Financial Analysis

"B. ACQUISITIONS In the third quarter of 2023, we acquired all of the share capital of Sauna360 Group Oy (Sauna360) for approximately 124 million ($136 million), net of cash acquired. Sauna360 has a portfolio of products that includes traditional, infrared, and wood-burning saunas as well as steam showers. The business is included within the Plumbing Products segment. In connection with this acquisition, we recognized $22 million of indefinite-lived intangible assets, which is related to trademarks, and $45 million of definite-lived intangible assets, primarily related to customer relationships. The definite-lived intangible assets are being amortized on a straight-line basis over a weighted average amortization period of 16 years. We also recognized $60 million of goodwill, which is not tax deductible, and is related primarily to the expected synergies from combining the operations into our business. During the fourth quarter of 2023 and third quarter of 2024, we updated the allocation of the purchase price to certain identifiable assets and liabilities based on analysis of information as of the acquisition date, which resulted in a $1 million decrease and a $2 million increase to goodwill, respectively. In the first quarter of 2021, our Hansgrohe SE subsidiary acquired a 75.1 percent equity interest in Easy Sanitary Solutions B.V. (""ESS""). The remaining 24.9 percent equity interest in ESS was subject to a call and put option that was exercisable by Hansgrohe SE or the sel …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

R. OTHER COMMITMENTS AND CONTINGENCIES Litigation. We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: advertising, competition, contract, data privacy, employment, environmental, insurance coverage, intellectual property, personal injury, product compliance, product liability, securities and warranty. We are also subject to product safety regulations, product recalls and direct claims for product liabilities. We believe the likelihood that the outcome of these claims, litigation and product safety 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 or penalties, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations. Warranty. Changes in our warranty liability were as follows, in millions: Year Ended December 31, 2025 2024 Balance at January 1 $ 81 $ 83 Accruals for warranties issued during the year 35 38 Accruals related to pre-existing warranties 11 8 Settlements made (in cash or kind) during the year (41) (43) Other, net (including currency translation and divestitures) 2 (4) Balance at December 31 $ 88 $ 81 Other Matters. We enter into contracts, which include reasonable and customary indemnificati …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"K. DEBT The carrying value of outstanding debt was as follows, in millions: At December 31, 2025 2024 Notes and debentures: 3.500%, due November 15, 2027 $ 300 $ 300 1.500%, due February 15, 2028 600 600 7.750%, due August 1, 2029 235 235 2.000%, due October 1, 2030 300 300 2.000%, due February 15, 2031 598 597 6.500%, due August 15, 2032 200 200 4.500%, due May 15, 2047 414 415 3.125%, due February 15, 2051 300 300 Other 14 17 Prepaid debt issuance costs (13) (15) 2,947 2,948 Less: Current portion 2 3 Total long-term debt $ 2,945 $ 2,945 All of the notes and debentures above are senior indebtedness and, other than the 7.750% Notes due 2029, are redeemable at our option. At December 31, 2025, the debt maturities during each of the next five years were as follows: 2026 $2 million; 2027 $302 million; 2028 $602 million; 2029 $237 million and 2030 $302 million. On April 26, 2022, we entered into a revolving credit agreement (the 2022 Credit Agreement) with an aggregate commitment of $1.0 billion and a maturity date of April 26, 2027. Under the 2022 Credit Agreement, at our request and subject to certain conditions, we can increase the aggregate commitment up to an additional $500 million with the current lenders or new lenders. The 2022 Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries in U.S. dollars, European euros, British pounds sterling, and certain other currencies for revolving credit loans, swingline …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Our revenues are derived from sales to customers in the following geographic areas: North America and International, which are particularly in Europe. Net sales from these geographic areas, by segment, were as follows, in millions: Year Ended December 31, 2025 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 3,380 $ 2,570 $ 5,950 International 1,612 1,612 Total $ 4,992 $ 2,570 $ 7,562 Year Ended December 31, 2024 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 3,289 $ 2,975 $ 6,264 International 1,564 1,564 Total $ 4,853 $ 2,975 $ 7,828 Year Ended December 31, 2023 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 3,259 $ 3,125 $ 6,384 International 1,583 1,583 Total $ 4,842 $ 3,125 $ 7,967 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"L. STOCK-BASED COMPENSATION Our 2024 Long Term Stock Incentive Plan (the ""2024 Plan"") replaced the 2014 Long Term Stock Incentive Plan in May 2024 and provides for the issuance of stock-based incentives in various forms to our employees and non-employee Directors. At December 31, 2025, outstanding stock-based incentives were in the form of restricted stock units, performance restricted stock units, stock options, phantom stock awards and stock appreciation rights. Pre-tax compensation expense included in income before income taxes for these stock-based incentives was as follows, in millions: Year Ended December 31, 2025 2024 2023 Restricted stock units $ 21 $ 26 $ 15 Performance restricted stock units 3 5 3 Stock options 3 4 5 Phantom stock awards and stock appreciation rights 3 4 5 Long-term stock awards 3 Total $ 30 $ 39 $ 31 At December 31, 2025, approximately 7.0 million shares of our common stock were available under the 2024 Plan for the granting of restricted stock units, performance restricted stock units, stock options and long-term stock awards. L. STOCK-BASED COMPENSATION (Continued) Restricted Stock Units. Restricted stock units are granted to our key employees and non-employee Directors. These grants did not cause net share dilution due to our practice of repurchasing and retiring an equal number of shares in the open market. Our restricted stock unit activity was as follows, units in thousands: Year Ended December 31, 2025 2024 2023 Number of Shares Weighted …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

H. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at December 31, 2025, by segment, was as follows, in millions: Gross Goodwill At December 31, 2025 Accumulated Impairment Losses Net Goodwill At December 31, 2025 Plumbing Products $ 694 $ (301) $ 393 Decorative Architectural Products 305 (75) 230 Total $ 999 $ (376) $ 623 H. GOODWILL AND OTHER INTANGIBLE ASSETS (Concluded) The changes in the carrying amount of goodwill for years ended December 31, 2025 and 2024, by segment, were as follows, in millions: Gross Goodwill At December 31, 2024 Accumulated Impairment Losses Net Goodwill At December 31, 2024 Acquisitions Foreign Currency Translation Net Goodwill At December 31, 2025 Plumbing Products $ 667 $ (301) $ 367 $ $ 26 $ 393 Decorative Architectural Products (A) 305 (75) 230 230 Total $ 973 $ (376) $ 597 $ $ 26 $ 623 Gross Goodwill At December 31, 2023 Accumulated Impairment Losses Net Goodwill At December 31, 2023 Acquisitions (B) Foreign Currency Translation Net Goodwill At December 31, 2024 Plumbing Products $ 677 $ (301) $ 377 $ 2 $ (12) $ 367 Decorative Architectural Products 366 (139) 227 4 230 Total $ 1,043 $ (440) $ 604 $ 6 $ (12) $ 597 (A) As a result of the divestiture of Kichler in the third quarter of 2024, both gross goodwill and accumulated impairment losses for the Decorative Architectural Products segment were reduced by $64 million as the goodwill had been fully impaired prior to the divestiture. (B) In the third quarter of 2023, we acquired Sauna360 and duri …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"P. INCOME TAXES Components of income taxes on income before income taxes and the components of deferred tax assets and liabilities were as follows, in millions: 2025 2024 2023 Income before income taxes: U.S. $ 889 $ 881 $ 968 Foreign 246 280 270 $ 1,135 $ 1,161 $ 1,238 Income tax expense: Currently payable: U.S. Federal $ 123 $ 153 $ 189 State and local 17 26 47 Foreign 74 80 74 Deferred: U.S. Federal 51 14 State and local 8 9 (39) Foreign 4 5 7 $ 277 $ 287 $ 278 Deferred tax assets at December 31: Receivables $ 9 $ 8 Inventories 16 13 Other assets, including stock-based compensation 7 8 Accrued liabilities 43 48 Noncurrent operating lease liabilities 46 44 Other long-term liabilities 46 49 Capitalized research expenditures 48 Net operating loss carryforward 52 57 Tax credit carryforward 7 8 226 283 Valuation allowance (27) (27) 199 256 Deferred tax liabilities at December 31: Property and equipment 83 77 Operating lease right-of-use assets 49 45 Intangibles 79 80 Investment in foreign subsidiaries 16 14 Other 17 16 244 232 Net deferred tax (liability) asset at December 31 $ (45) $ 24 The net deferred tax (liability) asset consisted of net deferred tax assets (included in other assets) of $50 million and $62 million, and net deferred tax liabilities (included in other liabilities) of $95 million and $38 million, at December 31, 2025 and 2024, respectively. P. INCOME TAXES (Continued) In the fourth quarter of 2023, we recognized a $29 million state income tax benefit, net of …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

F. LEASES We have operating and finance leases primarily for corporate offices, manufacturing facilities, warehouses, vehicles, and equipment. Our leases have remaining lease terms up to 17 years, some of which may include one or more renewal options with terms to extend the lease for up to an additional 15 years, and some of which may include options to terminate the leases prior to their expiration. The components of lease cost included in income before income taxes were as follows, in millions: Year Ended December 31, 2025 2024 2023 Operating lease cost $ 63 $ 64 $ 61 Short-term lease cost 8 9 10 Variable lease cost 6 5 7 Finance lease cost: Amortization of ROU assets 2 3 3 Interest on lease liabilities 1 1 F. LEASES (Continued) Supplemental cash flow information related to leases was as follows, in millions: Year Ended December 31, 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 60 $ 54 $ 50 Operating cash flows for finance leases 1 1 Financing cash flows for finance leases 2 3 3 ROU assets obtained in exchange for new lease obligations: Operating leases (A) 42 34 41 (A) Includes $6 million of ROU assets obtained in exchange for new lease obligations related to the acquisition of Sauna360 in 2023. Certain other information related to leases was as follows: At December 31, 2025 2024 2023 Weighted-average remaining lease term: Operating leases 9 years 9 years 10 years Finance leases 6 years 7 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Adopted Accounting Pronouncements. In December 2023, the Financial Accounting Standards Board (""FASB"") issued ASU 2023-09, ""Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional income tax disclosures, particularly regarding the effective tax rate reconciliation and income taxes paid. We adopted this standard for annual periods beginning January 1, 2025. The adoption of this guidance modified our annual disclosures, but did not have an impact on our financial position and results of operations. Recently Issued Accounting Pronouncements. In December 2025, the FASB issued ASU 2025-10, ""Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities,"" which establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. ASU 2025-10 is effective on a modified prospective, modified retrospective, or retrospective basis for interim and annual reporting periods beginning January 1, 2029. Early adoption is permitted. We are currently reviewing the provisions of this standard and the impact, if any, the adoption of this guidance will have on our financial position and results of operations. In September 2025, the FASB issued ASU 2025-06, ""Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,"" which requires that an entity capitalize internal-use software devel …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

M. EMPLOYEE RETIREMENT PLANS Substantially all salaried employees participate in non-contributory defined-contribution retirement plans, to which payments are determined annually by the Compensation Committee. We also sponsor qualified defined-benefit and non-qualified defined-benefit pension plans covering certain employees and former employees. Pre-tax expense included in income before income taxes related to our retirement plans was as follows, in millions: Year Ended December 31, 2025 2024 2023 Defined-contribution plans $ 49 $ 60 $ 68 Defined-benefit pension plans 8 9 9 $ 58 $ 69 $ 78 Substantially all our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals. M. EMPLOYEE RETIREMENT PLANS (Continued) Changes in the projected benefit obligation and fair value of plan assets, and the funded status of our defined-benefit pension plans were as follows, in millions: At Year Ended December 31, 2025 2024 Qualified Non-Qualified Qualified Non-Qualified Changes in projected benefit obligation: Projected benefit obligation at January 1 $ 125 $ 101 $ 136 $ 108 Service cost 2 2 Interest cost 5 5 4 5 Actuarial (gain) loss, net (17) 5 (4) (1) Foreign currency exchange 16 (8) Benefit payments (5) (12) (4) (12) Projected benefit obligation at December 31 $ 126 $ 100 $ 125 $ 101 Changes in fair value of plan assets: Fair value of plan assets at January 1 $ 92 $ $ 90 $ Actual return on plan assets (3) 8 Foreign curre …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

D. REVENUE Our revenues are derived from sales to customers in the following geographic areas: North America and International, which are particularly in Europe. Net sales from these geographic areas, by segment, were as follows, in millions: Year Ended December 31, 2025 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 3,380 $ 2,570 $ 5,950 International 1,612 1,612 Total $ 4,992 $ 2,570 $ 7,562 Year Ended December 31, 2024 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 3,289 $ 2,975 $ 6,264 International 1,564 1,564 Total $ 4,853 $ 2,975 $ 7,828 Year Ended December 31, 2023 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 3,259 $ 3,125 $ 6,384 International 1,583 1,583 Total $ 4,842 $ 3,125 $ 7,967 We recognized increases t o revenue o f $3 million, $10 million, and $12 million in 2025, 2024, and 2023, respectively, for variable consideration related to performance obligations settled in previous periods. We record contract assets for items for which we have satisfied our performance obligation but our receipt of payment is contingent upon delivery or other circumstances other than the passage of time. Our contract assets are recorded in prepaid expenses and other in our consolidated balance sheets. Our contract assets generally become unconditional and are reclassified to receivables in the quarter subsequent to each bala …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"O. SEGMENT INFORMATION Our reportable segments are as follows: Plumbing Products principally includes faucets, plumbing system components and valves, showerheads and handheld showers, bath hardware and accessories, bathing units, tubs and shower bases and enclosures, shower drains, steam shower systems, water filtration systems, sinks, kitchen accessories, spas, exercise pools, aquatic fitness systems, and saunas. Decorative Architectural Products principally includes paints and other coating products, paint applicators and accessories, cabinet and other hardware, shower doors and, until the divestiture of Kichler in the third quarter of 2024, lighting fixtures, ceiling fans, landscape lighting and LED lighting systems. The above products are sold to the residential repair and remodel and to a lesser extent the new home construction markets through home center retailers, online retailers, wholesalers and distributors, mass merchandisers, hardware stores, direct to the consumer and homebuilders. Our operations are principally located in North America and Europe. Our country of domicile is the United States of America. Other than those assets specifically identified within a segment, corporate assets consist primarily of property and equipment, ROU assets, deferred tax assets, cash and cash investments and other investments. Our accounting policies are consistently applied by our segments. Our segments are based upon similarities in products and represent the aggregation of op …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"A. ACCOUNTING POLICIES Basis of Presentation. The accompanying consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted (""GAAP"") in the United States of America. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Principles of Consolidation. The consolidated financial statements include the accounts of Masco Corporation and all majority-owned subsidiaries. All significant intercompany transactions have been eliminated. We consolidate the assets, liabilities and results of operations of variable interest entities for which we are the primary beneficiary. Use of Estimates and Assumptions in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. Revenue Recognition. We recognize revenue as control of our products is transferred to our customers, which is generally at the time of shipment or upon delivery based on the contractual terms with our customers. Our customers' payment terms generally range from 30 to 65 days. …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

N. SHAREHOLDERS' EQUITY Effective October 20, 2022, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock, exclusive of excise tax, in open-market transactions or otherwise. During 2025, we repurchased and retired 8.5 million shares of our common stock (including 0.3 million shares to offset the dilutive impact of restricted stock units granted in 2025) for $576 million, inclusive of excise tax of $5 million. At December 31, 2025, we had $325 million remaining under the 2022 authorization. During 2024, we repurchased and retired 10.0 million shares of our common stock (including 0.5 million shares to offset the dilutive impact of restricted stock units granted in 2024) for $757 million, inclusive of excise tax of $6 million. N. SHAREHOLDERS' EQUITY (Concluded) During 2023, we repurchased and retired 6.2 million shares of our common stock (including 0.2 million shares to offset the dilutive impact of restricted stock units granted in 2023) for $356 million, inclusive of excise tax of $3 million. Effective February 10, 2026, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock, exclusive of excise tax, in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2022. We have declared and paid cash dividends per common share of $1.24 in 2025, $1.16 in 2024 and $1.14 in 2023. Accumulated Other Compreh …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

J. OTHER COMMITMENTS AND CONTINGENCIES Litigation. We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: advertising, competition, contract, data privacy, employment, environmental, insurance coverage, intellectual property, personal injury, product compliance, product liability, securities and warranty. We are also subject to product safety regulations, product recalls and direct claims for product liabilities. We believe the likelihood that the outcome of these claims, litigation and product safety 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 or penalties, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations. Warranty. Changes in our warranty liability were as follows, in millions: Six Months Ended June 30, 2026 Twelve Months Ended December 31, 2025 Balance at January 1 $ 88 $ 81 Accruals for warranties issued during the period 18 35 Accruals related to pre-existing warranties 6 11 Settlements made (in cash or kind) during the period (18) (41) Other, net (including currency translation) (1) 2 Balance at end of period $ 94 $ 88

CommitmentsAndContingenciesDisclosureTextBlock

F. DEBT On March 20, 2026, we entered into a revolving credit agreement (the 2026 Credit Agreement) with an aggregate commitment of $1.0 billion and a maturity date of March 20, 2031. At our request (which may not be exercised more than two times), the maturity may be extended for an additional one-year period, in each case subject to customary terms and conditions, including the consent of lenders holding at least a majority of the commitments and outstanding credit exposure under the 2026 Credit Agreement at the time. In addition, we may, at our option, request an increase in the aggregate commitment under the 2026 Credit Agreement of up to $500 million, subject to customary terms and conditions. Upon entry into the 2026 Credit Agreement, our credit agreement dated April 26, 2022, with an aggregate commitment of $1.0 billion, was terminated. The 2026 Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries in U.S. dollars, European euros, British pounds sterling, Canadian dollars and certain other currencies for revolving credit loans, swingline loans and letters of credit. Borrowings under the revolving credit loans denominated in any agreed upon currency other than U.S. dollars are limited to the equivalent of $500 million. We can also borrow swingline loans up to $120 million and obtain letters of credit of up to $25 million. Outstanding letters of credit under the 2026 Credit Agreement reduce our borrowing …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Our revenues are derived from sales to customers in the following geographic areas: North America and International, which are particularly in Europe. Net sales from these geographic areas, by segment, were as follows, in millions: Three Months Ended June 30, 2026 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 898 $ 655 $ 1,554 International 438 438 Total $ 1,337 $ 655 $ 1,992 Six Months Ended June 30, 2026 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 1,837 $ 1,209 $ 3,047 International 863 863 Total $ 2,700 $ 1,209 $ 3,910 Three Months Ended June 30, 2025 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 959 $ 679 $ 1,638 International 413 413 Total $ 1,372 $ 679 $ 2,051 Six Months Ended June 30, 2025 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 1,815 $ 1,234 $ 3,049 International 802 802 Total $ 2,618 $ 1,234 $ 3,852 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

D. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill at June 30, 2026, by segment, was as follows, in millions: Gross Goodwill At June 30, 2026 Accumulated Impairment Losses Net Goodwill At June 30, 2026 Plumbing Products $ 771 $ (376) $ 394 Decorative Architectural Products 223 223 Total $ 994 $ (376) $ 618 The changes in the carrying amount of goodwill for the six months ended June 30, 2026, by segment, were as follows, in millions: Gross Goodwill At December 31, 2025 Accumulated Impairment Losses Net Goodwill At December 31, 2025 Foreign Currency Translation Net Goodwill At June 30, 2026 Plumbing Products $ 776 $ (376) $ 400 $ (5) $ 394 Decorative Architectural Products 223 223 223 Total $ 999 $ (376) $ 623 $ (5) $ 618 The carrying value of our other indefinite-lived intangible assets was $76 million and $77 million at June 30, 2026 and December 31, 2025, respectively, and principally included registered trademarks. The carrying value of our definite-lived intangible assets was $118 million (net of accumulated amortization of $96 million) at June 30, 2026 and $128 million (net of accumulated amortization of $92 million) at December 31, 2025, and principally included customer relationships. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

H. INCOME TAXES Our effective tax rate was 24.3 percent and 25.1 percent for the three months ended June 30, 2026 and 2025, respectively, and was 23.3 percent and 23.7 percent for the six months ended June 30, 2026 and 2025, respectively.

IncomeTaxDisclosureTextBlock

"Recently Adopted Accounting Pronouncements. In July 2025, the Financial Accounting Standards Board (""FASB"") issued ASU 2025-05, ""Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets,"" which provides a practical expedient that allows entities to assume the current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. We adopted this standard on a prospective basis for interim and annual periods beginning January 1, 2026. The adoption of this guidance did not have a material impact on our financial position and results of operations. Recently Issued Accounting Pronouncements . In December 2025, the FASB issued ASU 2025-10, ""Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities,"" which establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. ASU 2025-10 is effective on a modified prospective, modified retrospective, or retrospective basis for interim and annual reporting periods beginning January 1, 2029. Early adoption is permitted. We are currently reviewing the provisions of this standard and the impact, if any, the adoption of this guidance will have on our financial position and results of operations. In September 2025, the FASB issued ASU 2025-06, ""Intangibles …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

B. REVENUE Our revenues are derived from sales to customers in the following geographic areas: North America and International, which are particularly in Europe. Net sales from these geographic areas, by segment, were as follows, in millions: Three Months Ended June 30, 2026 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 898 $ 655 $ 1,554 International 438 438 Total $ 1,337 $ 655 $ 1,992 Six Months Ended June 30, 2026 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 1,837 $ 1,209 $ 3,047 International 863 863 Total $ 2,700 $ 1,209 $ 3,910 Three Months Ended June 30, 2025 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 959 $ 679 $ 1,638 International 413 413 Total $ 1,372 $ 679 $ 2,051 Six Months Ended June 30, 2025 Plumbing Products Decorative Architectural Products Total Primary geographic areas: North America $ 1,815 $ 1,234 $ 3,049 International 802 802 Total $ 2,618 $ 1,234 $ 3,852 Our contract liability balance was $15 million and $57 million at June 30, 2026 and December 31, 2025, respectively. B. REVENUE (Concluded) Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions: Six Months Ended June 30, 2026 Twelve Months Ended December 31, 2025 Balance at January 1 $ 12 $ 10 Provision for expected credit losses during the period 2 5 Write-offs charged against the allowanc …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

G. SEGMENT INFORMATION Our reportable segments are as follows: Plumbing Products principally includes faucets, plumbing system components and valves, showerheads and handheld showers, bath hardware and accessories, bathing units, tubs and shower bases, enclosures and doors, shower drains, steam shower systems, water filtration systems, sinks, kitchen accessories, cabinet and other hardware, spas, exercise pools, aquatic fitness systems, and saunas. Decorative Architectural Products principally includes paints and other coating products, paint applications and accessories. Information by segment was as follows, in millions: Three Months Ended June 30, 2026 Plumbing Products Decorative Architectural Products Total Net sales (A) $ 1,337 $ 655 $ 1,992 Operating expenses (B) 971 503 Corporate expenses (C) 13 6 Segment operating profit $ 352 $ 147 $ 499 General corporate expense, net (C) (29) Operating profit (D) 470 Other income (expense), net (30) Income before income taxes $ 440 Six Months Ended June 30, 2026 Plumbing Products Decorative Architectural Products Total Net sales (A) $ 2,700 $ 1,209 $ 3,910 Operating expenses (B) 2,078 946 Corporate expenses (C) 26 12 Segment operating profit $ 595 $ 251 $ 847 General corporate expense, net (C) (60) Operating profit (D) 787 Other income (expense), net (55) Income before income taxes $ 731 G. SEGMENT INFORMATION (Continued) Three Months Ended June 30, 2025 Plumbing Products Decorative Architectural Products Total Net sales (A) $ 1,37 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"A. ACCOUNTING POLICIES In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to fairly state our financial position at June 30, 2026, our results of operations and comprehensive income (loss) for the three and six months ended June 30, 2026 and 2025, cash flows for the six months ended June 30, 2026 and 2025 and changes in shareholders' equity for the three and six months ended June 30, 2026 and 2025. The condensed consolidated balance sheet at December 31, 2025 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. In the first quarter of 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful. Subsequently, the U.S. Court of International Trade ordered U.S. Customs and Border Protection to refund IEEPA tariffs previously collected. During the second quarter of 2026, we began receiving refunds related to IEEPA tariffs. Additionally, as of June 30, 2026, we have recognized a receivable for tariff refunds not yet paid that are considered to be probable of collection and reasonably estimable. In the first quarter of 2026, we began the implementat …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

K. SUBSEQUENT EVENT On July 28, 2026, we completed the divestiture of our Bristan Group business, a United Kingdom-based provider of bathroom, kitchen, and shower faucets, shower enclosures, and other products for a purchase price of 49 million ($65 million), net of cash disposed, subject to customary closing adjustments, and up to an additional 6 million ($8 million) if certain performance measures are achieved by year ended December 31, 2026. The sale of Bristan Group did not represent a strategic shift that will have a major effect on our operations and financial results and, therefore, will not be presented as discontinued operations. Prior to the divestiture, the results of the business were included in our Plumbing Products segment. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing