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Accounting Policies | 6 Months Ended
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Jun. 30, 2018
Accounting Policies [Abstract] |
Accounting Policies | 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, 2018, our results of operations and comprehensive income (loss) for the three-month and six-month periods ended June 30, 2018 and 2017, and cash flows and changes in shareholders' equity for the six-month periods ended June 30, 2018 and 2017. The condensed consolidated balance sheet at December 31, 2017 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Reclassification. Certain prior year amounts have been reclassified to conform to the 2018 presentation in the condensed consolidated financial statements. Income Tax Effects within Accumulated Other Comprehensive Income (Loss). The accounting guidance for income taxes requires us to allocate our provision for income taxes between continuing operations and other categories of earnings, such as other comprehensive income (loss). Subsequent adjustments to deferred taxes originally recorded to other comprehensive income (loss) may reverse in a different category of earnings, such as continuing operations, resulting in a disproportionate tax effect within accumulated other comprehensive income (loss). Generally, a disproportionate tax effect will be eliminated and recognized in income tax expense (benefit) when the circumstances upon which it is premised cease to exist. The disproportionate tax effect related to various defined-benefit pension plans will be eliminated from accumulated other comprehensive income (loss) at the termination of the related pension plans. The disproportionate tax effect relating to our interest rate swap hedge, which was terminated in 2012, will be eliminated from accumulated other comprehensive income (loss) upon the maturity of the related debt in March 2022. Recently Adopted Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board ("FASB") issued a new standard for revenue recognition, Accounting Standards Codification ("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. We adopted ASC 606 on January 1, 2018, under the full retrospective method of adoption. As a result of this adoption, net sales increased by $9 million and $10 million for the three-month and six-month periods ended June 30, 2017, respectively, and operating profit (and income before income taxes) increased by $7 million and $4 million for the three-month and six-month periods ended June 30, 2017, respectively, from what was previously reported. For full year 2017 and 2016, net sales decreased by $2 million and increased by $4 million, respectively, and operating profit (and income before income taxes) decreased by $1 million and increased by $2 million, respectively, from what was previously reported. We additionally have recasted our previously reported segment operating results at the end of this section. In January 2016, the FASB issued 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. We adopted ASU 2016-01 on January 1, 2018. The adoption of this standard did not have a material impact on our financial position or results of operations. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other than Inventory," which no longer allows the tax effects of intra-entity asset transfers (intercompany sales) of assets other than inventory to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new standard requires the tax expense from the sale of the asset in the seller's tax jurisdiction and the corresponding basis differences in the buyer's jurisdiction to be recognized when the transfer occurs even though the pre-tax effects of the transaction are eliminated in consolidation. We adopted ASU 2016-16 on January 1, 2018. The adoption of this standard did not have a material impact on our financial position or results of operations. A. ACCOUNTING POLICIES (Continued) In March 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which modifies the presentation of net periodic pension and post-retirement benefit cost ("net benefit cost") in the income statement and the components eligible for capitalization as assets. ASU 2017-07 requires retrospective application for certain aspects of the standard. We adopted ASU 2017-07 on January 1, 2018. As a result of the adoption, we reclassified $8 million and $15 million of net benefit cost from operating profit to other income (expense), net, within our results of operations for the three-month and six-month periods ended June 30, 2017, respectively. For full year 2017 and 2016, we reclassified $26 million and $32 million, respectively, of net benefit cost from operating profit to other income (expense), net, within our results of operations. We additionally have recasted our previously reported segment operating results at the end of this section. The adoption of the standard did not impact income before income taxes. In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting," which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. We adopted ASU 2017-09 on January 1, 2018. The adoption of this standard did not impact our financial position or results of operations; however, modification accounting is now required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. In February 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which permits a company to reclassify from accumulated other comprehensive income (loss) to retained earnings the disproportionate tax effects resulting from the Tax Cuts and Jobs Act of 2017 (“2017 Act”). We early adopted ASU 2018-02 on March 31, 2018. As a result of the adoption, in the first quarter of 2018 we decreased accumulated other comprehensive income (loss) and increased retained earnings (deficit) by the $59 million disproportionate tax effect caused by the 2017 Act. Impact of Adoption of ASC 606 and ASU 2017-07. The recasted impact of the adoptions of ASC 606 and ASU 2017-07 to our previously reported operating results and basic and diluted income per share was as follows, in millions (except per common share data):
| Year Ended December 31, 2016
| Net Sales |  | Operating Profit (Loss)
| As Reported |  | As Recasted |  | As Reported |  | As Recasted
Operations by segment: |  |  |  |  |  |  |
Plumbing Products | $ | 3,526 |  |  | $ | 3,529 |  |  | $ | 642 |  |  | $ | 654 |
Decorative Architectural Products | 2,092 |  |  | 2,092 |  |  | 430 |  |  | 433 |
Cabinetry Products | 970 |  |  | 970 |  |  | 93 |  |  | 97 |
Windows and Other Specialty Products | 769 |  |  | 770 |  |  | (3 | ) |  | (3 | )
Total | $ | 7,357 |  |  | $ | 7,361 |  |  | 1,162 |  |  | 1,181 |
General corporate expense, net |  |  |  |  | (109 | ) |  | (94 | )
Operating profit |  |  |  |  | $ | 1,053 |  |  | $ | 1,087 |
|  |  |  |  | Year Ended December 31, 2016
|  |  |  |  | As Reported |  | As Recasted
Net income attributable to Masco Corporation |  |  |  |  | $ | 491 |  |  | $ | 493 |
Income per common share attributable to Masco Corporation: |  |  |  |
Basic: |  |  |  |  | $ | 1.49 |  |  | $ | 1.49 |
Diluted: |  |  |  |  | $ | 1.47 |  |  | $ | 1.48 |
A. ACCOUNTING POLICIES (Continued)
| Three Months Ended March 31, 2017
| Net Sales |  | Operating Profit (Loss)
| As Reported |  | As Recasted |  | As Reported |  | As Recasted
Operations by segment: |  |  |  |  |  |  |
Plumbing Products | $ | 863 |  |  | $ | 872 |  |  | $ | 156 |  |  | $ | 162 |
Decorative Architectural Products | 505 |  |  | 496 |  |  | 101 |  |  | 94 |
Cabinetry Products | 231 |  |  | 231 |  |  | 16 |  |  | 16 |
Windows and Other Specialty Products | 178 |  |  | 179 |  |  | 6 |  |  | 8 |
Total | $ | 1,777 |  |  | $ | 1,778 |  |  | 279 |  |  | 280 |
General corporate expense, net |  |  |  |  | (26 | ) |  | (23 | )
Operating profit |  |  |  |  | $ | 253 |  |  | $ | 257 |
|  |  |  |  | Three Months Ended March 31, 2017
|  |  |  |  | As Reported |  | As Recasted
Net income attributable to Masco Corporation |  |  |  |  | $ | 140 |  |  | $ | 138 |
Income per common share attributable to Masco Corporation: |  |  |  |
Basic: |  |  |  |  | $ | 0.44 |  |  | $ | 0.43 |
Diluted: |  |  |  |  | $ | 0.43 |  |  | $ | 0.43 |
| Three Months Ended June 30, 2017 |  | Six Months Ended June 30, 2017
| Net Sales |  | Operating Profit (Loss) |  | Net Sales |  | Operating Profit (Loss)
| As Reported |  | As Recasted |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted
Operations by segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plumbing Products | $ | 949 |  |  | $ | 949 |  |  | $ | 198 |  |  | $ | 200 |  |  | $ | 1,812 |  |  | $ | 1,821 |  |  | $ | 354 |  |  | $ | 362 |
Decorative Architectural Products | 653 |  |  | 661 |  |  | 141 |  |  | 149 |  |  | 1,158 |  |  | 1,157 |  |  | 242 |  |  | 243 |
Cabinetry Products | 251 |  |  | 251 |  |  | 30 |  |  | 31 |  |  | 482 |  |  | 482 |  |  | 46 |  |  | 47 |
Windows and Other Specialty Products | 204 |  |  | 205 |  |  | 18 |  |  | 18 |  |  | 382 |  |  | 384 |  |  | 24 |  |  | 26 |
Total | $ | 2,057 |  |  | $ | 2,066 |  |  | 387 |  |  | 398 |  |  | $ | 3,834 |  |  | $ | 3,844 |  |  | 666 |  |  | 678 |
General corporate expense, net |  |  |  |  |  |  | (30 | ) |  | (26 | ) |  |  |  |  |  | (56 | ) |  | (49 | )
Operating profit |  |  |  |  |  |  | $ | 357 |  |  | $ | 372 |  |  |  |  |  |  | $ | 610 |  |  | $ | 629 |
|  |  |  |  |  |  | Three Months Ended June 30, 2017 |  | Six Months Ended June 30, 2017
|  |  |  |  |  |  |  |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted
Net income attributable to Masco Corporation |  | $ | 158 |  |  | $ | 163 |  |  | $ | 298 |  |  | $ | 301 |
Income per common share attributable to Masco Corporation: |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  | $ | 0.50 |  |  | $ | 0.51 |  |  | $ | 0.93 |  |  | $ | 0.94 |
Diluted: |  |  |  |  |  |  |  |  | $ | 0.49 |  |  | $ | 0.51 |  |  | $ | 0.92 |  |  | $ | 0.93 |
A. ACCOUNTING POLICIES (Continued)
| Three Months Ended September 30, 2017 |  | Nine Months Ended September 30, 2017
| Net Sales |  | Operating Profit (Loss) |  | Net Sales |  | Operating Profit (Loss)
| As Reported |  | As Recasted |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted
Operations by segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plumbing Products | $ | 951 |  |  | $ | 950 |  |  | $ | 175 |  |  | $ | 175 |  |  | $ | 2,763 |  |  | $ | 2,771 |  |  | $ | 529 |  |  | $ | 537 |
Decorative Architectural Products | 553 |  |  | 562 |  |  | 104 |  |  | 112 |  |  | 1,711 |  |  | 1,719 |  |  | 346 |  |  | 355 |
Cabinetry Products | 229 |  |  | 229 |  |  | 19 |  |  | 20 |  |  | 711 |  |  | 711 |  |  | 65 |  |  | 67 |
Windows and Other Specialty Products | 203 |  |  | 204 |  |  | 23 |  |  | 24 |  |  | 585 |  |  | 588 |  |  | 47 |  |  | 50 |
Total | $ | 1,936 |  |  | $ | 1,945 |  |  | 321 |  |  | 331 |  |  | $ | 5,770 |  |  | $ | 5,789 |  |  | 987 |  |  | 1,009 |
General corporate expense, net |  |  |  |  |  |  | (26 | ) |  | (22 | ) |  |  |  |  |  | (82 | ) |  | (71 | )
Operating profit |  |  |  |  |  |  | $ | 295 |  |  | $ | 309 |  |  |  |  |  |  | $ | 905 |  |  | $ | 938 |
|  |  |  |  |  |  | Three Months Ended September 30, 2017 |  | Nine Months Ended September 30, 2017
|  |  |  |  |  |  |  |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted
Net income attributable to Masco Corporation |  | $ | 148 |  |  | $ | 152 |  |  | $ | 446 |  |  | $ | 453 |
Income per common share attributable to Masco Corporation: |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  | $ | 0.47 |  |  | $ | 0.48 |  |  | $ | 1.40 |  |  | $ | 1.42 |
Diluted: |  |  |  |  |  |  |  |  | $ | 0.46 |  |  | $ | 0.48 |  |  | $ | 1.38 |  |  | $ | 1.41 |
| Three Months Ended December 31, 2017 |  | Year Ended December 31, 2017
| Net Sales |  | Operating Profit (Loss) |  | Net Sales |  | Operating Profit (Loss)
| As Reported |  | As Recasted |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted
Operations by segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plumbing Products | $ | 972 |  |  | $ | 961 |  |  | $ | 169 |  |  | $ | 165 |  |  | $ | 3,735 |  |  | $ | 3,732 |  |  | $ | 698 |  |  | $ | 702 |
Decorative Architectural Products | 494 |  |  | 487 |  |  | 88 |  |  | 83 |  |  | 2,205 |  |  | 2,206 |  |  | 434 |  |  | 438 |
Cabinetry Products | 223 |  |  | 223 |  |  | 25 |  |  | 25 |  |  | 934 |  |  | 934 |  |  | 90 |  |  | 92 |
Windows and Other Specialty Products | 185 |  |  | 182 |  |  | 5 |  |  | 4 |  |  | 770 |  |  | 770 |  |  | 52 |  |  | 54 |
Total | $ | 1,874 |  |  | $ | 1,853 |  |  | 287 |  |  | 277 |  |  | $ | 7,644 |  |  | $ | 7,642 |  |  | 1,274 |  |  | 1,286 |
General corporate expense, net |  |  |  |  |  |  | (23 | ) |  | (21 | ) |  |  |  |  |  | (105 | ) |  | (92 | )
Operating profit |  |  |  |  |  |  | $ | 264 |  |  | $ | 256 |  |  |  |  |  |  | $ | 1,169 |  |  | $ | 1,194 |
|  |  |  |  |  |  |  |  | Three Months Ended December 31, 2017 |  | Year Ended December 31, 2017
|  |  |  |  |  |  |  |  | As Reported |  | As Recasted |  | As Reported |  | As Recasted
Net income attributable to Masco Corporation |  | $ | 87 |  |  | $ | 80 |  |  | $ | 533 |  |  | $ | 533 |
Income per common share attributable to Masco Corporation: |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  | $ | 0.28 |  |  | $ | 0.25 |  |  | $ | 1.68 |  |  | $ | 1.68 |
Diluted: |  |  |  |  |  |  |  |  | $ | 0.27 |  |  | $ | 0.25 |  |  | $ | 1.66 |  |  | $ | 1.66 |
A. ACCOUNTING POLICIES (Concluded) Recently Issued Accounting Pronouncements. In February 2016, the FASB issued a new standard for leases, ASC 842, which changes the accounting model for identifying and accounting for leases. ASC 842 is effective for us for annual periods beginning January 1, 2019. We expect this standard to increase our total assets and total liabilities; however, we are currently evaluating the magnitude of the impact. We do not expect the standard to have a material impact on our results of operations. In preparation for the adoption of the standard, we have procured a third-party software to track and manage our leases and have trained our business units on the new standard and the use of the software. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which modifies the methodology for recognizing loss impairments on certain types of financial instruments, including receivables. The new methodology requires an entity to estimate the credit losses expected over the life of an exposure. Additionally, ASU 2016-13 amends the current available-for-sale security other-than-temporary impairment model for debt securities. ASU 2016-13 is effective for us for annual periods beginning January 1, 2020. We are currently evaluating the impact the adoption of this new standard will have on our financial position and results of operations. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities," which improves and simplifies accounting rules around hedge accounting and better portrays the economic results of an entity's risk management activities in its financial statements. ASU 2017-12 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 June 2018, the FASB issued ASU 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting," which modifies the accounting for share-based payment awards issued to nonemployees to largely align it with the accounting for share-based payment awards issued to employees. ASU 2018-07 is effective for us for annual periods beginning January 1, 2019. We do not expect the adoption of the standard will impact our financial position or results of operations.

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