benefits
Other comprehensive income (loss)
27 
(92)
Less: Other comprehensive income (loss) attributable to noncontrolling interest
(23)
Other comprehensive income (loss) attributable to Masco Corporation
20 
(69)
Total comprehensive income (loss)
146 
(19)
Less: Total comprehensive income (loss) attributable to the noncontrolling interest
17 
(14)
Total comprehensive income (loss) attributable to Masco Corporation
$ 129 
$ (5)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
 
 
Cash provided by operations
$ 189 
$ 144 
Increase in receivables
(198)
(244)
Increase in inventories
(63)
(56)
(Decrease) increase in accounts payable and accrued liabilities, net
(28)
Net cash for operating activities
(100)
(152)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
 
 
Purchase of Company common stock
(86)
(103)
Cash dividends paid
(32)
(32)
Issuance of notes, net of issuance costs
889 
497 
Issuance of Company common stock
Excess tax benefit from stock-based compensation
11 
Decrease in debt, net
(2)
Net cash from financing activities
781 
362 
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
 
 
Capital expenditures
(37)
(32)
Acquisition of companies, net of cash acquired
(26)
Proceeds from disposition of:
 
 
Short-term bank deposits
60 
141 
Other financial investments
Property and equipment
Purchases of:
 
 
Short-term bank deposits
(63)
Other, net
(3)
(15)
Net cash from investing activities
20 
11 
Effect of exchange rate changes on cash and cash investments
(26)
CASH AND CASH INVESTMENTS:
 
 
Increase for the period
707 
195 
At January 1
1,468 
1,383 
At March 31
$ 2,175 
$ 1,578 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
In Millions, unless otherwise specified
Total
Common Shares ($1 par value)
Paid-In Capital
Retained Earnings (Deficit)
Accumulated Other Comprehensive Loss
Noncontrolling Interest
Balance at Dec. 31, 2014
$ 1,128 
$ 345 
$ 0 
$ 690 
$ (111)
$ 204 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
Total comprehensive (loss) income
(19)
 
 
64 
(69)
(14)
Shares issued
(5)
(8)
 
 
 
Shares retired:
 
 
 
 
 
 
Repurchased
(106)
(4)
 
(102)
 
 
Surrendered (non-cash)
(16)
(1)
 
(15)
 
 
Cash dividends declared
(31)
 
 
(31)
 
 
Stock-based compensation
 
 
 
 
Balance at Mar. 31, 2015
959 
343 
606 
(180)
190 
Balance at Dec. 31, 2015
58 
330 
(300)
(165)
193 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
Total comprehensive (loss) income
146 
 
 
109 
20 
17 
Shares issued
(6)
(8)
 
 
 
Shares retired:
 
 
 
 
 
 
Repurchased
(86)
(3)
(7)
(76)
 
 
Surrendered (non-cash)
(11)
 
 
(11)
 
 
Cash dividends declared
(32)
 
 
(32)
 
 
Stock-based compensation
15 
 
15 
 
 
 
Balance at Mar. 31, 2016
$ 84 
$ 329 
$ 0 
$ (310)
$ (145)
$ 210 
Accounting Policies
Accounting Policies
ACCOUNTING POLICIES
 
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to present fairly our financial position as at March 31, 2016, and our results of operations, comprehensive income (loss), cash flows and changes in shareholders’ equity for the three months ended March 31, 2016 and 2015.  The condensed consolidated balance sheet at December 31, 2015 was derived from audited financial statements.
 
Reclassification. Certain prior year amounts have been reclassified to conform to the 2016 presentation in the condensed consolidated financial statements. 
 
Recently Issued Accounting Pronouncements.  In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2015-02 (“ASU 2015-02”) “Consolidation (Topic 810) — Amendments to the Consolidations Analysis,” which modifies certain aspects of both the variable interest entities and voting interest entities models. We adopted ASU 2015-02 on January 1, 2016. The adoption of the new standard did not have an impact on our financial position or our results of operations.

In April 2015, the FASB issued Accounting Standards Update 2015‑03 (“ASU 2015‑03”) “Interest - Imputation of Interest (Subtopic 835‑30) - Simplifying the Presentation of Debt Issuance Costs,” that requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB issued ASU 2015‑15 to clarify that debt issuance costs related to line‑of‑credit arrangements may remain classified as an asset. We retrospectively adopted both ASU 2015‑03 and ASU 2015‑15 on January 1, 2016. As a result of the retrospective adoption of the standards, we reclassified $15 million of debt issuance costs from other assets to long-term debt, and $1 million of debt issuance costs from other assets to notes payable, as of December 31, 2015.
In May 2014, the FASB issued a new standard for revenue recognition, Accounting Standards Codification 606 (“ASC 606”).  The purpose of ASC 606 is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability across industries. ASC 606 is effective for us for annual periods beginning January 1, 2018.  We are currently evaluating the impact the adoption of this new standard will have on our results of operations. 

In January 2016, the FASB issued Accounting Standards Update 2016-01 (“ASU 2016-01”), “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for us for annual periods beginning January 1, 2018. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations.

In February 2016, the FASB issued a new standard for leases, Accounting Standards Codification 842 (“ASC 842”), which changes the accounting model of identifying and accounting for leases. ASC 842 is effective for us for annual periods beginning January 1, 2019. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations.
    
In March 2016, the FASB issued Accounting Standard Update 2016-09 (“ASU 2016-09”), “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which requires the tax effects related to share-based payments to be recorded through the income statement and simplifies the accounting requirements for forfeitures and employers' tax withholding requirements. ASU 2016-09 is effective for us for annual periods beginning January 1, 2017. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations.
Discontinued Operations
Discontinued Operations
DISCONTINUED OPERATIONS
 
The presentation of discontinued operations includes a component or group of components that we have or intend to dispose of, and represents a strategic shift that has (or will have) a major effect on our operations and financial results.  For spin off transactions, discontinued operations treatment is appropriate following the completion of the spin off.

On September 30, 2014, we announced a plan to spin off 100 percent of our Installation and Other Services businesses into an independent, publicly-traded company named TopBuild Corp. (“TopBuild”) through a tax-free distribution of the stock of TopBuild to our stockholders.  We initiated the spin off as TopBuild was no longer considered core to our long-term growth strategy in branded building products. We completed the spin off on June 30, 2015 at which time we accounted for it as a discontinued operation. Gains from this discontinued operation were included in income from discontinued operations, net, in the condensed consolidated statement of operations for the three months ended March 31, 2015.
 
The major classes of line items constituting income from discontinued operations, net, in millions:
 
Three Months Ended
March 31,
 
2016
 
2015
Net sales
$

 
$
358

Cost of sales

 
285

Gross profit

 
73

Selling, general and administrative expenses

 
68

Income from discontinued operations
$

 
$
5

Income tax expense 

 
(2
)
Income from discontinued operations, net
$

 
$
3


Other selected financial information for TopBuild during the period owned by us was as follows, in millions:
 
Three Months Ended
March 31,
 
2016
 
2015
Depreciation and amortization
$

 
$
3

Capital expenditures
$

 
$
2

 
In conjunction with the spin off, we entered into a Transition Services Agreement with TopBuild to provide TopBuild administrative services subsequent to the separation.  The fees for services rendered under the Transition Services Agreement are not material to our results of operations.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
GOODWILL AND OTHER INTANGIBLE ASSETS
 
The changes in the carrying amount of goodwill for the three months ended March 31, 2016, by segment, were as follows, in millions: 
 
Gross Goodwill At March 31, 2016
 
Accumulated
Impairment
Losses
 
Net Goodwill At March 31, 2016
Plumbing Products
$
530

 
$
(340
)
 
$
190

Decorative Architectural Products
294

 
(75
)
 
219

Cabinetry Products
240

 
(59
)
 
181

Windows and Other Specialty Products
988

 
(734
)
 
254

Total
$
2,052

 
$
(1,208
)
 
$
844

 
Gross Goodwill At December 31, 2015
 
Accumulated
Impairment
Losses
 
Net Goodwill At December 31, 2015
 
Other(A)
 
Net Goodwill At March 31, 2016
Plumbing Products
$
525

 
$
(340
)
 
$
185

 
$
5

 
$
190

Decorative Architectural Products
294

 
(75
)
 
219

 

 
219

Cabinetry Products
240

 
(59
)
 
181

 

 
181

Windows and Other Specialty Products
988

 
(734
)
 
254

 

 
254

Total
$
2,047

 
$
(1,208
)
 
$
839

 
$
5

 
$
844

 
 
(A)  Other principally includes the effect of foreign currency translation.
 
The carrying value of our other indefinite-lived intangible assets was $137 million at both March 31, 2016 and December 31, 2015, and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $21 million (net of accumulated amortization of $51 million) and $23 million (net of accumulated amortization of $49 million) at March 31, 2016 and December 31, 2015, respectively, and principally included customer relationships.
Depreciation and Amortization
Depreciation and Amortization
DEPRECIATION AND AMORTIZATION
 
Depreciation and amortization expense, including discontinued operations, was $32 million and $34 million for the three months ended March 31, 2016 and 2015, respectively.
Fair Value of Financial Investments
Fair Value of Financial Investments
FAIR VALUE OF FINANCIAL INVESTMENTS
 
We have maintained investments in available-for-sale securities, equity method investments and a number of private equity funds, principally as part of our tax planning strategies, as any gains enhance the utilization of any current and future tax capital losses.  Financial investments were as follows, in millions:
 
March 31, 2016
 
December 31, 2015
Prepaid expenses and other:
 
 
 
Auction rate securities
$
12

 
$

 
 
 
 
Other assets:
 
 
 
Auction rate securities
10

 
22

Equity method investments
13

 
13

Private equity funds
9

 
10

Other investments
3

 
3

Total
$
47

 
$
48


 
    
E. FAIR VALUE OF FINANCIAL INVESTMENTS (Concluded)

Recurring Fair Value Measurements.  Our auction rate securities are measured at fair value on a recurring basis, and have been estimated 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 the assumptions for credit defaults, since the auction rate securities are backed by credit default swap agreements.
 
Our investments in auction rate securities included cost basis of $19 million and pre-tax unrealized gains of $3 million and had a recorded basis of $22 million at both March 31, 2016 and December 31, 2015.
 
Non-Recurring Fair Value Measurements.  During the three months ended March 31, 2016 and 2015, we did not measure any financial investments at fair value on a non-recurring basis, as there was no other-than-temporary decline in the estimated value of these investments.
 
We did not have any transfers between Level 1 and Level 2 financial assets in the three months ended March 31, 2016 or 2015.
    
Realized Gains (Losses).  Income from financial investments, net, included in other, net, within other income (expense), net, was as follows, in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Realized gains from private equity funds
$

 
$
2

Equity investment income, net
1

 

Total income from financial investments, net
$
1

 
$
2


 
Fair Value of Debt.  The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues or the current rates available to us for debt with similar terms and remaining maturities.  The aggregate estimated market value of short-term and long-term debt at March 31, 2016 was approximately $4.6 billion, compared with the aggregate carrying value of $4.3 billion.  The aggregate estimated market value of short-term and long-term debt at December 31, 2015 was approximately $3.6 billion, compared with the aggregate carrying value of $3.4 billion.
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
INSTRUMENTS AND HEDGING ACTIVITIES
 
We are exposed to global market risk as part of our normal daily business activities.  To manage these risks, we enter into various derivative contracts.  These contracts include interest rate swap agreements, foreign currency contracts and metals contracts intended to hedge our exposure to copper and zinc. We review our hedging program, derivative positions and overall risk management on a regular basis.
 
Interest Rate Swap Agreements.  In 2012, in connection with the issuance of $400 million of debt, we terminated the interest rate swap hedge relationships that we had entered into in 2011.  These interest rate swaps were designated as cash flow hedges and effectively fixed interest rates on the forecasted debt issuance to variable rates based on 3-month LIBOR.  Upon termination, the ineffective portion of the cash flow hedges of an approximate $2 million loss was recognized in our consolidated statement of operations in other, net within other income (expense), net.  The remaining loss of approximately $23 million from the termination of these swaps is being amortized as an increase to interest expense over the remaining term of the debt, through March 2022.
 
Foreign Currency Contracts.  Our net cash inflows and outflows exposed to the risk of changes in foreign currency exchange rates arise from the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt and other payables, and investments in subsidiaries.  To mitigate this risk, we, including certain of our European operations, entered into foreign currency forward contracts and foreign currency exchange contracts.
F. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Concluded)

Gains (losses) related to foreign currency forward and exchange contracts are recorded in our condensed consolidated statements of operations in other, net, within other income (expense), net.  In the event that the counterparties fail to meet the terms of the foreign currency forward or exchange contracts, our exposure is limited to the aggregate foreign currency rate differential with such institutions.

Metals Contracts.  We have entered into several contracts to manage our exposure to increases in the price of copper and zinc.  Gains (losses) related to these contracts are recorded in our condensed consolidated statements of operations in cost of sales.
 
The pre-tax gains (losses) included in our condensed consolidated statements of operations are as follows, in millions:
 
Three Months Ended
March 31,
 
2016
 
2015
Foreign currency contracts:
 

 
 

Exchange contracts
$

 
$
4

Forward contracts

 
(4
)
Metal contracts
2

 
(2
)
Total gain (loss)
$
2

 
$
(2
)


We present our derivatives net by counterparty, due to the right of offset under master netting arrangements, in the condensed consolidated balance sheets.  The notional amounts being hedged and the fair value of those derivative instruments are as follows, in millions:
 
At March 31, 2016
 
Notional
Amount
 
Balance Sheet
Foreign currency contracts:
 

 
 

Exchange contracts
$
27

 
 

Receivables
 

 
$
1

Forward contracts
26

 
 

Accrued liabilities
 

 
(1
)
Other liabilities
 
 
(2
)
Metals contracts
38

 
 

Accrued liabilities
 

 
(6
)
 
At December 31, 2015
 
Notional
Amount
 
Balance Sheet
Foreign currency contracts:
 

 
 

Exchange contracts
$
39

 
 

Receivables
 

 
$
1

Forward contracts
30

 
 

Accrued liabilities
 

 
(2
)
Other liabilities
 

 
(1
)
Metals contracts
50

 
 

Accrued liabilities
 

 
(10
)

 
The fair value of all foreign currency and metals derivative contracts is estimated on a recurring basis, quarterly, using Level 2 inputs (significant other observable inputs).
Warranty Liability
Warranty Liability
WARRANTY LIABILITY
 
Changes in our warranty liability were as follows, in millions: 
 
Three Months Ended
March 31, 2016
 
Twelve Months Ended December 31, 2015
Balance at January 1
$
152

 
$
135

Accruals for warranties issued during the period
13

 
56

Accruals related to pre-existing warranties

 
15

Settlements made (in cash or kind) during the period
(13
)
 
(50
)
Other, net (including currency translation)

 
(4
)
Balance at end of period
$
152

 
$
152

Debt
Debt
DEBT

On March 17, 2016, we issued $400 million of 3.5% Notes due April 1, 2021 and $500 million of 4.375% Notes due April 1, 2026. We received proceeds of $896 million, net of discount, for the issuance of these Notes. The Notes are senior indebtedness and are redeemable at our option at the applicable redemption price. On April 15, 2016, proceeds from the debt issuances, together with cash on hand, were used to repay and early retire all of our $1 billion, 6.125% Notes which were due on October 3, 2016 and all of our $300 million, 5.85% Notes which were due on March 15, 2017. In connection with these early retirements, in April 2016 we recorded $40 million of additional interest expense in connection with the discharge of indebtedness.
On March 28, 2013, we entered into a credit agreement (the “Credit Agreement”) with a bank group, with an aggregate commitment of $1.25 billion and a maturity date of March 28, 2018.  On May 29, 2015 and August 28, 2015, we amended the Credit Agreement with the bank group (the “Amended Credit Agreement”).  The Amended Credit Agreement reduced the aggregate commitment to $750 million and extends the maturity date to May 29, 2020.  Under the Amended Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $375 million with the current bank group or new lenders.

The Amended Credit Agreement provides for an unsecured revolving credit facility available to us and one of our 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. We can also borrow swingline loans up to $75 million and obtain letters of credit of up to $100 million; any outstanding letters of credit under the Amended Credit Agreement reduce our borrowing capacity. At March 31, 2016, we had $1.5 million of outstanding standby letters of credit under the Amended Credit Agreement.

Revolving credit loans bear interest under the Amended Credit Agreement, at our option, at (A) a rate per annum equal to the greatest of (i) the 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 our then-applicable corporate credit ratings; or (B) LIBOR plus an applicable margin based upon our then-applicable corporate credit ratings. The foreign currency revolving credit loans bear interest at a rate equal to LIBOR plus an applicable margin based upon our then-applicable corporate credit ratings.

The Amended Credit Agreement contains financial covenants requiring us to maintain (A) a maximum net leverage ratio, as adjusted for certain items, of 4.0 to 1.0, and (B) a minimum interest coverage ratio, as adjusted for certain items, equal to or greater than 2.5 to 1.0.

In order for us to borrow under the Amended Credit Agreement, there must not be any default in our covenants in the Amended 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 our representations and warranties in the Amended 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, 2014, in each case, no material ERISA or environmental non-compliance, and no material tax deficiency). We were in compliance with all covenants and had no borrowing under the Amended Credit Agreement at March 31, 2016.
Stock-Based Compensation
Stock-Based Compensation
STOCK-BASED COMPENSATION
 
Our 2014 Long Term Stock Incentive Plan (the “2014 Plan”) provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors.  At March 31, 2016, 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 and the related income tax benefit for these stock-based incentives were as follows, in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Long-term stock awards
$
5

 
$
6

Stock options
1

 
1

Phantom stock awards and stock appreciation rights
3

 
3

Total
$
9

 
$
10

Income tax benefit (37 percent tax rate)
$
3

 
$
4


 
Long-Term Stock Awards.  Long-term stock awards are granted to our key employees and non-employee Directors and do not cause net share dilution inasmuch as we continue the practice of repurchasing and retiring an equal number of shares in the open market.  We granted 1,013,480 shares of long-term stock awards in the three months ended March 31, 2016.

Our long-term stock award activity was as follows, shares in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Unvested stock award shares at January 1
5

 
6

Weighted average grant date fair value
$
17

 
$
18

 
 
 
 
Stock award shares granted
1

 
1

Weighted average grant date fair value
$
26

 
$
26

 
 
 
 
Stock award shares vested
2

 
2

Weighted average grant date fair value
$
16

 
$
17

 
 
 
 
Stock award shares forfeited

 

Weighted average grant date fair value
$
19

 
$
19

 
 
 
 
Unvested stock award shares at March 31
4

 
5

Weighted average grant date fair value
$
20

 
$
19


At March 31, 2016 and 2015, there was $62 million and $68 million, respectively, of total unrecognized compensation expense related to unvested stock awards; such awards had a weighted average remaining vesting period of 4 years at March 31, 2016 and 3 years at March 31, 2015.
 
The total market value (at the vesting date) of stock award shares which vested during the three months ended March 31, 2016 and 2015 was $36 million and $48 million, respectively.
 
Stock Options.  Stock options are granted to our key employees.  The exercise price equals the market price of our 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.
 
We granted 474,500 of stock option shares in the three months ended March 31, 2016 with a grant date exercise price approximating $26 per share. In the three months ended March 31, 2016, no stock option shares were forfeited (including options that expired unexercised).
I. STOCK-BASED COMPENSATION (Continued)

Our stock option activity was as follows, shares in millions: 
 
 
Three Months Ended
March 31,
 
 
2016
 
 
2015
Option shares outstanding, January 1
 
12

 
 
18

Weighted average exercise price (A)
$
17

 
$
21

 
 
 
 
 
 
Option shares granted
 

 
 

Weighted average exercise price
$
26

 
$
26

 
 
 
 
 
 
Option shares exercised
 
1

 
 
1

Aggregate intrinsic value on date of exercise (B) 
$
18 million

 
$
17 million

Weighted average exercise price
$
18

 
$
14

 
 
 
 
 
 
Option shares forfeited
 

 
 

Weighted average exercise price
$

 
$
22

 
 
 
 
 
 
Option shares outstanding, March 31
 
11

 
 
17

Weighted average exercise price (A)
$
18

 
$
22

Weighted average remaining option term (in years)
 
4

 
 
3

 
 
 
 
 
 
Option shares vested and expected to vest, March 31
 
11

 
 
17

Weighted average exercise price (A)
$
18

 
$
22

Aggregate intrinsic value (B) 
$
154 million

 
$
108 million

Weighted average remaining option term (in years)
 
4

 
 
3

 
 
 
 
 
 
Option shares exercisable (vested), March 31
 
10

 
 
15

Weighted average exercise price (A)
$
17

 
$
22

Aggregate intrinsic value (B) 
$
138 million

 
$
94 million

Weighted average remaining option term (in years)
 
3

 
 
3

 
 
(A)
Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee directors such that all individuals received an equivalent fair value both before and after the separation.  The modification contributed to the lower exercise price.
(B)
Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price) multiplied by the number of share.

At March 31, 2016 and 2015, there was $8 million and $9 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 3 years at both March 31, 2016 and 2015.
I. STOCK-BASED COMPENSATION (Concluded)

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 were as follows: 
 
Three Months Ended
March 31,
 
2016
 
2015
Weighted average grant date fair value
$
6.43

 
$
9.67

Risk-free interest rate
1.41
%
 
1.75
%
Dividend yield
1.49
%
 
1.32
%
Volatility factor
29.00
%
 
42.00
%
Expected option life
6 years

 
6 years

Employee Retirement Plans
Employee Retirement Plans
EMPLOYEE RETIREMENT PLANS
 
Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 
 
Three Months Ended March 31,
 
2016
 
2015
 
Qualified
 
Non-Qualified
 
Qualified
 
Non-Qualified
Service cost
$
1

 
$

 
$
1

 
$

Interest cost
11

 
1

 
12

 
1

Expected return on plan assets
(10
)
 

 
(11
)
 

Amortization of net loss
4

 
1

 
4

 
1

Net periodic pension cost
$
6

 
$
2

 
$
6

 
$
2


We froze all future benefit accruals under substantially all of our domestic qualified and foreign and domestic non-qualified defined benefit pension plans several years ago.
Reclassifications From Accumulated Other Comprehensive Loss
Reclassifications From Accumulated Other Comprehensive Income
RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE LOSS
 
The reclassifications from accumulated other comprehensive loss to the condensed consolidated statements of operations were as follows, in millions: 
 
 
Amounts Reclassified
 
 
Accumulated Other
Comprehensive Loss
 
Three Months Ended
March 31,
 
Statement of Operations Line Item
 
2016
 
2015
 
Amortization of defined benefit pension and other postretirement benefits:
 
 

 
 

 
 
Actuarial losses, net
 
$
5

 
$
5

 
Selling, general and administrative expenses
Tax (benefit)
 
(2
)
 
(1
)
 
 
Net of tax
 
$
3

 
$
4

 
 
Segment Information
Segment Information
SEGMENT INFORMATION
 
Information by segment and geographic area was as follows, in millions: 
 
Three Months Ended March 31,
 
2016
 
2015
 
2016
 
2015
 
Net Sales(A)
 
Operating Profit (Loss)
Our operations by segment were (B):
 

 
 

 
 

 
 

Plumbing Products
$
813

 
$
796

 
$
129

 
$
111

Decorative Architectural Products
493

 
451

 
105

 
83

Cabinetry Products
236

 
249

 
24


(4
)
Windows and Other Specialty Products
178

 
163

 
3

 
6

Total
$
1,720

 
$
1,659

 
$
261

 
$
196

Our operations by geographic area were:
 

 
 

 
 

 
 

North America
$
1,350

 
$
1,282

 
$
215

 
$
151

International, principally Europe
370

 
377

 
46

 
45

Total
$
1,720

 
$
1,659

 
261

 
196

General corporate expense, net
 

 
 

 
(27
)
 
(31
)
Operating profit
 

 
 

 
234

 
165

Other income (expense), net
 

 
 

 
(57
)
 
(55
)
Income from continuing operations before income taxes
 

 
 

 
$
177

 
$
110

 
 
(A)
Inter-segment sales were not material.
(B)
In Q1 2016, we renamed our Cabinetry Products and Windows and Other Specialty Products segments. The name change did not impact the review of financial information by our corporate operating executive or the composition of the segments.
Severance Costs
Severance Costs
SEVERANCE COSTS
 
We recorded charges related to severance of $2 million and $6 million for the three months ended March 31, 2016 and 2015, respectively. Such charges are principally reflected in the condensed consolidated statements of operations in selling, general and administrative expenses.
Other Income (Expense), Net
Other Income (Expense), Net
OTHER INCOME (EXPENSE), NET
 
Other, net, which is included in other income (expense), net, was as follows, in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Income from cash and cash investments
$
1

 
$

Income from financial investments, net (Note E)
1

 
2

Foreign currency transaction losses

 
(1
)
Other items, net
(3
)
 

Total other, net
$
(1
)
 
$
1

Earnings Per Common Share
Earnings Per Common Share
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: 
 
Three Months Ended
March 31,
 
2016
 
2015
Numerator (basic and diluted):
 

 
 

Income from continuing operations
$
109

 
$
61

Less: Allocation to unvested restricted stock awards
1

 
1

Income from continuing operations attributable to common shareholders
108

 
60

 
 
 
 
Income from discontinued operations, net

 
3

Less: Allocation to unvested restricted stock awards

 

Income from discontinued operations attributable to common shareholders

 
3

 
 
 
 
Net income available to common shareholders
$
108

 
$
63

 
 
 
 
Denominator:
 

 
 

Basic common shares (based upon weighted average)
330

 
344

Add: Stock option dilution
3

 
3

Diluted common shares
333

 
347


 
For the three months ended March 31, 2016 and 2015, we allocated dividends and undistributed earnings to the unvested restricted stock awards.
 
Additionally, 1 million and 8 million common shares for the three months ended March 31, 2016 and 2015, respectively, related to stock options were excluded from the computation of diluted earnings per common share due to their antidilutive effect.

On September 30, 2014, we announced that our Board of Directors authorized the repurchase of up to 50 million shares for retirement of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2007. In the first three months of 2016, we repurchased and retired 3.2 million shares of our common stock (including 1.0 million shares to offset the dilutive impact of long-term stock awards granted in the first quarter), for approximately $86 million. At March 31, 2016, we had 24.6 million shares remaining under the authorization.

On the basis of amounts paid (declared), cash dividends per common share were $0.095 ($0.095) and $0.090 ($0.090) for the three months ended March 31, 2016 and 2015, respectively.
Other Commitments and Contingencies
Other Commitments and Contingencies
OTHER COMMITMENTS AND CONTINGENCIES
 
We are subject to claims, charges, litigation and other proceedings in the ordinary course of our business, including those arising from or related to contractual matters, intellectual property, personal injury, environmental matters, product liability, product recalls, construction defect, insurance coverage, personnel and employment disputes, anti-trust issues and other matters, including class actions.  We believe we have adequate defenses in these matters and that the likelihood that the outcome of these matters would have a material adverse effect on us is remote.  However, there is no assurance that we will prevail in these matters, and we could, in the future, incur judgments, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations.
Income Taxes
Income Taxes
INCOME TAXES
 
Our effective tax rate was 33 percent and 36 percent for the three months ended March 31, 2016 and 2015, respectively.  The 2016 tax rate includes a $4 million state income tax benefit on uncertain tax positions resulting from the expiration of applicable statutes of limitation and the tax benefit of the domestic production deduction which allows a deduction for certain qualified production activities within the U.S.
Accounting Policies (Policies)
Reclassification. Certain prior year amounts have been reclassified to conform to the 2016 presentation in the condensed consolidated financial statements. 
Recently Issued Accounting Pronouncements.  In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2015-02 (“ASU 2015-02”) “Consolidation (Topic 810) — Amendments to the Consolidations Analysis,” which modifies certain aspects of both the variable interest entities and voting interest entities models. We adopted ASU 2015-02 on January 1, 2016. The adoption of the new standard did not have an impact on our financial position or our results of operations.

In April 2015, the FASB issued Accounting Standards Update 2015‑03 (“ASU 2015‑03”) “Interest - Imputation of Interest (Subtopic 835‑30) - Simplifying the Presentation of Debt Issuance Costs,” that requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB issued ASU 2015‑15 to clarify that debt issuance costs related to line‑of‑credit arrangements may remain classified as an asset. We retrospectively adopted both ASU 2015‑03 and ASU 2015‑15 on January 1, 2016. As a result of the retrospective adoption of the standards, we reclassified $15 million of debt issuance costs from other assets to long-term debt, and $1 million of debt issuance costs from other assets to notes payable, as of December 31, 2015.
In May 2014, the FASB issued a new standard for revenue recognition, Accounting Standards Codification 606 (“ASC 606”).  The purpose of ASC 606 is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability across industries. ASC 606 is effective for us for annual periods beginning January 1, 2018.  We are currently evaluating the impact the adoption of this new standard will have on our results of operations. 

In January 2016, the FASB issued Accounting Standards Update 2016-01 (“ASU 2016-01”), “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”, which primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for us for annual periods beginning January 1, 2018. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations.

In February 2016, the FASB issued a new standard for leases, Accounting Standards Codification 842 (“ASC 842”), which changes the accounting model of identifying and accounting for leases. ASC 842 is effective for us for annual periods beginning January 1, 2019. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations.
    
In March 2016, the FASB issued Accounting Standard Update 2016-09 (“ASU 2016-09”), “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which requires the tax effects related to share-based payments to be recorded through the income statement and simplifies the accounting requirements for forfeitures and employers' tax withholding requirements. ASU 2016-09 is effective for us for annual periods beginning January 1, 2017. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations.
Discontinued Operations (Tables)
Schedules of major classes of line items constituting pre-tax profit (loss) of discontinued operations, carrying amount of major classes of assets and liabilities, and other selected financial information during the period owned
The major classes of line items constituting income from discontinued operations, net, in millions:
 
Three Months Ended
March 31,
 
2016
 
2015
Net sales
$

 
$
358

Cost of sales

 
285

Gross profit

 
73

Selling, general and administrative expenses

 
68

Income from discontinued operations
$

 
$
5

Income tax expense 

 
(2
)
Income from discontinued operations, net
$

 
$
3


Other selected financial information for TopBuild during the period owned by us was as follows, in millions:
 
Three Months Ended
March 31,
 
2016
 
2015
Depreciation and amortization
$

 
$
3

Capital expenditures
$

 
$
2

Goodwill and Other Intangible Assets (Tables)
Schedule of changes in carrying amount of goodwill
The changes in the carrying amount of goodwill for the three months ended March 31, 2016, by segment, were as follows, in millions: 
 
Gross Goodwill At March 31, 2016
 
Accumulated
Impairment
Losses
 
Net Goodwill At March 31, 2016
Plumbing Products
$
530

 
$
(340
)
 
$
190

Decorative Architectural Products
294

 
(75
)
 
219

Cabinetry Products
240

 
(59
)
 
181

Windows and Other Specialty Products
988

 
(734
)
 
254

Total
$
2,052

 
$
(1,208
)
 
$
844

 
Gross Goodwill At December 31, 2015
 
Accumulated
Impairment
Losses
 
Net Goodwill At December 31, 2015
 
Other(A)
 
Net Goodwill At March 31, 2016
Plumbing Products
$
525

 
$
(340
)
 
$
185

 
$
5

 
$
190

Decorative Architectural Products
294

 
(75
)
 
219

 

 
219

Cabinetry Products
240

 
(59
)
 
181

 

 
181

Windows and Other Specialty Products
988

 
(734
)
 
254

 

 
254

Total
$
2,047

 
$
(1,208
)
 
$
839

 
$
5

 
$
844

 
 
(A)  Other principally includes the effect of foreign currency translation.
Fair Value of Financial Investments (Tables)
Financial investments were as follows, in millions:
 
March 31, 2016
 
December 31, 2015
Prepaid expenses and other:
 
 
 
Auction rate securities
$
12

 
$

 
 
 
 
Other assets:
 
 
 
Auction rate securities
10

 
22

Equity method investments
13

 
13

Private equity funds
9

 
10

Other investments
3

 
3

Total
$
47

 
$
48

Income from financial investments, net, included in other, net, within other income (expense), net, was as follows, in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Realized gains from private equity funds
$

 
$
2

Equity investment income, net
1

 

Total income from financial investments, net
$
1

 
$
2

Derivative Instruments and Hedging Activities (Tables)
The pre-tax gains (losses) included in our condensed consolidated statements of operations are as follows, in millions:
 
Three Months Ended
March 31,
 
2016
 
2015
Foreign currency contracts:
 

 
 

Exchange contracts
$

 
$
4

Forward contracts

 
(4
)
Metal contracts
2

 
(2
)
Total gain (loss)
$
2

 
$
(2
)
The notional amounts being hedged and the fair value of those derivative instruments are as follows, in millions:
 
At March 31, 2016
 
Notional
Amount
 
Balance Sheet
Foreign currency contracts:
 

 
 

Exchange contracts
$
27

 
 

Receivables
 

 
$
1

Forward contracts
26

 
 

Accrued liabilities
 

 
(1
)
Other liabilities
 
 
(2
)
Metals contracts
38

 
 

Accrued liabilities
 

 
(6
)
 
At December 31, 2015
 
Notional
Amount
 
Balance Sheet
Foreign currency contracts:
 

 
 

Exchange contracts
$
39

 
 

Receivables
 

 
$
1

Forward contracts
30

 
 

Accrued liabilities
 

 
(2
)
Other liabilities
 

 
(1
)
Metals contracts
50

 
 

Accrued liabilities
 

 
(10
)
Warranty Liability (Tables)
Schedule of changes in the Company's warranty liability
Changes in our warranty liability were as follows, in millions: 
 
Three Months Ended
March 31, 2016
 
Twelve Months Ended December 31, 2015
Balance at January 1
$
152

 
$
135

Accruals for warranties issued during the period
13

 
56

Accruals related to pre-existing warranties

 
15

Settlements made (in cash or kind) during the period
(13
)
 
(50
)
Other, net (including currency translation)

 
(4
)
Balance at end of period
$
152

 
$
152

Stock-Based Compensation (Tables)
Pre-tax compensation expense and the related income tax benefit for these stock-based incentives were as follows, in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Long-term stock awards
$
5

 
$
6

Stock options
1

 
1

Phantom stock awards and stock appreciation rights
3

 
3

Total
$
9

 
$
10

Income tax benefit (37 percent tax rate)
$
3

 
$
4

Our long-term stock award activity was as follows, shares in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Unvested stock award shares at January 1
5

 
6

Weighted average grant date fair value
$
17

 
$
18

 
 
 
 
Stock award shares granted
1

 
1

Weighted average grant date fair value
$
26

 
$
26

 
 
 
 
Stock award shares vested
2

 
2

Weighted average grant date fair value
$
16

 
$
17

 
 
 
 
Stock award shares forfeited

 

Weighted average grant date fair value
$
19

 
$
19

 
 
 
 
Unvested stock award shares at March 31
4

 
5

Weighted average grant date fair value
$
20

 
$
19


Our stock option activity was as follows, shares in millions: 
 
 
Three Months Ended
March 31,
 
 
2016
 
 
2015
Option shares outstanding, January 1
 
12

 
 
18

Weighted average exercise price (A)
$
17

 
$
21

 
 
 
 
 
 
Option shares granted
 

 
 

Weighted average exercise price
$
26

 
$
26

 
 
 
 
 
 
Option shares exercised
 
1

 
 
1

Aggregate intrinsic value on date of exercise (B) 
$
18 million

 
$
17 million

Weighted average exercise price
$
18

 
$
14

 
 
 
 
 
 
Option shares forfeited
 

 
 

Weighted average exercise price
$

 
$
22

 
 
 
 
 
 
Option shares outstanding, March 31
 
11

 
 
17

Weighted average exercise price (A)
$
18

 
$
22

Weighted average remaining option term (in years)
 
4

 
 
3

 
 
 
 
 
 
Option shares vested and expected to vest, March 31
 
11

 
 
17

Weighted average exercise price (A)
$
18

 
$
22

Aggregate intrinsic value (B) 
$
154 million

 
$
108 million

Weighted average remaining option term (in years)
 
4

 
 
3

 
 
 
 
 
 
Option shares exercisable (vested), March 31
 
10

 
 
15

Weighted average exercise price (A)
$
17

 
$
22

Aggregate intrinsic value (B) 
$
138 million

 
$
94 million

Weighted average remaining option term (in years)
 
3

 
 
3

 
 
(A)
Subsequent to the separation of TopBuild, we modified our outstanding equity awards to employees and non-employee directors such that all individuals received an equivalent fair value both before and after the separation.  The modification contributed to the lower exercise price.
(B)
Aggregate intrinsic value is calculated using our stock price at each respective date, less the exercise price (grant date price) multiplied by the number of share.

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 were as follows: 
 
Three Months Ended
March 31,
 
2016
 
2015
Weighted average grant date fair value
$
6.43

 
$
9.67

Risk-free interest rate
1.41
%
 
1.75
%
Dividend yield
1.49
%
 
1.32
%
Volatility factor
29.00
%
 
42.00
%
Expected option life
6 years

 
6 years

Employee Retirement Plans (Tables)
Schedule of net periodic pension cost for the Company's defined-benefit pension plans
Net periodic pension cost for our defined-benefit pension plans was as follows, in millions: 
 
Three Months Ended March 31,
 
2016
 
2015
 
Qualified
 
Non-Qualified
 
Qualified
 
Non-Qualified
Service cost
$
1

 
$

 
$
1

 
$

Interest cost
11

 
1

 
12

 
1

Expected return on plan assets
(10
)
 

 
(11
)
 

Amortization of net loss
4

 
1

 
4

 
1

Net periodic pension cost
$
6

 
$
2

 
$
6

 
$
2


Reclassifications From Accumulated Other Comprehensive Loss (Tables)
Schedule of reclassifications from accumulated other comprehensive (loss) income to the condensed consolidated statements of operations
The reclassifications from accumulated other comprehensive loss to the condensed consolidated statements of operations were as follows, in millions: 
 
 
Amounts Reclassified
 
 
Accumulated Other
Comprehensive Loss
 
Three Months Ended
March 31,
 
Statement of Operations Line Item
 
2016
 
2015
 
Amortization of defined benefit pension and other postretirement benefits:
 
 

 
 

 
 
Actuarial losses, net
 
$
5

 
$
5

 
Selling, general and administrative expenses
Tax (benefit)
 
(2
)
 
(1
)
 
 
Net of tax
 
$
3

 
$
4

 
 
Segment Information (Tables)
Schedule of information by segment and geographic area
Information by segment and geographic area was as follows, in millions: 
 
Three Months Ended March 31,
 
2016
 
2015
 
2016
 
2015
 
Net Sales(A)
 
Operating Profit (Loss)
Our operations by segment were (B):
 

 
 

 
 

 
 

Plumbing Products
$
813

 
$
796

 
$
129

 
$
111

Decorative Architectural Products
493

 
451

 
105

 
83

Cabinetry Products
236

 
249

 
24


(4
)
Windows and Other Specialty Products
178

 
163

 
3

 
6

Total
$
1,720

 
$
1,659

 
$
261

 
$
196

Our operations by geographic area were:
 

 
 

 
 

 
 

North America
$
1,350

 
$
1,282

 
$
215

 
$
151

International, principally Europe
370

 
377

 
46

 
45

Total
$
1,720

 
$
1,659

 
261

 
196

General corporate expense, net
 

 
 

 
(27
)
 
(31
)
Operating profit
 

 
 

 
234

 
165

Other income (expense), net
 

 
 

 
(57
)
 
(55
)
Income from continuing operations before income taxes
 

 
 

 
$
177

 
$
110

 
 
(A)
Inter-segment sales were not material.
(B)
In Q1 2016, we renamed our Cabinetry Products and Windows and Other Specialty Products segments. The name change did not impact the review of financial information by our corporate operating executive or the composition of the segments.
Other Income (Expense), Net (Tables)
Schedule of components of other, net, which is included in other income (expense), net
Other, net, which is included in other income (expense), net, was as follows, in millions: 
 
Three Months Ended
March 31,
 
2016
 
2015
Income from cash and cash investments
$
1

 
$

Income from financial investments, net (Note E)
1

 
2

Foreign currency transaction losses

 
(1
)
Other items, net
(3
)
 

Total other, net
$
(1
)
 
$
1

Earnings Per Common Share (Tables)
Schedule of reconciliations of the numerators and denominators used in the computations of basic and diluted 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: 
 
Three Months Ended
March 31,
 
2016
 
2015
Numerator (basic and diluted):
 

 
 

Income from continuing operations
$
109

 
$
61

Less: Allocation to unvested restricted stock awards
1

 
1

Income from continuing operations attributable to common shareholders
108

 
60

 
 
 
 
Income from discontinued operations, net

 
3

Less: Allocation to unvested restricted stock awards

 

Income from discontinued operations attributable to common shareholders

 
3

 
 
 
 
Net income available to common shareholders
$
108

 
$
63

 
 
 
 
Denominator:
 

 
 

Basic common shares (based upon weighted average)
330

 
344

Add: Stock option dilution
3

 
3

Diluted common shares
333

 
347

Accounting Policies - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Adjustment for Reclassifying Issuance Costs Other Assets to Long Term Debt |
Long term debt
 
Debt Instrument [Line Items]
 
Reclassification of issuance costs
$ (15)
Adjustment for Reclassifying Issuance Costs Other Assets to Long Term Debt |
Other assets
 
Debt Instrument [Line Items]
 
Reclassification of issuance costs
15 
Adjustment for Reclassifying Issuance costs from Other Assets to Notes Payable |
Other assets
 
Debt Instrument [Line Items]
 
Reclassification of issuance costs
Adjustment for Reclassifying Issuance costs from Other Assets to Notes Payable |
Notes payable
 
Debt Instrument [Line Items]
 
Reclassification of issuance costs
$ (1)
Discontinued Operations (Details) (Spinoff, TopBuild, Installation and Other Services)
0 Months Ended
Sep. 30, 2014
Spinoff |
TopBuild |
Installation and Other Services
 
Selected financial information of discontinued operations
 
Percentage of businesses planned for spinoff
100.00% 
Discontinued Operations - Income Statement Line Items (Details) (Spinoff, TopBuild, USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Spinoff |
TopBuild
 
 
Pre-tax profit (Loss) of discontinued operations
 
 
Net sales
$ 0 
$ 358 
Cost of sales
285 
Gross profit
73 
Selling, general and administrative expenses
68 
Income from discontinued operations
Income tax expense
(2)
Income from discontinued operations, net
$ 0 
$ 3 
Discontinued Operations - Other Financial Information (Details) (Spinoff, TopBuild, USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Spinoff |
TopBuild
 
 
Selected financial information of discontinued operations
 
 
Depreciation and amortization
$ 0 
$ 3 
Capital expenditures
$ 0 
$ 2 
Goodwill and Other Intangible Assets - Goodwill Rollforward (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Goodwill [Roll Forward]
 
 
Goodwill, Gross
$ 2,052 
$ 2,047 
Accumulated Impairment Losses
(1,208)
(1,208)
Beginning balance
839 
 
Other
 
Ending balance
844 
 
Plumbing Products
 
 
Goodwill [Roll Forward]
 
 
Goodwill, Gross
530 
525 
Accumulated Impairment Losses
(340)
(340)
Beginning balance
185 
 
Other
 
Ending balance
190 
 
Decorative Architectural Products
 
 
Goodwill [Roll Forward]
 
 
Goodwill, Gross
294 
294 
Accumulated Impairment Losses
(75)
(75)
Beginning balance
219 
 
Other
 
Ending balance
219 
 
Cabinetry Products
 
 
Goodwill [Roll Forward]
 
 
Goodwill, Gross
240 
240 
Accumulated Impairment Losses
(59)
(59)
Beginning balance
181 
 
Other
 
Ending balance
181 
 
Windows and Other Specialty Products
 
 
Goodwill [Roll Forward]
 
 
Goodwill, Gross
988 
988 
Accumulated Impairment Losses
(734)
(734)
Beginning balance
254 
 
Other
 
Ending balance
$ 254 
 
Goodwill and Other Intangible Assets - Narrative (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Other indefinite-lived intangible assets
$ 137 
$ 137 
Carrying value of definite-lived intangible assets
21 
23 
Accumulated amortization
$ 51 
$ 49 
Depreciation and Amortization (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Depreciation, Depletion and Amortization [Abstract]
 
 
Depreciation and amortization expense
$ 32 
$ 34 
Fair Value of Financial Investments - Financial Investments (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Fair value of financial investments and liabilities
 
 
Total financial investments
$ 47 
$ 48 
Prepaid expenses and other |
Auction rate securities
 
 
Fair value of financial investments and liabilities
 
 
Available-for-sale Securities, Equity Securities, Current
12 
 
Available-for-sale Securities, Debt Securities, Current
 
Other assets |
Auction rate securities
 
 
Fair value of financial investments and liabilities
 
 
Recurring investments, available-for-sale securities
10 
22 
Other assets |
Equity method investments
 
 
Fair value of financial investments and liabilities
 
 
Equity method investments
13 
13 
Other assets |
Private equity funds
 
 
Fair value of financial investments and liabilities
 
 
Non-recurring investments
10 
Other assets |
Other investments
 
 
Fair value of financial investments and liabilities
 
 
Non-recurring investments
$ 3 
$ 3 
Fair Value of Financial Investments - Realized Gains (Losses) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income from financial investments, net and impairment charges
 
 
Equity investments income (loss), net
$ 1 
$ 0 
Total income from financial investments, net
Private equity funds
 
 
Income from financial investments, net and impairment charges
 
 
Realized gains from private equity funds
$ 0 
$ 2 
Fair Value of Financial Investments - Narrative (Details) (USD $)
Mar. 31, 2016
Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Cost basis available-for-sale securities
$ 19,000,000 
$ 19,000,000 
Pre-tax unrealized gains, available-for-sale securities
3,000,000 
3,000,000 
Recorded basis, available for sale securities
22,000,000 
22,000,000 
Estimate of Fair Value Measurement
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Estimated market value of long-term and short-term debt
4,600,000,000 
3,600,000,000 
Carrying Value Reported Value Measurement
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Aggregate carrying value of long-term and short-term debt
$ 4,300,000,000 
$ 3,400,000,000 
Derivative Instruments and Hedging Activities (Details) (Derivatives designated as hedging instruments, Cash flow hedges, Interest Rate Swaps, 3 month LIBOR interest rate swap, cash flow hedge terminated March 2012, USD $)
1 Months Ended 12 Months Ended
Mar. 31, 2012
Dec. 31, 2012
Dec. 31, 2012
Other, net
Interest Rate Swap Agreements
 
 
 
Debt issued
 
$ 400,000,000 
 
Ineffective portion of the cash flow hedges
 
 
2,000,000 
Interest rate swap loss amortized as an increase to interest expense over the remaining term of the debt
$ 23,000,000 
 
 
Derivative Instruments and Hedging Activities - Pre-tax Gains (Losses) (Details) (Not designated as a hedge, USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Derivative instruments and hedging activities
 
 
Total gain (loss)
$ 2 
$ (2)
Foreign currency exchange contracts |
Other, net
 
 
Derivative instruments and hedging activities
 
 
Total gain (loss)
Foreign currency forward contracts |
Other, net
 
 
Derivative instruments and hedging activities
 
 
Total gain (loss)
(4)
Metal contracts |
Cost of sales
 
 
Derivative instruments and hedging activities
 
 
Total gain (loss)
$ 2 
$ (2)
Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Foreign currency exchange contracts
 
 
Derivative instruments and hedging activities
 
 
Notional Amount
$ 27 
$ 39 
Foreign currency exchange contracts |
Receivables |
Recurring |
Level 2
 
 
Derivative instruments and hedging activities
 
 
Assets
Foreign currency forward contracts
 
 
Derivative instruments and hedging activities
 
 
Notional Amount
26 
30 
Foreign currency forward contracts |
Accrued liabilities |
Recurring |
Level 2
 
 
Derivative instruments and hedging activities
 
 
Liabilities
(1)
(2)
Foreign currency forward contracts |
Other liabilities |
Recurring |
Level 2
 
 
Derivative instruments and hedging activities
 
 
Liabilities
(2)
(1)
Metal contracts
 
 
Derivative instruments and hedging activities
 
 
Notional Amount
38 
50 
Metal contracts |
Accrued liabilities |
Recurring |
Level 2
 
 
Derivative instruments and hedging activities
 
 
Liabilities
$ (6)
$ (10)
Warranty Liability (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
 
 
Balance at the beginning of the period
$ 152 
$ 135 
Accruals for warranties issued during the year
13 
56 
Accruals related to pre-existing warranties
15 
Settlements made (in cash or kind) during the year
(13)
(50)
Other, net (including currency translation)
(4)
Balance at the end of the period
$ 152 
$ 152 
Debt (Details) (USD $)
0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended
Mar. 17, 2016
Mar. 17, 2016
3.5% Notes and Debentures Due April 1, 2021
Mar. 17, 2016
4.375% Notes and Debentures Due April 1, 2026
Mar. 28, 2013
Credit Agreement dated March 28, 2013
May 29, 2015
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Mar. 31, 2016
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
May 29, 2015
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
May 29, 2015
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Federal funds effective rate
May 29, 2015
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Libor rate
Mar. 31, 2016
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Revolver
Mar. 31, 2016
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Swingline loans
Mar. 31, 2016
Credit agreement dated May 29, 2015 and August 28, 2015, as amended
Letters of credit
Apr. 15, 2016
Subsequent Event
6.125% Notes and Debentures Due October 3, 2016
Apr. 15, 2016
Subsequent Event
6.125% Notes and Debentures Due October 3, 2016
Apr. 15, 2016
Subsequent Event
5.85% Notes and Debenture Due March 15, 2017
Apr. 15, 2016
Subsequent Event
5.85% Notes and Debenture Due March 15, 2017
Apr. 30, 2016
Subsequent Event
5.85% and 6.125% Notes and Debentures
Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, gross
 
$ 400,000,000 
$ 500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate (as a percent)
 
3.50% 
4.375% 
 
 
 
 
 
 
 
 
 
 
6.125% 
 
5.85% 
 
Interest expense, debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
40,000,000 
Proceeds from issuance of debt
896,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes repaid and retired
 
 
 
 
 
 
 
 
 
 
 
 
1,000,000,000 
 
300,000,000 
 
 
Borrowing capacity, maximum
 
 
 
1,250,000,000 
 
 
750,000,000 
 
 
500,000,000 
75,000,000 
100,000,000 
 
 
 
 
 
Increase in maximum borrowing capacity
 
 
 
 
 
 
375,000,000 
 
 
 
 
 
 
 
 
 
 
Outstanding and unused Letters of Credit
 
 
 
 
 
$ 0 
 
 
 
 
 
$ 1,500,000 
 
 
 
 
 
Interest rate, basis spread (as a percent)
 
 
 
 
 
 
 
0.50% 
1.00% 
 
 
 
 
 
 
 
 
Maximum net leverage ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum interest coverage ratio
 
 
 
 
2.5 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-Based Compensation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stock-based compensation
 
 
Pre-tax compensation expense
$ 9 
$ 10 
Income tax benefit
Tax rate (as a percent)
37.00% 
37.00% 
Long-term stock awards
 
 
Stock-based compensation
 
 
Pre-tax compensation expense
Stock Options
 
 
Stock-based compensation
 
 
Pre-tax compensation expense
Phantom stock awards and stock appreciation rights
 
 
Stock-based compensation
 
 
Pre-tax compensation expense
$ 3 
$ 3 
Stock-Based Compensation - Long-Term Stock Award (Details) (Long-term stock awards, USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Long-term stock awards
 
 
Unvested stock award shares
 
 
Balance at the beginning of the period (in shares)
Granted (in shares)
Vested (in shares)
Forfeited (in shares)
Balance at the end of the period (in shares)
Weighted average grant date fair value
 
 
Balance at the beginning of the period (in dollars per share)
$ 17 
$ 18 
Granted (in dollars per share)
$ 26 
$ 26 
Vested (in dollars per share)
$ 16 
$ 17 
Forfeited (in dollars per share)
$ 19 
$ 19 
Balance at the end of the period (in dollars per share)
$ 20 
$ 19 
Additional disclosures
 
 
Total unrecognized compensation expense
$ 62 
$ 68 
Remaining weighted average vesting period
4 years 
3 years 
Total market value (at the vesting date) of stock award shares
$ 36 
$ 48 
Stock-Based Compensation - Stock Options (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stock Options
 
 
Grant date exercise price
$ 26 
 
Stock Options
 
 
Stock Options
 
 
Vesting period
5 years 
 
Expiration period
10 years 
 
Shares
 
 
Outstanding at the beginning of the period (in shares)
12,000,000 
18,000,000 
Granted (in shares)
474,500 
Exercised (in shares)
1,000,000 
1,000,000 
Forfeited (in shares)
Outstanding at the end of the period (in shares)
11,000,000 
17,000,000 
Option shares vested and expected to vest at the end of the period (in shares)
11,000,000 
17,000,000 
Option shares exercisable at the end of the period (in shares)
10,000,000 
15,000,000 
Weighted average exercise price
 
 
Outstanding at the beginning of the period (in dollars per share)
$ 17 
$ 21 
Granted (in dollars per share)
$ 26 
$ 26 
Exercised (in dollars per share)
$ 18 
$ 14 
Forfeited (in dollars per share)
$ 0 
$ 22 
Outstanding at the end of the period (in dollars per share)
$ 18 
$ 22 
Option shares vested and expected to vest at the end of the period (in dollars per share)
$ 18 
$ 22 
Option shares exercisable at the end of the period (in dollars per share)
$ 17 
$ 22 
Aggregate intrinsic value
 
 
Exercised
$ 18 
$ 17 
Option shares vested and expected to vest at the end of the period
154 
108 
Option shares exercisable at the end of the period
138 
94 
Weighted average remaining option term
 
 
Outstanding at the end of the period
4 years 
3 years 
Option shares vested and expected to vest at the end of the period
4 years 
3 years 
Option shares exercisable at the end of the period
3 years 
3 years 
Additional disclosures
 
 
Total unrecognized compensation expense
$ 8 
$ 9 
Weighted average remaining vesting period
3 years 
3 years 
Stock-Based Compensation - Option Pricing Assumptions and Estimates (Details) (Stock Options, USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stock Options
 
 
Stock Options
 
 
Weighted average grant date fair value (in dollars per share)
$ 6.43 
$ 9.67 
Risk-free interest rate (as a percent)
1.41% 
1.75% 
Dividend yield (as a percent)
1.49% 
1.32% 
Volatility factor (as a percent)
29.00% 
42.00% 
Expected option life
6 years 
6 years 
Employee Retirement Plans (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Qualified
 
 
Net periodic pension cost for the company's defined-benefit pension plans
 
 
Service cost
$ 1 
$ 1 
Interest cost
11 
12 
Expected return on plan assets
(10)
(11)
Amortization of net loss
Net periodic pension cost
Non-Qualified
 
 
Net periodic pension cost for the company's defined-benefit pension plans
 
 
Service cost
Interest cost
Expected return on plan assets
Amortization of net loss
Net periodic pension cost
$ 2 
$ 2 
Reclassifications From Accumulated Other Comprehensive Loss (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Reclassifications from accumulated other comprehensive (loss) income
 
 
Net of tax
$ (3)
$ (4)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent
 
 
Reclassifications from accumulated other comprehensive (loss) income
 
 
Tax (benefit)
(2)
(1)
Selling, General and Administrative Expenses |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent
 
 
Reclassifications from accumulated other comprehensive (loss) income
 
 
Actuarial losses, net
$ 5 
$ 5 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Segment Information
 
 
Net Sales
$ 1,720 
$ 1,659 
Operating Profit (Loss)
234 
165 
Other income (expense), net
(57)
(55)
Income from continuing operations before income taxes
177 
110 
Operating Segments
 
 
Segment Information
 
 
Net Sales
1,720 
1,659 
Operating Profit (Loss)
261 
196 
Operating Segments |
Plumbing Products
 
 
Segment Information
 
 
Net Sales
813 
796 
Operating Profit (Loss)
129 
111 
Operating Segments |
Decorative Architectural Products
 
 
Segment Information
 
 
Net Sales
493 
451 
Operating Profit (Loss)
105 
83 
Operating Segments |
Cabinetry Products
 
 
Segment Information
 
 
Net Sales
236 
249 
Operating Profit (Loss)
24 
(4)
Operating Segments |
Windows and Other Specialty Products
 
 
Segment Information
 
 
Net Sales
178 
163 
Operating Profit (Loss)
Geographic Areas
 
 
Segment Information
 
 
Net Sales
1,720 
1,659 
Operating Profit (Loss)
261 
196 
Geographic Areas |
North America
 
 
Segment Information
 
 
Net Sales
1,350 
1,282 
Operating Profit (Loss)
215 
151 
Geographic Areas |
International, principally Europe
 
 
Segment Information
 
 
Net Sales
370 
377 
Operating Profit (Loss)
46 
45 
Corporate
 
 
Segment Information
 
 
General corporate expense, net
$ (27)
$ (31)
Severance Costs (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Restructuring Charges [Abstract]
 
 
Severance costs
$ 2 
$ 6 
Other Income (Expense), Net (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Other Income and Expenses [Abstract]
 
 
Income from cash and cash investments
$ 1 
$ 0 
Income from financial investments, net
Foreign currency transaction losses
(1)
Other items, net
(3)
Total other, net
$ (1)
$ 1 
Earnings Per Common Share (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Numerator (basic and diluted):
 
 
Income from continuing operations
$ 109 
$ 61 
Less: Allocation to unvested restricted stock awards
Income from continuing operations attributable to common shareholders
108 
60 
Income from discontinued operations, net
Less: Allocation to unvested restricted stock awards
Income (loss) from discontinued operations attributable to common shareholders
Net income available to common shareholders
$ 108 
$ 63 
Denominator:
 
 
Basic common shares (based upon weighted average) (in shares)
330 
344 
Add: Stock option dilution (in shares)
Diluted common shares (in shares)
333 
347 
Earnings Per Common Share - Narrative (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Sep. 30, 2014
Antidilutive securities excluded from computation of earnings per share
 
 
 
Repurchase and retirement of common stock (in shares)
3.2 
 
 
Remaining number of shares authorized to be repurchased
24.6 
 
50.0 
Total consideration for repurchase of common stock including unpaid cash
$ 86 
 
 
Dividends
 
 
 
Cash dividends per common share declared (in dollars per share)
$ 0.095 
$ 0.090 
 
Cash dividends per common share paid (in dollars per share)
$ 0.095 
$ 0.090 
 
Stock Options
 
 
 
Antidilutive securities excluded from computation of earnings per share
 
 
 
Antidilutive effect on computation of diluted earnings per common share (in shares)
 
Long-term stock awards
 
 
 
Antidilutive securities excluded from computation of earnings per share
 
 
 
Repurchase and retirement of common stock to offset the dilutive impact of stock awards (in shares)
1.0 
 
 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income Tax Disclosure [Abstract]
 
 
Effective tax rate (as a percent)
33.00% 
36.00% 
Uncertain tax position expirations
$ 4