What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-10 compared with 2025-02-11 · 155 added, 146 removed, 1086 unchanged (22% of the section changed)

39 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessments

As described in Notes A and H to the consolidated financial statements, the Company’s consolidated goodwill balance was $597 million as of December 31, 2024.

Management performs an annual impairment test of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Management compares the fair value of the reporting units to the carrying value of the reporting units for goodwill impairment testing.

If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized to the extent that a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.

Management determines fair value using a discounted cash flow method, which requires management to make significant estimates and assumptions related to forecasted sales and operating profits, long-term assumed annual growth rate, and the discount rate.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to forecasted sales for certain reporting units.

Revenue Recognition - Plumbing Products

As described in Notes A and D to the consolidated financial statements, the Company’s plumbing products revenue was $4,992 million for the year ended December 31, 2025.

The Company recognizes revenue as control of its products is transferred to its customers, which is generally at the time of shipment or upon delivery based on the contractual terms with its customers.

The Company provides customer programs and incentive offerings, which are considered variable consideration.

The Company includes in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved.

This determination is made based upon known customer program and incentive offerings at the time of sale and expected sales volume forecasts as it relates to the volume-based incentives.

The principal considerations for our determination that performing procedures relating to revenue recognition for plumbing products is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units;

(ii) evaluating the appropriateness of the discounted cash flow method;

(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow method;

and (iv) evaluating the reasonableness of the significant assumption used by management related to forecasted sales for certain reporting units.

Evaluating management’s assumption related to forecasted sales for certain reporting units involved evaluating whether the assumption used was reasonable considering (i) the current and past performance of certain reporting units;

(ii) the consistency with external market and industry data;

and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recording of plumbing products revenue as control is transferred to the customer.

These procedures also included, among others (i) evaluating certain revenue transactions by either (a) testing a sample of revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, proof of shipment, and cash receipts or (b) testing the issuance and settlement of invoices and credit memos, tracing transactions not settled to a detailed listing of accounts receivable, and testing the completeness and accuracy of data provided by management;

(ii) testing a sample of customer program and incentive transactions by obtaining and inspecting source documents, such as support for the nature of the customer program or incentive, amount, and agreement with the customer;

and (iii) confirming, on a sample basis, outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as invoices, proof of shipment, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

29 unchanged sentences

Commitments and contingencies (Note R)

Redeemable noncontrolling interest — 18

Masco Corporation's shareholders' equity:

26 unchanged sentences

Selling, general and administrative expenses 1,426 1,468 1,473

Impairment charges for goodwill and other intangible assets — 15 26

Impairment charges for other intangible assets 5 — 15

Operating profit 1,248 1,363 1,348

21 unchanged sentences

Net income attributable to Masco Corporation $ 810 $ 822 $ 908

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

Currency translation adjustment $ 122 $ ( 68 ) $ 35

Pension and other post-retirement benefits 4 8 ( 8 )

Other comprehensive (loss) income, net of tax ( 60 ) 27 ( 6 )

Other comprehensive (loss) income attributable to noncontrolling interest:

Other comprehensive income (loss), net of tax 126 ( 60 ) 27

Other comprehensive income (loss) attributable to noncontrolling interest:

Currency translation adjustment $ 27 $ ( 14 ) $ 5

Pension and other post-retirement benefits 2 2 ( 2 )

Other comprehensive (loss) income attributable to Masco Corporation $ ( 48 ) $ 24 $ ( 6 )

Other comprehensive income (loss) attributable to Masco Corporation $ 97 $ ( 48 ) $ 24

Total comprehensive income $ 984 $ 814 $ 987

11 unchanged sentences

Depreciation and amortization 148 150 149

Fair value adjustment to contingent earnout obligation — — ( 24 )

Deferred income taxes 64 28 ( 32 )

Employee withholding taxes paid on stock-based compensation 10 35 29

Loss on disposition of businesses, net 80 — 1

Loss on disposition of business, net — 80 —

(Gain) loss on disposition of property and equipment ( 5 ) 3 6

Pension and other post-retirement benefits ( 8 ) ( 7 ) ( 6 )

Impairment of goodwill and other intangible assets — 15 26

Impairment charges for other intangible assets 5 — 15

Stock-based compensation 30 39 31

(Increase) decrease in receivables ( 39 ) 42 ( 15 )

Decrease (increase) in inventories 4 233 ( 43 )

Decrease (increase) in receivables 19 ( 39 ) 42

(Increase) decrease in inventories ( 81 ) 4 233

Decrease in accounts payable and accrued liabilities, net ( 14 ) ( 95 ) ( 34 )

9 unchanged sentences

Payment of short-term borrowings — — ( 77 )

Proceeds from term loan — — 500

Payment of term loan — — ( 200 )

6 unchanged sentences

Acquisition of businesses, net of cash acquired — ( 4 ) ( 136 )

Proceeds from disposition of business, net of cash disposed 126 — —

Proceeds from disposition of:

Business, net of cash disposed — 126 —

Property and equipment 14 1 3

Other, net ( 3 ) ( 5 ) ( 7 )

2 unchanged sentences

CASH AND CASH INVESTMENTS:

(Decrease) increase for the year ( 1 ) 182 ( 474 )

Increase (decrease) for the year 14 ( 1 ) 182

At January 1 634 634 452

9 unchanged sentences

Balance, January 1, 2023 $ ( 262 ) $ 225 $ 16 $ ( 947 ) $ 226 $ 218

Total comprehensive income (loss) 900 — — 844 ( 6 ) 62

Total comprehensive income 987 — — 908 24 55

Shares issued 27 2 25 — — —

4 unchanged sentences

Dividends declared to noncontrolling interest ( 49 ) — — — — ( 49 )

Redeemable noncontrolling interest - redemption adjustment 2 — — 2 — —

Stock-based compensation 26 — 26 — — —

Balance, December 31, 2023 $ 98 $ 221 $ — $ ( 596 ) $ 249 $ 224

Total comprehensive income 987 — — 908 24 55

Total comprehensive income (loss) 814 — — 822 ( 48 ) 40

Shares issued 58 2 56 — — —

4 unchanged sentences

Dividends declared to noncontrolling interest ( 37 ) — — — — ( 37 )

Redemption of redeemable noncontrolling interest 4 — 4 — — —

Stock-based compensation 35 — 35 — — —

Balance, December 31, 2024 $ ( 53 ) $ 212 $ — $ ( 693 ) $ 201 $ 227

Total comprehensive income (loss) 814 — — 822 ( 48 ) 40

Total comprehensive income 984 — — 810 97 76

Shares issued 5 — 4 — — —

4 unchanged sentences

Dividends declared to noncontrolling interest ( 42 ) — — — — ( 42 )

Redemption of redeemable noncontrolling interest 4 — 4 — — —

Stock-based compensation 27 — 27 — — —

65 unchanged sentences

We determine if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use assets (“ROU assets”), accrued liabilities and noncurrent operating lease liabilities on our consolidated balance sheet.

Operating leases are included in operating lease right-of-use assets (“ROU assets”), accrued liabilities and noncurrent operating lease liabilities on our consolidated balance sheets.

Finance lease ROU assets are included in property and equipment, net, notes payable, and long-term debt on our consolidated balance sheets.

2 unchanged sentences

The ROU asset also includes any lease payments made prior to the commencement date and initial direct costs incurred, and is reduced by any lease incentives received.

We review our ROU assets as events occur or circumstances change that would indicate the carrying amount of the ROU assets are not recoverable and exceed their fair values.

We review our ROU assets at the asset group level as events occur or circumstances change that would indicate the carrying amount of the ROU assets are not recoverable and exceed their fair values.

If the carrying amount of the ROU asset is not recoverable from its undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value.

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Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives.

We review our intangible assets with finite useful lives as events occur or circumstances change that would more likely than not reduce the fair value of the assets below its carrying amount.

If the carrying amount of the assets is not recoverable from the undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value.

We review our intangible assets with finite useful lives at the asset group level as events occur or circumstances change that would more likely than not reduce the fair value of the amortizable intangible assets below its carrying amount.

If the carrying amount of the amortizable intangible asset is not recoverable from the undiscounted cash flows, then we would recognize an impairment loss for the difference between the carrying amount and the current fair value.

We evaluate the remaining useful lives of amortizable intangible assets at each reporting period to determine whether events or circumstances warrant a revision to the remaining periods of amortization.

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The liability is remeasured and adjusted at the end of each reporting period until the SARs are exercised and payment is made to the employees or the SARs expire.

In December 2019, our Compensation and Talent Committee of the Board of Directors (the "Compensation Committee") amended the terms of equity awards under our 2014 Long Term Stock Incentive Plan, which was subsequently replaced by our 2024 Long Term Stock Incentive Plan, to redefine retirement-eligibility as age 65 or age 55 with at least 10 years of continuous service for newly issued RSUs, stock options, phantom stock awards and SARs.

Compensation expense for equity awards granted in 2020 and thereafter is recognized ratably over the shorter of the vesting period, typically three years , or the length of time until the grantee becomes retirement eligible.

For grants prior to 2020, expense was recognized ratably over the shorter of the vesting period of the long-term stock awards, stock options and phantom stock awards, typically five years , or the length of time until the grantee became retirement-eligible, generally at age 65.

Under our 2024 Long Term Stock Incentive Plan, retirement-eligibility is defined as age 65 or age 55 with at least 10 years of continuous service for RSUs, stock options, phantom stock awards and SARs.

Compensation expense for equity awards is recognized ratably over the shorter of the vesting period, typically three years, or the length of time until the grantee becomes retirement eligible.

Expense for PRSUs is recognized ratably over the three-year vesting period of the units.

7 unchanged sentences

In our consolidated statements of cash flows, the cash flow from discontinued operations are not separately classified.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

ACCOUNTING POLICIES (Continued)

Income Taxes.

2 unchanged sentences

If, based upon all available evidence, both positive and negative, it is more likely than not our deferred tax assets will not be realized, a valuation allowance is recorded.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

ACCOUNTING POLICIES (Concluded)

We only recognize the tax benefits from income tax positions that have a greater than 50 percent likelihood of being sustained upon examination by the taxing authorities.

1 unchanged sentence

We record interest and penalties on our uncertain tax positions in income tax expense.

We record the tax effects of Global Intangible Low-taxed Income related to our foreign operations, if applicable, as a component of income tax expense in the period the tax arises.

We record the tax effects of Net Controlled Foreign Corporation Tested Income related to our foreign operations, if applicable, as a component of income tax expense in the period the tax arises.

We allocate our provision for income taxes between continuing operations and other categories of earnings.

1 unchanged sentence

Generally, a disproportionate tax effect will be eliminated and recognized in income tax expense when the circumstances upon which it is premised cease to exist.

We include payments for the purchase of transferable tax credits in our income tax expense and in our income taxes paid disclosure.

We include payments for the purchase of transferable tax credits in our income tax expense and in our income taxes paid disclosure in the jurisdiction in which the credits are claimed.

Recently Adopted Accounting Pronouncements.

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which requires additional disclosures regarding an entity's reportable segments, particularly regarding significant segment expenses, as well as information relating to the chief operating decision maker.

We adopted this standard on a retrospective basis for annual periods beginning January 1, 2024, and will adopt for interim periods within those annual periods beginning January 1, 2025.

The adoption of this guidance modified our disclosures, but did not have an impact on our financial position and results of operations.

In March 2023, the FASB issued ASU 2023-02, "Investments – Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” which permits an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received.

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 new standard did not have a material effect on our financial position or results of operations.

In September 2022, the FASB issued ASU 2022-04, "Liabilities – Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations,” which requires that an entity that uses a supplier finance program in connection with the purchase of goods or services disclose information about the program’s nature, activity during the period, changes from period to period, and potential magnitude.

We adopted this standard for annual periods on a retrospective basis, including interim periods within those annual periods, beginning January 1, 2023, except for the amendment on rollforward information, which was adopted prospectively for annual periods beginning January 1, 2024.

The adoption of this guidance modified our disclosures, but did not have an impact on our financial position and results of operations.

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 development costs once management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended.

ASU 2025-06 is effective on a prospective, modified transition, or retrospective basis for interim and annual reporting periods beginning January 1, 2028.

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 July 2025, the 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.

ASU 2025-05 is effective on a prospective basis for interim and annual reporting periods beginning January 1, 2026.

The adoption of this guidance is not expected to materially impact our financial position and results of operations.

In November 2024, the FASB issued ASU 2024-03, "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

ACCOUNTING POLICIES (Concluded)

In December 2023, the 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.

ASU 2023-09 is effective on a prospective basis for annual periods beginning January 1, 2025, with early adoption permitted.

The adoption of this guidance will modify our disclosures, but will not have an impact on our financial position and results of operations.

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.

7 unchanged sentences

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 sellers, respectively, any time after December 31, 2023.

The redemption value of the call and put option was the same and based on a floating EBITDA value.

The call and put options were determined to be embedded within the redeemable noncontrolling interest and were recorded as temporary equity in the condensed consolidated balance sheets.

We elected to adjust the redeemable noncontrolling interest to its full redemption amount directly into retained deficit.

In the first quarter of 2024, the sellers exercised their put option to sell the remaining 24.9 percent equity interest in ESS for € 13 million ($ 15 million).

32 unchanged sentences

Our contract assets generally become unconditional and are reclassified to receivables in the quarter subsequent to each balance sheet date.

Our contract asset balance was $ 2 million and $ 3 million at December 31, 2024 and 2023, respectively.

Our contract asset balance was $ 2 million at both December 31, 2025 and 2024.

We record contract liabilities primarily for deferred revenue.

1 unchanged sentence

Our contract liabilities are generally recognized to net sales in the immediately subsequent reporting period.

Our contract liability balance was $ 45 million at both December 31, 2024 and 2023.

Our contract liability balance was $ 57 million and $ 45 million at December 31, 2025 and 2024, respectively.

MASCO CORPORATION

17 unchanged sentences

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 net income were as follows, in millions:

The components of lease cost included in income before income taxes were as follows, in millions:

Year Ended December 31,

4 unchanged sentences

Finance lease cost:

Amortization of right-of-use assets 3 3 3

Amortization of ROU assets 2 3 3

Interest on lease liabilities — 1 1

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Operating leases (A)

Finance leases — — —

(A) Includes $ 6 million of ROU assets obtained in exchange for new lease obligations related to the acquisition of Sauna360 in 2023.

15 unchanged sentences

Long-term debt — 12 — 14

Gross ROU assets under finance leases recorded within property and equipment, net was $ 41 million at both December 31, 2024 and 2023.

Gross ROU assets under finance leases recorded within property and equipment, net was $ 31 million and $ 41 million at December 31, 2025 and 2024, respectively.

Accumulated amortization associated with these leases was $ 17 million and $ 25 million at December 31, 2025 and 2024, respectively.

23 unchanged sentences

Plumbing Products $ 694 $ ( 301 ) $ 393

Decorative Architectural Products (A)

Decorative Architectural Products

305 ( 75 ) 230

Total $ 999 $ ( 376 ) $ 623

(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.

MASCO CORPORATION

2 unchanged sentences

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, 2023 Accumulated Impairment Losses Net Goodwill At December 31, 2023 Acquisitions (B) Foreign Currency Translation Net Goodwill At December 31, 2024

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 366 ( 139 ) 227 4 — 230

Decorative Architectural Products (A)

305 ( 75 ) 230 — — 230

Total $ 973 $ ( 376 ) $ 597 $ — $ 26 $ 623

4 unchanged sentences

Total $ 1,043 $ ( 440 ) $ 604 $ 6 $ ( 12 ) $ 597

(B) In the third quarter of 2023, we acquired Sauna360 and during the third quarter of 2024, we recognized $ 2 million of goodwill in our Plumbing Products segment related to this acquisition (refer to Note B for additional information).

2 unchanged sentences

We completed our annual impairment testing of goodwill and other indefinite-lived intangible assets in the fourth quarters of 2025, 2024 and 2023.

We recognized a $ 5 million non-cash impairment charge within our Decorative Architectural Products segment to other indefinite-lived intangible assets in the fourth quarter of 2025 due to the loss of a customer in our paint applicator business.

We recognized a $ 15 million non-cash impairment charge within our Decorative Architectural Products segment to other indefinite-lived intangible assets in the fourth quarter of 2023 due to competitive market conditions and increased cost of capital in our lighting business.

We recognized a $ 19 million and $ 7 million non-cash impairment charge within our Decorative Architectural Products segment to goodwill and other indefinite-lived intangible assets, respectively, in the fourth quarter of 2022 due to competitive market conditions, higher inflationary costs and increased cost of capital in our lighting business.

There was no impairment of goodwill for any of our reporting units or of our other indefinite-lived intangible assets in any of these years, other than as disclosed above.

The carrying value of our definite-lived intangible assets wa s $ 140 million (net of accumulated amortization o f $ 102 million) at December 31, 2024 and $ 269 million (net of accumulated amortization of $ 120 million) at December 31, 2023 and principally included customer relationships with a weighted average amortization period of 13 years in 2024 and 16 years in 2023.

The carrying value of our definite-lived intangible assets wa s $ 128 million (net of accumulated amortization o f $ 92 million) at December 31, 2025 and $ 140 million (net of accumulated amortization of $ 102 million) at December 31, 2024 and principally included customer relationships with a weighted average amortization period of 13 years in both 2025 and 2024.

Amortization expense related to the definite-lived intangible assets wa s $ 20 million, $ 29 million and $ 31 million in 2025, 2024 and 2023, respectively.

4 unchanged sentences

2029 – $ 15 million and 2030 – $ 14 million.

The decrease in our indefinite-lived intangible assets and definite-lived intangible assets is primarily a result of the divestiture of Kichler.

MASCO CORPORATION

23 unchanged sentences

Salaries, wages and commissions 154 165

Employee retirement plans 56 66

Deferred revenue 57 45

Employee retirement plans 48 56

Operating lease liabilities (Note F) 47 43

1 unchanged sentence

Interest 29 29

Income taxes payable 28 32

Product returns 24 23

Property, payroll and other taxes 22 22

Insurance reserves 21 22

Property, payroll and other taxes 19 22

Income taxes payable 17 28

Total $ 761 $ 767

49 unchanged sentences

We repaid $ 300 million during 2022 and the remaining $ 200 million upon the maturity of the term loan on April 26, 2023.

Interest paid was $ 99 million in 2024 and $ 107 million in both 2023 and 2022.

Interest paid was $ 100 million, $ 99 million, $ 107 million in 2025, 2024 and 2023, respectively.

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, which are Level 1 inputs.

At both December 31, 2024 and 2023, the aggregate estimated market value of our short-term and long-term debt was approximately $ 2.6 billion, compared with the aggregate carrying value of $ 3.0 billion.

The aggregate estimated market value of our short-term and long-term debt at December 31, 2025 was approximately $ 2.7 billion, compared with the aggregate carrying value of $ 3.0 billion.

The aggregate estimated market value of our short-term and long-term debt at December 31, 2024 was approximately $ 2.6 billion, compared with the aggregate carrying value of $ 3.0 billion.

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, 2024, 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 ("SARs").

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:

4 unchanged sentences

Stock options 3 4 5

Long-term stock awards — 3 6

Phantom stock awards and stock appreciation rights 3 4 5

Long-term stock awards — — 3

Total $ 30 $ 39 $ 31

At December 31, 2024, 7.5 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.

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.

MASCO CORPORATION

17 unchanged sentences

Performance Restricted Stock Units.

Under our Long Term Incentive Program, we grant performance restricted stock units to certain senior executives.

These performance restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement over a three-year period of specified return on invested capital performance goals, an earning per share metric, and, beginning with the 2023 grant, a relative total shareholder return metric that have been established by our Compensation Committee for the performance period.

To receive the award, the recipient must be employed through the share award date.

Under our Long Term Incentive Program ("LTIP"), we grant performance restricted stock units to certain executives.

These performance restricted stock units will vest and share awards will be issued at no cost to the employees, subject to our achievement over a three-year period of specified return on invested capital performance goals, an earning per share metric, and a relative total shareholder return metric that have been established by our Compensation Committee for the performance period.

To receive the award, the participant must be employed through the share award date.

Except that, beginning with the 2025 grant, participants who conclude service and are retirement eligible or whose employment ends under certain qualifying conditions will receive an award, if the established performance goals for the respective LTIP are met, prorated to reflect the time the participant was employed during the applicable performance period.

Performance restricted stock units are granted at a target number;

based on our performance, the number of performance restricted stock units that vest can be adjusted downward to zero and upward to a maximum of 200 percent of the target number.

During 2024, we granted approximately 70,000 performance restricted stock units with a grant date fair value of approximately $ 75 per share, approximately 48,000 performance restricted stock units were issued and 6,000 performance restricted stock units were forfeited.

During 2023, we granted approximately 99,000 performance restricted stock units with a grant date fair value of approximately $ 52 per share, approximately 253,000 performance restricted stock units were issued and no performance restricted stock units were forfeited.

During 2025, we granted approximately 121,000 performance restricted stock units with a weighted average grant date fair value of approximately $ 71 per share, no performance restricted stock units were issued and 83,000 performance restricted stock units were forfeited.

At December 31, 2025, there were approximately 91,000 shares vested but unissued.

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The aggregate intrinsic value for options exercised during 2025, 2024 and 2023 was $ 4 million, $ 48 million and $ 26 million, respectively.

The weighted-average remaining term for options outstanding at December 31, 2024, 2023 and 2022 was seven years , six years and five years , respectively.

The weighted-average remaining term for options outstanding at December 31, 2025, 2024 and 2023 was six years , seven years and six years , respectively.

The following table summarizes information for stock options vested and expected to vest and exercisable (vested) stock options, shares in thousands:

11 unchanged sentences

Weighted-average remaining term 6 years 5 years 7 years 5 years 6 years 5 years

At December 31, 2024, 2023 and 2022, there was $ 1 million 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 two years at both December 31, 2024 and 2023 and one year at December 31, 2022.

Unrecognized compensation expense (using the Black-Scholes option pricing model at the grant date) related to unvested stock options was $ 2 million at December 31, 2025 and $ 1 million at both December 31, 2024 and 2023;

such options had a weighted average remaining vesting period of two years at December 31, 2025, 2024 and 2023.

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:

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STOCK-BASED COMPENSATION (Concluded)

Long-Term Stock Awards.

Prior to 2020, we granted long-term stock awards to our key employees and non-employee Directors.

Our long-term stock award activity was as follows, shares in thousands:

Year Ended December 31,

2024 2023 2022

Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value

Unvested stock award shares at January 1 79 $ 36 273 $ 38 608 $ 37

Vested ( 79 ) 36 ( 191 ) 40 ( 324 ) 37

Forfeited — — ( 3 ) 36 ( 11 ) 38

Unvested stock award shares at December 31 — $ — 79 $ 36 273 $ 38

The total market value (at the vesting date) of stock award shares which vested was $ 5 million, $ 10 million and $ 21 million during 2024, 2023 and 2022, respectively.

Phantom Stock Awards and Stock Appreciation Rights.

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employees are granted phantom stock awards and SARs.

In 2024, 2023 and 2022, we granted approximately 42,000 , 57,000 , and 74,000 shares, respectively, of phantom stock awards with an aggregate fair value of $ 3 million in both 2024 and 2023 and $ 4 million in 2022 and paid cash of $ 5 million in 2024 and $ 4 million in both 2023 and 2022 to settle phantom stock awards.

In 2025, 2024 and 2023, we granted approximately 47,000 , 42,000 , and 57,000 shares, respectively, of phantom stock awards with an aggregate fair value of $ 4 million in 2025 and $ 3 million in both 2024 and 2023 and paid cash of $ 4 million in 2025, $ 5 million in 2024 and $ 4 million in 2023 to settle phantom stock awards.

Information related to phantom stock awards was as follows, dollars in millions and shares in thousands:

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Equivalent common shares 85 96

We granted 22,000 shares of SARs in 2023 and no SARs were granted in 2024 and 2022.

No SARs were granted in 2025 and 2024 and we granted 22,000 SARs in 2023.

During 2025, 7,000 SARs were forfeited and 15,000 SARs remained outstanding, all of which were vested at December 31, 2025.

Long-Term Stock Awards.

Prior to 2020, we granted long-term stock awards to our key employees and non-employee Directors.

As of December 31, 2024, all long-term stock awards had vested.

The total market value (at the vesting date) of stock award shares which vested was $ 5 million and $ 10 million during 2024 and 2023, respectively.

EMPLOYEE RETIREMENT PLANS

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$ 58 $ 69 $ 78

Substantially all our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals.

MASCO CORPORATION

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EMPLOYEE RETIREMENT PLANS (Continued)

Substantially all our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals.

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:

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Recognized net loss — 1 1 1 — 1

Recognized prior service cost — — — — 1 —

Net periodic pension cost $ 2 $ 6 $ 2 $ 6 $ 3 $ 7

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This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings.

Real estate consists of Real Estate Investment Trusts and property funds.

Real Estate Investment Trusts are valued at the closing price reported on the active market on which the individual securities are traded.

Real estate property funds are valued based on the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data.

Real estate consists of property funds valued based on the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data.

There is no active trading market for these investments, and they are generally illiquid.

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International — 22 — 22

United States 3 — — 3

International — — 11 11

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Discount rate for net periodic pension cost 4.30 % 4.00 % 4.50 %

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

EMPLOYEE RETIREMENT PLANS (Concluded)

The discount rate for obligations for 2025, 2024 and 2023 is based primarily upon the expected duration of each defined-benefit pension plan's liabilities matched to spot rates along a high-quality corporate bond yield curve for the geography of the individual plans.

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At December 31, 2023, such rates for our defined‑benefit pension plans ranged from 1.9 percent to 5.0 percent, with the most significant portion of the liabilities having a discount rate for obligations of 3.2 percent or higher.

The increase in the weighted average discount rate from 2023 to 2024 is principally due to higher long-term interest rates in the bond markets.

The decrease in the weighted average discount rate from 2022 to 2023 is principally due to lower long-term interest rates in the bond markets.

The increase in the weighted average discount rate from both 2023 to 2024 and 2024 to 2025 is principally due to higher long-term interest rates in the bond markets.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

EMPLOYEE RETIREMENT PLANS (Concluded)

The asset allocation of the investment portfolio was developed with the objective of achieving our expected rate of return and reducing volatility of asset returns, and considered the freezing of future benefits.

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2031 - 2035 36 40

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SHAREHOLDERS' EQUITY

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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.

During 2022, we repurchased and retired 16.6 million shares of our common stock (including 0.6 million shares to offset the dilutive impact of restricted stock units granted in 2022) for $ 914 million.

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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.

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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 and, until the divestiture of Kichler in the third quarter of 2024, lighting fixtures, ceiling fans, landscape lighting and LED lighting systems.

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.

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Our CODM uses segment net sales and operating profit in assessing segment performance and deciding how to allocate resources by comparing budget to actual results and assessing year-over-year variances.

Subsequent to December 31, 2025, we announced that we will implement an internal reorganization to further streamline our business and optimize operations resulting in the integration of our Liberty Hardware (“Liberty”) business, a distributor of cabinet and other hardware and shower doors, into our Delta Faucet business.

Prior to this reorganization Liberty has historically been included in our Decorative Architectural Products segment.

As a result of the integration, beginning with our Quarterly Report on Form 10-Q for the period ending March 31, 2026, Liberty will be included in our Plumbing Products segment rather than our Decorative Architectural Products segment and we will also reflect the change in the comparable prior period.

MASCO CORPORATION

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SEGMENT INFORMATION (Continued)

Information by segment was as follows, in millions:

Information by segment as of December 31, 2025 was as follows, in millions:

Year Ended December 31, 2025

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Operating expenses (D)

Impairment charges for goodwill and other intangible assets — —

Impairment charges for other intangible assets

Corporate expenses (E)

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Operating expenses (D)

Impairment charges for goodwill and other intangible assets — 15

Impairment charges for other intangible assets

Corporate expenses (E)

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Operating expenses (D)

Impairment charges for goodwill and other intangible assets — 26

Impairment charges for other intangible assets

Corporate expenses (E)

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Year Ended December 31,

At December 31,

2025 2024 2023 2025 2024 2023 2025 2024 2023

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Investment in foreign subsidiaries 16 14

Net deferred tax asset at December 31 $ 24 $ 56

The net deferred tax asset consisted of net deferred tax assets (included in other assets) of $ 62 million and $ 88 million, and net deferred tax liabilities (included in other liabilities) of $ 38 million and $ 32 million, at December 31, 2024 and 2023, respectively.

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.

MASCO CORPORATION

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businesses that occurred in early 2024 which allowed for the utilization of certain loss carryforwards that were not previously recognized.

We continue to maintain a valuation allowance of $ 27 million and $ 33 million on certain state and foreign deferred tax assets as of December 31, 2024 and 2023, respectively, due primarily to cumulative loss positions in those jurisdictions.

We continue to maintain a valuation allowance of $ 27 million on certain state and foreign deferred tax assets as of both December 31, 2025 and 2024 due primarily to cumulative losses in those jurisdictions and net operating losses that are expected to expire unused.

Our capital allocation strategy includes reinvesting in our business, maintaining an investment grade credit rating, maintaining a relevant dividend and deploying excess free cash flow to share repurchases or acquisitions.

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Our deferred tax balance on investment in foreign subsidiaries reflects the impact of all taxable temporary differences, including those related to substantially all undistributed foreign earnings, except those that are legally restricted, and consists primarily of foreign withholding taxes.

Of the $ 65 million and $ 84 million deferred tax assets related to the net operating loss and tax credit carryforwards at December 31, 2024 and 2023, respectively, $ 46 million and $ 62 million, respectively, will expire within approximately 17 years and $ 19 million and $ 22 million, respectively, have no expiration.

A reconciliation of the U.S.

Federal statutory tax rate to the income tax expense on income before income taxes was as follows:

Of the $ 59 million and $ 65 million deferred tax assets related to the net operating loss and tax credit carryforwards at December 31, 2025 and 2024, respectively, $ 40 million and $ 46 million, respectively, will expire between 2026 and 2045, if unused, and $ 19 million for both periods have no expiration.

A reconciliation of income tax expense at the U.S.

Federal statutory tax rate to the income tax expense on income before income taxes was as follows, in millions:

Year Ended December 31,

2025 2024 2023

Income tax expense at U.S.

Federal statutory tax rate $ 238 21.0 % $ 244 21.0 % $ 260 21.0 %

State and local taxes, net of U.S.

Federal tax benefit 2 3 2

Higher taxes on foreign earnings 3 2 2

Valuation allowances — ( 2 ) —

State and local tax effects, net of U.S.

Federal tax benefit (A) :

State and local taxes 32 2.8 26 2.2 29 2.3

Valuation allowance ( 2 ) ( 0.2 ) ( 1 ) ( 0.1 ) ( 29 ) ( 2.3 )

Foreign tax effects:

Municipal taxes 15 1.4 19 1.6 17 1.3

Other 5 0.4 — — ( 3 ) ( 0.2 )

Other foreign jurisdictions 6 0.5 8 0.7 10 0.8

Effect of cross-border tax laws ( 1 ) ( 0.1 ) ( 4 ) ( 0.3 ) ( 4 ) ( 0.3 )

Tax credits ( 7 ) ( 0.6 ) ( 8 ) ( 0.7 ) ( 8 ) ( 0.6 )

Nontaxable or nondeductible items:

Stock-based compensation ( 2 ) ( 0.2 ) ( 10 ) ( 0.9 ) ( 6 ) ( 0.5 )

Other, net — ( 1 ) ( 1 )

Effective tax rate 25 % 22 % 24 %

Income taxes paid were $ 260 million, $ 328 million and $ 281 million in 2024, 2023 and 2022, respectively.

Nondeductible expense 3 0.3 9 0.8 6 0.5

Changes in unrecognized tax benefits ( 10 ) ( 0.9 ) 3 0.3 7 0.6

Other adjustments — — 1 0.1 ( 1 ) ( 0.1 )

Income tax expense $ 277 24.4 % $ 287 24.7 % $ 278 22.5 %

(A) The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, New Jersey, Illinois, and New York for 2025;

California, New York, New Jersey, Texas, and Michigan for 2024;

and California, Florida, Maryland, Georgia, Oregon, and Tennessee for 2023.

MASCO CORPORATION

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INCOME TAXES (Concluded)

Income taxes paid by jurisdiction, exceeding 5% of the total income taxes paid by year, were as follows, in millions:

Year Ended December 31,

2025 2024 2023

Federal $ 110 $ 160 $ 194

State and local 27 26 36

Corporate income tax 31 24 34

Schiltach municipal tax 15

Other 10 17 23

Other foreign jurisdictions 28 33 41

Total $ 236 $ 260 $ 328

A reconciliation of the beginning and ending liability for uncertain tax positions is as follows, in millions:

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Additions — 1

Reductions ( 1 ) —

Lapse of applicable statutes of limitation ( 21 ) ( 13 )

Settlement with tax authorities — ( 5 )

Balance at December 31 $ 73 $ 85

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Interest and penalties recognized in income tax expense were insignificant in years ended December 31, 2025, 2024 and 2023.

Of the $ 101 million and $ 97 million total liability for uncertain tax positions (including related interest and penalties) at December 31, 2024 and 2023, respectively, $ 97 million and $ 93 million are recorded in other liabilities, respectively, and $ 4 million and $ 4 million are recorded as a net offset to other assets, respectively.

Of the $ 88 million and $ 101 million total liability for uncertain tax positions (including related interest and penalties) at December 31, 2025 and 2024, respectively, $ 84 million and $ 97 million are recorded in other liabilities, respectively, and $ 4 million in both periods is recorded as a net offset to other assets.

We file income tax returns in the U.S.

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With few exceptions, we are no longer subject to state or foreign income tax examinations on filed returns for years before 2021.

As a result of tax audit closings, settlements and the expiration of applicable statutes of limitation in various jurisdictions within the next 12 months, we anticipate that it is reasonably possible the liability for uncertain tax positions could be reduced by approximately $ 13 million.

MASCO CORPORATION

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INCOME PER COMMON SHARE

Basic and diluted income per common share are computed by dividing net income attributable to common shareholders by the weighted average common shares outstanding in the period.

Reconciliations of the numerators and denominators used in the computations of basic and diluted income per common share were as follows, in millions:

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Net income $ 810 $ 822 $ 908

Allocation to redeemable noncontrolling interest — — ( 2 )

Allocation to unvested restricted stock awards — — —

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The two-class method of computing income per common share is an allocation method that calculates income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

For the years ended December 31, 2024, 2023 and 2022, we allocated dividends and undistributed earnings to the participating securities.

For the year ended December 31, 2025, diluted income per common share was calculated using the treasury stock method.

For the years ended December 31, 2024 and 2023, we allocated dividends and undistributed earnings to the participating securities under the two-class method.

The following stock options, restricted stock units and performance restricted stock units were excluded from the computation of weighted-average diluted common shares outstanding due to their anti-dilutive effect, in thousands:

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Settlements made (in cash or kind) during the year ( 41 ) ( 43 )

Other, net (including currency translation, acquisitions, and divestitures) ( 4 ) 2

Other, net (including currency translation and divestitures) 2 ( 4 )

Balance at December 31 $ 88 $ 81

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data