FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended June 30, 1996. Commission File Number 1-5794
MASCO CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 38-1794485
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21001 Van Born Road, Taylor, Michigan 48180
(Address of principal executive offices) (Zip Code)
(313) 274-7400
(Telephone Number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Shares Outstanding at
Class August 1, 1996
Common stock, par value $1 per share 160,602,000
<PAGE>
MASCO CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet -
June 30, 1996 and December 31, 1995 1
Condensed Consolidated Statement of
Income for the Three Months and
Six Months Ended June 30, 1996
and 1995 2
Condensed Consolidated Statement of
Cash Flows for the Six Months Ended
June 30, 1996 and 1995 3
Notes to Condensed Consolidated
Financial Statements 4-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-11
Unaudited Information Regarding Equity
Affiliates for the Three Months and
Six Months Ended June 30, 1996 and 1995 12
Part II. Other Information and Signature 13
<PAGE>
MASCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1996 and December 31, 1995
(Dollars in thousands)
June 30, December 31,
ASSETS 1996 1995
Current assets:
Cash and cash investments $ 73,030 $ 60,470
Accounts and notes receivable, net 492,600 439,900
Prepaid expenses and other 73,050 72,370
Inventories:
Finished goods 128,140 130,070
Raw material 179,940 171,670
Work in process 91,280 90,020
399,360 391,760
Total current assets 1,038,040 964,500
Equity investments in MascoTech, Inc. 201,360 202,380
Equity investments in other affiliates 59,340 62,570
Property and equipment, net 884,050 856,690
Excess of cost over acquired net assets 414,720 343,510
Other noncurrent assets 288,050 296,310
Net assets of discontinued operations 1,033,200 1,052,670
Total assets $3,918,760 $3,778,630
LIABILITIES
Current liabilities:
Notes payable $ 23,220 $ 25,690
Accounts payable 118,910 125,230
Accrued liabilities 334,710 294,930
Total current liabilities 476,840 445,850
Long-term debt 1,622,040 1,577,100
Deferred income taxes and other 106,410 100,250
Total liabilities 2,205,290 2,123,200
SHAREHOLDERS' EQUITY
Common stock, par value $1 per share
Authorized shares: 400,000,000 160,540 160,380
Preferred stock, par value $1 per share
Authorized shares: 1,000,000 --- ---
Paid-in capital 131,800 128,550
Retained earnings 1,434,550 1,366,330
Cumulative translation adjustments (13,420) 170
Total shareholders' equity 1,713,470 1,655,430
Total liabilities and
shareholders' equity $3,918,760 $3,778,630
See notes to condensed consolidated financial statements.
1
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MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Three Months and Six Months Ended June 30, 1996 and 1995
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 787,000 $ 714,000 $1,551,000 $1,435,000
Cost of sales 496,570 449,120 976,900 887,950
Gross profit 290,430 264,880 574,100 547,050
Selling, general and administrative
expenses 169,770 159,630 339,300 317,670
Amortization of excess of cost over
acquired net assets 2,690 2,030 5,300 4,300
Operating profit 117,970 103,220 229,500 225,080
Other (income) expense, net:
Interest expense 16,500 19,110 34,000 35,660
Equity (earnings) loss from
MascoTech, Inc. 5,570 (4,540) (3,300) (8,310)
Other, net (14,000) (6,980) (17,900) (14,530)
8,070 7,590 12,800 12,820
Income from continuing operations
before income taxes 109,900 95,630 216,700 212,260
Income taxes 41,900 38,220 86,700 84,930
Income from continuing operations 68,000 57,410 130,000 127,330
Income from operations of discontinued
segment (net of income taxes of $3,990
and $6,980 for the three months and
six months ended June 30, 1995,
respectively) --- 5,990 --- 10,470
Net income $ 68,000 $ 63,400 $ 130,000 $ 137,800
Earnings per share:
Continuing operations $.42 $.36 $.81 $.80
Discontinued operations -- .04 -- .07
Earnings per share $.42 $.40 $.81 $.87
Cash dividends declared and paid per share $.19 $.18 $.38 $.36
Average shares outstanding 160,500 158,800 160,500 158,800
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1996 and 1995
(Dollars in thousands)
Six Months Ended
June 30
1996 1995
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Cash provided by continuing operations $168,800 $148,880
(Increase) in receivables (39,500) (59,590)
(Increase) decrease in inventories 1,950 (39,540)
Decrease in prepaid expenses 340 5,650
Increase (decrease) in current liabilities 18,970 (20,730)
Total cash from operating activities
of continuing operations 150,560 34,670
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
Acquisition of companies (100,000) ---
Capital expenditures (50,840) (81,380)
Proceeds from sale of Formica investment --- 74,470
Proceeds from sales of investments 23,870 ---
Other, net (11,090) (12,860)
Total cash (for) investing activities
of continuing operations (138,060) (19,770)
Discontinued operations, net 19,470 (12,850)
Total cash (for) investing activities (118,590) (32,620)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
Increase in debt 300,420 369,960
Payment of debt (258,910) (308,770)
Cash dividends paid (60,920) (56,980)
Total cash from (for) financing activities
of continuing operations (19,410) 4,210
CASH AND CASH INVESTMENTS:
Increase for the period 12,560 6,260
At January 1 60,470 36,530
At June 30 $ 73,030 $ 42,790
See notes to condensed consolidated financial statements.
3
<PAGE>
MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, of a normal
recurring nature, necessary to present fairly its financial position as at
June 30, 1996 and the results of operations for the three months and six
months ended June 30, 1996 and 1995 and cash flows for the six months ended
June 30, 1996 and 1995. The statement of income for the three months and
six months ended June 30, 1995, statement of cash flows for the six months
ended June 30, 1995 and related notes have been reclassified to present the
Company's home furnishings products segment as discontinued operations.
The condensed consolidated balance sheet as of June 30, 1996 and December
31, 1995 also reflects the home furnishings products segment as
discontinued operations. The condensed consolidated balance sheet at
December 31, 1995 was derived from audited financial statements, but does
not include all disclosures required by generally accepted accounting
principles. Earnings per share are calculated based on the weighted
average common shares outstanding.
B. On April 1, 1996, the Company entered into an agreement for the sale of its
home furnishings products businesses to Furnishings International Inc. The
Company classified its home furnishings products segment as discontinued
operations in late November 1995. Furnishings International's investors
currently include 399 Venture Partners, certain members of Furnishings
International's management, the Company and certain affiliates of Travelers
Group Inc.
On August 5, 1996, the Company finalized the sale of its home furnishings
products businesses to Furnishings International Inc. Total proceeds to
Masco from the sale are in excess of $1.0 billion with approximately $710
million of the purchase price in cash. The balance consists of junior debt
securities, preferred stock and 15 percent of the common stock of
Furnishings International. In addition, Masco received certain
transferable rights to acquire additional equity in Furnishings
International.
The Company's discontinued home furnishings products segment had net income
of approximately $16.0 million for the six months ended June 30, 1996
(excluded from results of operations for 1996 as it was considered in
determining the $650 million loss recorded in late 1995).
C. Other (income) expense, net consists of the following, in thousands:
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
Interest expense $16,500 $19,110 $34,000 $35,660
Equity (earnings) loss
from MascoTech, Inc. 5,570 (4,540) (3,300) (8,310)
Equity earnings, other (1,880) (2,470) (3,900) (4,730)
Interest income and gains
from marketable
securities and
cash investments (7,890) (3,930) (11,600) (6,110)
Other, net (4,230) (580) (2,400) (3,690)
$ 8,070 $ 7,590 $12,800 $12,820
4
<PAGE>
MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note C - Continued:
Interest expense for the three months and six months ended June 30, 1996
and 1995 is presented net of interest expense allocated to discontinued
operations of $8.9 million and $9.0 million and $19.8 million and $20.9
million, respectively.
The equity loss in the 1996 second quarter results from the Company's
equity share (approximately $11.7 million pre-tax) of losses regarding the
disposition of metal stamping businesses of MascoTech, Inc.
Included in equity earnings from MascoTech for the six months ended
June 30, 1996 is approximately $5.0 million of pre-tax income related
to a MascoTech accounting change in the first quarter of 1996.
Other, net in the 1996 second quarter includes an approximate $4.4
million gain from the sale of certain common shares of TriMas
Corporation.
Included in other, net for the six months ended June 30, 1995, was
a $15.9 million gain from the sale of the Company's investment in
Formica Corporation in the first quarter of 1995; this gain was largely
offset by charges for product line disposals.
D. Late in the second quarter of 1996, the Company acquired the Moore Group
Ltd., a United Kingdom manufacturer of kitchen and bath cabinets and
Horst Breuer GmbH, a German manufacturer of shower enclosures, for
approximately $100 million. The acquisitions were accounted for as
purchase transactions. These companies had combined annual net sales
in 1995 of approximately $100 million.
5
<PAGE>
MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
E. The following presents the combined unaudited financial statements of
the Company, MascoTech, Inc. and TriMas Corporation as one entity,
with Masco Corporation as the parent company. The statement of income
for the three months and six months ended June 30, 1995 and the
statement of cash flows for the six months ended June 30, 1995 have
been reclassified to present the Company's home furnishings products
segment as discontinued operations. The balance sheet as of June 30,
1996 and December 31, 1995 also reflects the home furnishings products
segment as discontinued operations. Intercompany transactions have
been eliminated. Amounts, except per share data, are in thousands.
Combined Balance Sheet
June 30, December 31,
Assets 1996 1995
Current assets:
Cash and cash investments $ 199,050 $ 169,240
Accounts and notes receivable, net 776,610 727,300
Prepaid expenses and other 55,740 56,280
Deferred income taxes 55,400 95,650
Net current assets of businesses
held for disposition 39,190 62,410
Inventories:
Finished goods 190,930 198,680
Raw material 236,570 230,290
Work in process 139,550 142,700
567,050 571,670
Total current assets 1,693,040 1,682,550
Equity investments in affiliates 207,090 199,330
Property and equipment, net 1,465,370 1,496,840
Excess of cost over acquired net assets 639,940 618,190
Net noncurrent assets of businesses held
for disposition 20,720 104,510
Net assets of discontinued operations 1,033,200 1,052,670
Other noncurrent assets 380,900 390,300
Total assets $5,440,260 $5,544,390
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 25,770 $ 31,050
Accounts payable 219,870 249,330
Accrued liabilities 462,520 406,570
Total current liabilities 708,160 686,950
Long-term debt 2,257,820 2,466,210
Deferred income taxes and other 279,960 271,030
Other interests in combined affiliates 480,850 464,770
Equity of shareholders of Masco Corporation 1,713,470 1,655,430
Total liabilities and
shareholders' equity $5,440,260 $5,544,390
6
<PAGE>
MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note E - Continued:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
Combined Statement of Income 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $1,286,260 $1,306,730 $2,566,050 $2,612,490
Costs and expenses, net:
Cost of sales 884,440 922,070 1,771,660 1,821,600
Selling, general and
administrative expenses 229,160 229,650 461,820 459,480
Charge on disposition of
businesses, net 29,520 1,000 31,520 2,500
Other (income) expense, net:
Interest expense 26,160 35,920 54,280 70,900
Other income, net (19,040) (18,170) (28,100) (30,520)
7,120 17,750 26,180 40,380
1,150,240 1,170,470 2,291,180 2,323,960
Income from continuing operations before
income taxes and other interests 136,020 136,260 274,870 288,530
Income taxes 60,580 60,130 119,250 126,310
Other interests in combined affiliates 7,440 18,720 28,700 34,890
Income from continuing operations 68,000 57,410 126,920 127,330
Income from operations of discontinued
segment (net of income taxes) --- 5,990 --- 10,470
Cumulative effect of an accounting
change, net --- --- 3,080 ---
Net income $ 68,000 $ 63,400 $ 130,000 $ 137,800
Earnings per share:
Continuing operations $.42 $.36 $.79 $.80
Discontinued segment -- .04 -- .07
Cumulative effect of an accounting change -- -- .02 --
Earnings per share $.42 $.40 $.81 $.87
Cash dividends declared and paid per share $.19 $.18 $.38 $.36
Average shares outstanding 160,500 158,800 160,500 158,800
</TABLE>
7
<PAGE>
MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (concluded)
Note E - Concluded:
Six Months Ended
June 30
Combined Statement of Cash Flows 1996 1995
Cash Flows From (For) Operating Activities:
Cash provided by continuing operations $ 230,080 $ 196,430
(Increase) in receivables (62,400) (88,900)
(Increase) decrease in inventories 8,860 (43,640)
Decrease in marketable securities, net 14,000 53,230
Decrease in prepaid expenses 1,370 14,970
Increase (decrease) in current liabilities 36,700 (42,440)
Total cash from operating activities 228,610 89,650
Cash Flows From (For) Investing Activities:
Capital expenditures (81,530) (126,930)
Acquisitions, net of cash acquired (104,470) (22,810)
Proceeds from sale of subsidiaries 184,020 37,400
Proceeds from sales of investments 23,870 ---
Proceeds from sale of Formica investment --- 74,470
Discontinued operations, net 19,470 (12,850)
Net assets held for disposition (820) 7,790
Other, net 48,070 33,980
Total cash from (for) investing activities 88,610 (8,950)
Cash Flows From (For) Financing Activities:
Increase in debt 301,140 543,710
Payment of debt (516,760) (590,650)
Cash dividends paid (71,790) (67,310)
Total cash (for) financing activities (287,410) (114,250)
Cash and Cash Investments:
Increase (decrease) for the period 29,810 (33,550)
At January 1 169,240 206,150)
At June 30 $ 199,050 $ 172,600
8
<PAGE>
MASCO CORPORATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SECOND QUARTER 1996 AND THE FIRST SIX MONTHS 1996 VERSUS
SECOND QUARTER 1995 AND THE FIRST SIX MONTHS 1995
Net sales from continuing operations increased 10 percent and 8 percent for
the second quarter and six months ended June 30, 1996, respectively, from the
comparable periods in 1995. After adjusting for a 1995 acquisition and
divestitures of two small operations, net sales for the second quarter and six
months ended June 30, 1996 increased 8 percent and 6 percent, respectively, from
the comparable 1995 periods.
Cost of sales as a percentage of sales increased to 63.1 percent from 62.9
percent and to 63.0 percent from 61.9 percent for the second quarter and six
months ended June 30, 1996, respectively, from the comparable periods in 1995;
these increases primarily reflect the influence of a higher percentage of lower
margin sales to total sales, under-utilized plant capacity and softness in the
Company's European markets. Selling, general and administrative expenses as a
percentage of sales decreased to 21.6 percent from 22.4 percent and to 21.9
percent from 22.1 percent for the second quarter and six months ended June 30,
1996, respectively, from the comparable periods in 1995; these decreases are
primarily the result of higher promotional and advertising costs in the prior
periods.
The Company's operating profit margins from continuing operations improved
in the second quarter of 1996 as compared with the second quarter of 1995 and
declined for the first six months of 1996 as compared with the first six months
of 1995.
Included in other (income) expense, net for the second quarter of 1996 were
equity losses from MascoTech, Inc. of $5.6 million, as compared with equity
earnings of $4.5 million for the comparable period of 1995. Excluding the
Company's $11.7 million pre-tax ($7.2 million after-tax) equity share of
MascoTech's second quarter charge resulting from the disposition of its metal
stamping businesses, second quarter 1996 equity earnings from MascoTech were
$6.1 million.
Equity earnings from MascoTech for the six months ended June 30, 1996 of
$3.3 million reflect the Company's equity share of the above-mentioned charge as
well as the Company's approximate $5.0 million equity share of MascoTech's first
quarter 1996 non-recurring income resulting from the cumulative effect of the
adoption of a new accounting rule. Excluding these unusual recordings, equity
earnings from MascoTech were $10.0 million for the six months ended June 30,
1996, as compared with equity earnings of $8.3 million for the comparable 1995
period.
Other (income) expense, net for the second quarter of 1996 includes a $4.4
million gain from the sale of certain common shares of TriMas Corporation and
gains aggregating $6.0 million from the sale of certain of the company's long-
term investments. Included in other, net for the six months ended June 30,
1995, was a $15.9 million gain from the sale of the Company's investment in
Formica Corporation in the first quarter of 1995; this gain was largely offset
by charges for product line disposals.
9
<PAGE>
After-tax income from continuing operations for the second quarter of 1996
increased 18 percent to $68.0 million from $57.4 million in the comparable 1995
period, and income from continuing operations per share increased 17 percent to
$.42 from $.36. After-tax income from continuing operations for the six months
ended June 30, 1996, increased 2 percent to $130.0 million from $127.3 million
in the comparable 1995 period, and income from continuing operations per share
increased 1 percent to $.81 from $.80.
Including discontinued operations, net income for the second quarter of
1996 increased 7 percent to $68.0 million from $63.4 million in the comparable
1995 period, and earnings per share increased 5 percent to $.42 from $.40.
Including discontinued operations, net income for the first six months of 1996
decreased 6 percent to $130.0 million from $137.8 million in the comparable
1995 period, and earnings per share decreased 7 percent to $.81 from $.87.
The Company's effective tax rate decreased to approximately 38 percent for
the second quarter of 1996 from 40 percent for the comparable period in 1995.
Such decrease reflects the reduced results of European operations as well as
the second quarter 1996 realization of capital gains from the sale of certain
of the Company's long-term investments which were offset by capital loss
benefits resulting from the disposition of the Company's home furnishings
products businesses.
On April 1, 1996, the Company entered into an agreement for the sale of its
home furnishings products businesses to Furnishings International Inc. The
Company classified its home furnishings products segment as discontinued
operations in late November 1995. Furnishings International's investors
currently include 399 Venture Partners, certain members of Furnishings
International's management, the Company and certain affiliates of Travelers
Group Inc.
On August 5, 1996, the Company finalized the sale of its home furnishings
products businesses to Furnishings International Inc. Total proceeds to Masco
from the sale are in excess of $1.0 billion with approximately $710 million of
the purchase price in cash. The balance consists of junior debt securities,
preferred stock and 15 percent of the common stock of Furnishings International.
In addition, Masco received certain transferable rights to acquire additional
equity in Furnishings International. The Company expects to realize an increase
of approximately $.04 in quarterly per share earnings related to additional
income from proceeds of the transaction.
The Company intends to use $550 million of the proceeds from the sale of
the home furnishings products businesses to reduce debt. The balance of the
proceeds will eventually be reinvested in the future growth of the Company.
The Company's Executive Vice President and President-Building Products,
Raymond F. Kennedy, was appointed as President and Chief Operating Officer in
August 1996. The Company's former President and Chief Operating Officer, Wayne
B. Lyon, has joined Furnishings International as its full-time Chairman,
President and Chief Executive Officer.
The Company has on file with the Securities and Exchange Commission, an
unallocated shelf registration pursuant to which the Company is able to issue up
to a combined $759 million of debt and equity securities.
10
<PAGE>
At June 30, 1996 current assets were 2.2 times current liabilities. First
and second quarter 1996 cash from operations was affected by an expected and
recurring first-half increase in accounts receivable. As the annual increase in
accounts receivable is historically experienced in the first half of the year,
cash flows from operations in the remaining two quarters of 1996 should not be
affected by significant increases in accounts receivable. The Company believes
that its cash flows from operations and, to the extent necessary, future
financial market activities and bank borrowings, are sufficient to fund its
working capital and other investment needs.
The Company's founder and Chairman Emeritus, Alex Manoogian, passed away on
July 10, 1996 at the age of 95.
11
<PAGE>
UNAUDITED INFORMATION REGARDING EQUITY AFFILIATES
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Equity investments in affiliates consist primarily of the following
approximate common stock and partnership interests at June 30:
1996 1995
MascoTech, Inc. 45% 44%
Hans Grohe, a German partnership 27% 27%
TriMas Corporation 4% 5%
The Company has an approximate 39 percent voting interest in MascoTech at
June 30, 1996, after including the voting interests of the preferred
stockholders of MascoTech.
The following presents the condensed financial data of MascoTech, Inc.
Amounts are in thousands.
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
Sales - Net $345,060 $439,290 $718,980 $884,300
Gross Profit $ 57,930 $ 69,250 $119,370 $145,710
Net Income (Loss)
(After Preferred
Stock Dividends) $ (9,900) $ 11,860 $ 9,300 $ 22,080
12
<PAGE>
PART II. OTHER INFORMATION
MASCO CORPORATION
Items 1, 2, 3, and 5 are not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on May 22, 1996 at which the three
nominees for the Company's Board of Directors identified in the Company's proxy
statement dated April 29, 1996 were elected, and the Board of Directors
recommendation of Coopers & Lybrand L.L.P. as independent auditors for the
Company for the year 1996 was approved. Following is a tabulation of shares
voted:
Election of Directors
Lillian Bauder(1) John A. Morgan(1) Joseph L. Hudson, Jr.
For 134,137,296 132,656,577 134,127,120
Withheld 7,322,650 8,803,369 7,332,826
(1) Re-elected
Ratification of the Selection of Coopers & Lybrand L.L.P. as
Independent Auditors for the Company for the Year 1996
For 141,058,751
Against 144,927
Abstentions and Broker Non-voters 256,268
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
11 - Computation of Earnings Per Share
12 - Computation of Ratio of Earnings to Fixed Charges
27 - Financial Data Schedule
(b) Reports on Form 8-K:
Report on Form 8-K dated April 1, 1996, reporting under Item 5
the issuance of a press release relating to the agreement to
sell the Company's Home Furnishings Group to Furnishings
International Inc. and the Company's first quarter 1996
results.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MASCO CORPORATION
(Registrant)
Date: August 13, 1996 By: /s/Robert B. Rosowski
Robert B. Rosowski
Vice President-Controller
(Chief Accounting Officer and
Authorized Signatory)
13
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MASCO CORPORATION
EXHIBIT INDEX
Exhibit
Exhibit 11 Computation of Earnings Per Share
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges
Exhibit 27 Financial Data Schedule
14
<PAGE>
Exhibit 11
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Primary and Fully Diluted Earnings Per Share
For the Three Months and Six Months Ended June 30, 1996 and 1995
(Amounts in thousands except per share data)
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
Shares for computation of primary
and fully diluted earnings
per share:
Weighted average number of
shares outstanding 160,500 158,800 160,500 158,800
Common stock equivalents:
Shares issuable assuming
conversion of debentures 4,200 4,200 4,200 4,200
Stock options 880 700 880 700
Total shares for primary
and fully diluted earnings
per share computation 165,580 163,700 165,580 163,700
Income from continuing operations $68,000 $57,410 $130,000 $127,330
Add back of debenture interest, net 1,400 1,400 2,900 2,900
Adjusted earnings from
continuing operations 69,400 58,810 132,900 130,230
Income from operations of
discontinued segment --- 5,990 --- 10,470
Earnings attributable to
common stock $69,400 $64,800 $132,900 $140,700
Primary and fully diluted earnings
per share:
Continuing operations $.42 $.36 $.80 $.80
Discontinued operations -- $.04 -- $.06
Primary and fully diluted
earnings per share $.42 $.40 $.80 $.86
Earnings per share as reported $.42 $.40 $.81 $.87
This calculation is submitted in accordance with Regulation S-K
Item 601(b)(11), although not required by APB Opinion No. 15, inasmuch as
dilution for any period was less than 3 percent.
Exhibit 12
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
(Thousands of Dollars)
Six
Months
Ended
June 30, Year Ended December 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Earnings Before Income Taxes
And Fixed Charges:
Income from continuing
operations before income
taxes $216,700 $351,790 $292,830 $349,190 $296,020 $125,140
Deduct/add equity in
undistributed (earnings)
losses of fifty-percent-
or-less-owned companies (3,120) (17,770) 106,200 (13,750) (13,210) 38,150
Add interest on indebtedness,
net 33,930 73,400 60,360 62,860 57,190 71,640
Add amortization of debt
expense 760 1,930 2,220 2,650 2,710 1,630
Add one-third of rentals 2,700 4,970 4,220 3,190 3,290 3,490
Earnings from continuing
operations before income
taxes and fixed charges $250,970 $414,320 $465,830 $404,140 $346,000 $240,050
Fixed charges:
Interest on indebtedness $ 35,330 $ 76,460 $ 63,220 $ 63,600 $ 69,890 $ 72,850
Amortization of debt expense 760 1,930 2,220 2,650 2,710 1,630
One-third of rentals 2,700 4,970 4,220 3,190 3,290 3,490
$ 38,790 $ 83,360 $ 69,660 $ 69,440 $ 75,890 $ 77,970
Ratio of earnings to fixed
charges 6.5 5.0 6.7 5.8 4.6 3.1
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MASCO
CORPORATION'S JUNE 30, 1996 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> JUN-30-1996 JUN-30-1995
<CASH> 73,030 42,790
<SECURITIES> 0 0
<RECEIVABLES> 492,600<F1> 442,830<F1>
<ALLOWANCES> 0 0
<INVENTORY> 399,360 416,020
<CURRENT-ASSETS> 1,038,040 960,010
<PP&E> 884,050<F1> 821,990<F1>
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 3,918,760 4,446,700
<CURRENT-LIABILITIES> 476,840 396,020
<BONDS> 1,622,040 1,678,840
0 0
0 0
<COMMON> 160,540 160,250
<OTHER-SE> 1,552,930 2,144,940
<TOTAL-LIABILITY-AND-EQUITY> 3,918,760 4,446,700
<SALES> 787,000 714,000
<TOTAL-REVENUES> 787,000 714,000
<CGS> 496,570 449,120
<TOTAL-COSTS> 496,570 449,120
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 16,500 19,110
<INCOME-PRETAX> 109,900 95,630
<INCOME-TAX> 41,900 38,220
<INCOME-CONTINUING> 68,000 57,410
<DISCONTINUED> 0 5,990
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 68,000 63,400
<EPS-PRIMARY> .42 .40
<EPS-DILUTED> .42 .40
<FN>
<F1>Receivables and property and equipment are presented net of allowances for
doubtful accounts and accumulated depreciation and amortization, respectively.
</FN>
</TABLE>
