MAS 10-K & 10-Q changes, risk factors and insider trading

•inflationary pressurespressures, including from duties and tariffs;

Variability in the cost and availability of our raw materials, componentcomponents and finished products could impact our results of operations and financial position.

We purchase substantial amounts of raw materials, components and finished products from outside sources, including international sources, and we manufacture certain of our products outside of the United States. Increases in the cost of the materials we purchase, including as a result of diminished availability, increased duties, tariffs and inflation or unfavorable fluctuations in currency exchange rates have increased and may in the future increase the prices for our products and negatively impact our results of operations and financial position. Further,In ourparticular, productionwe hashave beenexperienced and may continue to experience significantly higher costs as a result of increased duties and tariffs, mainly in the future be impacted if we or our suppliersPlumbing areProducts unable to procure our requirements for various raw materials, including, among others, brass, copper, resins, titanium dioxide and zinc. Elevated energy prices have increased and may in the future increase our production and transportation costs. In addition, water is a significant component of our architectural coatings products and may be subject to shortages and restrictions on supply in certain regions,segment, due to climate-relatedduties and tariffs related to China and other influences.international Thesejurisdictions factorsas couldwell adverselyas impactrelated ourto results of operations and financial position.materials.

It can be difficult for us to pass our cost increases on to our customers. Our existing arrangements with customers, competitive considerations and customer resistance to price increases may delay or make us unable to adjust selling prices. If we are not able to sufficiently increase the prices of our products or achieve cost savings to offset increased material, production, transportation and labor costs, our results of operations and financial position could be adversely impacted. Increased selling prices for our products have led and may in the future lead to sales declinesdeclines, a shift in the mix of products we sell and loss of market share, particularly if those prices are not competitive. When our material costs decline, we have received and may in the future receive pressure from our customers to reduce our prices. Such reductions have had and could in the future have an adverse impact on our results of operations and financial position.

The operations of the third parties on which we depend have been and could in the future be impacted by: changing laws, regulations and government policies, including those related to climate change; cybersecurity breaches; labor availability; raw material shortages; trade policies; energy availability; supply disruptions; and adverse weather conditions, pandemics, social or civil unrest, wars or conflicts and other force majeure events. Any of these factors could disrupt our third parties’ operations and result in shortages of supply, assertion of force majeure and increases in the prices charged to us for the raw materials, components and finished products they produce or services they provide. Sourcing these goods and services from alternate suppliers, including suppliers from new geographic regions, or re-engineering our products as a result of supplier disruptions, can beis time-consuming and costly and could result in inefficiencies or delays in our business operations or could negatively impact the quality of our products. In addition, the loss of critical suppliers, or a substantial decrease in the availability of supply, has disrupted and could in the future disrupt our business and has had and may in the future have an adverse impact on our results of operations and financial position.

We are also affected by domestic and international laws, regulations and government policies applicable to companies doing business outside of the U.S., or importing and exporting goods and materials. These include laws and regulations related to anti-bribery/anti-corruption, competition, data privacy, environmental, social and governance (“ESG”)sustainability matters, sanctions, tax, trade, including duties and tariffs, and other business practices. Compliance with these laws, regulations and government policies is costly,costly and has required significant management attention, and future changes to these laws may continue to require significant management attention and disrupt our operations. Additionally, while it is difficult to assess what changes may occur and the relative effect on our international tax structure, significant changes in how U.S. and international jurisdictions tax cross-border transactions could adversely impact our results of operations and financial position.

The long-term performance of our businesses relies on our ability to attract, develop and retain a talented and diverse workforce.

For our businesses to be successful, we must invest significant resources to attract, develop and retain highly qualified, talentedqualified and diversetalented employees, who have the experience, knowledge and expertise to implement our strategic and business initiatives. We compete for employees with a broad range of employers in many different industries, including large multinational firms. We have faced and may in the future face challenges in recruiting, developing, engaging and retaining employees, particularly when the labor market is experiencing low unemployment levels, increasing compensation and increasing competition.

If we are unable to successfully implement our talent strategies, including attracting, developing, engaging and retaining key employees, building strong and diverse leadership teams, developing effective succession planning and successfully executing organizational change and leadership transition, our results of operations and financial position could be adversely impacted.

Furthermore, stakeholders are increasingly scrutinizing companies' ESG practices, and stakeholders’ expectations regarding ESGcompany practicespractices, positions or public statements are diverse and rapidlycontinually changing. We may not be able to align our ESG practices with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs. In addition,particular, we may not be able to achieve our aspirational goals related to our ESGsustainability initiatives, which are and may continue to be impacted by many complexities and variables, such as renewable energy infrastructure and availability, a challenging economic environment, changes to our operations and changes to our portfolio of businesses via acquisitions or divestitures. A failure or perceived failure by us in this regard may damage our reputation and adversely impact our results of operations and financial position.

Our products face significant competition. We believe that brand reputation is an important factor affecting product selection and that we compete on the basis of product features, innovation, quality, customer service, warranty and price. We sell our products through home center retailers, online retailers, distributorsdistributors, wholesalers and independent dealers and rely on these customers to market and promote our products to consumers. Our success with our customers is dependent on, among other things, our ability to provide quality products with desired features at acceptable prices with timely delivery and a high level of customer service. Home center retailers, which have historically concentrated their sales efforts on retail consumers and remodelers, are increasingly selling directly to professional contractors and installers, which may adversely impact our margins on our products that contractors and installers would otherwise buy through our dealers and wholesalers. In addition, as home center retailers develop customer experience programs to attract and retain contractors and installers, they are relying on us to support their efforts. Such support has been and could continue to be time-consuming and costly and these efforts may not be successful, which may impact our growth, results of operations and financial position.

The growing e-commerce channel brings an increased number of competitors and greater pricing transparency for consumers,consumers and customers, as well as conflicts between our existing distribution channels and a need for different distribution methods. These factors have impacted and could in the future impact our results of operations and financial position. In addition, our relationships with our customers, including home center retailers, may be impacted if we increase the amount of business we transact in the e-commerce channel.

Our sales are concentrated with three significant customers and this concentration may continue to increase. In 2024,2025, our net sales to The Home Depot were $3.0$2.9 billion (approximately 38 percent of our consolidated net sales), and our net sales to Ferguson and Lowe’s were each less than 10 percent of our consolidated net sales. These customers can significantly impact the prices we receive for our products and the terms and conditions on which we do business with them. Additionally,Further, these customers have reduced in the past and may in the future reduce the number of vendors from which they purchase and could make significant changes in their volume of purchases from us. Although other retailers, dealers, distributorsdistributors, wholesalers and homebuilders represent other channels of distribution for our products and services, we might not be able to quickly replace, or replace at all, the loss of a substantial portion of our sales to The Home Depot or the loss of all of our sales to either Ferguson or Lowe’s. Any such loss would have a material adverse impact on our business, results of operations and financial position.

In addition, our Behr business grants to The Home Depot Behr brand exclusivity in the retail sales channel in North America and exclusivity with respect to TheKilz Homebranded Depot,primer products in the home improvement big box retail sales channel and fromacross online only mass market retail marketplaces in the United States and in the retail sales channel in Canada. From time to time, certain of our other businesses grant product and/or brand exclusivity to our customers. The granting of exclusivity impacts our ability to sell those products and brands to other customers and can increase the complexity of our product offerings and our costs.

Global cybersecurity vulnerabilities, threats and more frequent, sophisticated and targeted attacksattacks, which may be increasingly exacerbated by the proliferation of and advance in artificial intelligence, pose a risk to our information technology systems and to critical third-party information technology platforms we utilize. We have implemented security policies, processes and layers of defense designed to help identify and protect against misappropriation or corruption of our systems and information and disruption of our operations. Despite these efforts, systems we utilize have been and may in the future be damaged, disrupted, ransomed or shut down due to cybersecurity attacks by unauthorized access, malware, ransomware, undetected intrusion, hardware failures, or other events, and in these circumstances our disaster recovery plans may be ineffective or inadequate.

In addition, we could be adversely impacted if any of our significant customers, suppliers or service providers experiencesexperience any similar events that disrupt their business operations or damage their reputation. Such events could adversely impact our results of operations and financial position.

We rely on many on-site and cloud-based information systems and technology to process, transmit, store and manage information to support our business activities. We have been and may in the the future be adversely impacted if these information systems breakdown, fail, or if delays in system upgrades or replacements stretch those systems beyond support by third-party service providers, including cloud platform providers.

In addition to the consequences that may occur from interruptions in the current systems we utilize, we continue to invest in new technology systems throughout our company, including implementations and integrations of and upgrades to critical systems at our business units. SystemThese implementationssystem and upgradeschanges are complex and require significant management oversight, and we have experienced, and in the future may experience, unanticipated expenses and interruptions to our operations during these implementations and upgrades.changes. Our results of operations and financial position, as well as the effectiveness of our internal controls over financial reporting, could be adversely impacted if we do not appropriately select, implement, maintain or upgrade our critical systems in a timely manner or if we experience significant unanticipated expenses or disruptions in connection with the implementation, integration, upgrade or update of such systems.

Protecting our intellectual property is important to our growth and innovation efforts. We own a number of patents, trademarks and other forms of intellectual property in our products and manufacturing processes throughout the world. There can be no assurance that our efforts to protect our intellectual property rights will prevent violations. Our intellectual property has been and may again be challenged or infringed upon by third parties, particularlyincluding in countries where property rights are not highly developed or protected. In addition, the global nature of our business increases the risk that we may be unable to obtain or maintain our intellectual property rights on reasonable terms. Furthermore, others have asserted and may in the future assert intellectual property infringement claims against us. Current and former employees, contractors, customers or suppliers have or may have had access to proprietary or confidential information regarding our business operations that could harm us if used by them, or disclosed to others, including our competitors. In addition, we may be harmed if our proprietary or confidential information regarding our business is exposed through the unauthorized use of artificial intelligence technologies. Protecting and preventing the unauthorized use of our intellectual property is costly, time consumingtime-consuming and requires significant resources. If we are not able to protect our existing intellectual property rights, or prevent unauthorized use of our intellectual property, sales of our products may be impacted and we may experience reputational damage to our brands, increased litigation costs and adverse impact to our competitive position, which could adversely impact our results of operations and financial position.

We continue to pursue our strategy of driving the full potential of our core businesses, leveraging opportunities across our enterprise, and actively managing our portfolio. We remain confident in the fundamentals of our business and long-term strategy. We execute our strategy by investing in our brands, developing innovative products, making capital investments, and focusing on continuous productivity improvement and operational excellence, among other initiatives. We believe that our strong financial position and cash flow generation, together with our investments in our industry-leading branded building products, our continued focus on innovation and customer service and disciplined capital allocation, will allow us to drive long-term growth and create value for our shareholders.

We continue to leverage the Masco Operating System, our methodology to drive growth and productivity, and continuous improvement initiatives across our enterprise to identify additional opportunities to improve our business operations. From time to time, we may take actions to drive efficiency in the business focused on the strategic rationalization of our businesses, including business consolidations, plant closures, headcount reductions and other cost savings initiatives. In the fourth quarter of 2025, we began implementing various restructuring actions to further streamline our business, reduce headcount, and optimize operations. In connection with these actions, we incurred charges of approximately $18 million in the fourth quarter of 2025, and we expect to incur approximately $50 million in additional charges in 2026. Additionally, subsequent to December 31, 2025, we announced that we will implement an internal reorganization 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. 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.

Due to changing market conditions, we are experiencing, and may continue to experience, lower market demand for our products. We also have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. WeAdditionally, aimwe have been experiencing, and may continue to offsetexperience, significantly higher costs to us, principally in our Plumbing Products segment, due to the potentialrecently enacted tariffs, particularly those related to China. We seek to mitigate the impact of higher tariffs and other unfavorable impact ofto our elevatedcosts costsover time with pricing, cost savings initiatives, sourcing changes, and lowerother activities. Consumer demand for our products, however, could further diminish if consumer confidence erodes and the price of our products with productivity improvements, pricing, and other initiatives.consumer goods increases.

Our net sales for 20242025 were $7,828$7,562 million, which decreased twothree percent compared to 2023.2024. Excluding acquisitions, divestitures,divestitures and the effect of currency translation, net sales decreased onetwo percent. Our net sales for 20242025 decreased primarily due to lower sales volume ofacross Norththe Americaentire plumbing products, lower net selling prices of decorative architectural products, and unfavorable sales mix of plumbing productscompany which each decreased sales by onefour percent. These amounts werepercent, partially offset by higher net selling prices of plumbing products which increased sales by onetwo percent.

Our selling, general and administrative expenses for 20242025 were $1,468$1,426 million, which remaineddecreased flatthree compared to 2023. Selling, generalpercent, and administrative expenses were positively impacted by onethree percent each due to the divestiture of Kichler in the third quarter of 2024 and lower sales commissions, mostly offset by twoone percent due to higherlower employee-related costs.costs, partially offset by one percent due to unfavorable foreign currency translation.

Our operating profit for 20242025 was $1,363$1,248 million, which increaseddecreased oneeight percent, and was positivelynegatively impacted by thedecreased non-recurrencegross ofprofit and an impairment charge for other intangible assetsassets, inpartially 2023.offset by lower selling, general and administrative expenses.

Other, net included a loss on the sale of Kichler Lighting ("Kichler") of $88 million, inclusive of costs to sell, for the year ended December 31, 2024.

The following tabletables setsset forth our net sales and operating profit information by Business Segment, dollars in millions.

Net sales in the Plumbing Products segment wereincreased flatthree percent in 2024.2025. In local currencies (including sales in currencies outside their respective functional currencies), net sales increased onetwo percent in 2024.2025. HigherNet sales increased three percent due to higher net selling pricesprices, increasedpartially sales by two percent and the acquisition of Sauna360 Group Oy ("Sauna360") in 2023 increased salesoffset by one percent.percent Thesedue increases were mostly offset byto lower sales volume and unfavorable sales mix which each decreased sales by one percent.volume.

Operating profit in the Plumbing Products segment in 20242025 was positivelynegatively impacted by costhigher savings initiativescommodity and tariff costs, an increase in other expenses (including inventory-related reserves), lower sales volume, unfavorable sales mix, an increase in strategic growth investments, and higher marketing costs, partially offset by higher net selling prices, partiallycost offsetsavings by higher commodity costs, unfavorable sales mix, lower sales volumeinitiatives, and higherthe employee-relatedgain costs.on the sale of a building.

Net sales in the Decorative Architectural Products segment decreased five14 percent in 2024,2025, primarily due to lower sales volume which decreased net sales by eight percent and the divestiture of Kichler inwhich the third quarter of 2024, lowerdecreased net selling prices across the segment and lower sales volume of builders' hardware products, partially offset by highersix sales volume of paints and other coating products.percent.

Operating profit in the Decorative Architectural Products segment in 20242025 was negatively impacted by lower netsales selling pricesvolume and thehigher non-recurrencecommodity ofand thetariff receipt of an insurance settlement payment in 2023,costs, partially offset by cost savings initiatives, the non-recurrence of an other intangible asset impairment charge in 2023initiatives and lower salesmarketing commissions.costs.

We had cash and cash investments of approximately $647 million and $634 million at both December 31, 20242025 and 2023.2024, respectively. Our cash and cash investments consist of overnight interest bearing money market demand accounts, time deposit accounts, and money market mutual funds containing government securities and treasury obligations. While we attempt to diversify these investments in a prudent manner to minimize risk, it is possible that future changes in the financial markets could affect the security or availability of these investments. Of the cash and cash investments we held at December 31, 20242025 and 2023,2024, $321$306 million and $323$321 million, respectively, was held in our foreign subsidiaries. If these funds were needed for our operations in the U.S., their repatriation into the U.S. would not result in significant additional U.S. income tax or foreign withholding tax, as we have recorded such taxes on substantially all undistributed foreign earnings, except for those that are legally restricted.

We continue to invest in our manufacturing and distribution operations to increase our productivity, improve customer service and support product innovation. Capital expenditures for 20242025 were $168$156 million, compared with $243$168 million for 2023.2024. The decrease in capital expenditures in 20242025 was primarily due to a capacity expansion plansinvestment in our Plumbing Products and Decorative Architectural Products segmentssegment in 2023.2024. For 2025,2026, capital expenditures, excluding any potential future acquisitions, are expected to be approximately $175$190 million. Depreciation and amortization expense for 20242025 totaled $150$148 million, compared with $149$150 million for 2023.2024. For 2025,2026, depreciation and amortization expense, excluding any potential future acquisitions, is expected to be approximately $150$160 million. Amortization expense totaled $23 million in 2025, compared with $32 million in 2024, compared with $34 million in 2023.2024.

Effective October 20, 2022, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock, exclusive of excise tax, in open-market transactions or otherwise. We repurchased and retired 10.08.5 million shares of our common stock in 20242025 for approximately $757$576 million, inclusive of excise tax of $6$5 million. This included 0.50.3 million shares to offset the dilutive impact of restricted stock units granted in 2024.2025. At December 31, 2024,2025, we had $896$325 million remaining under the 2022 authorization. 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. Consistent with past practice and as part of our long-term capital allocation strategy, outside of any potential acquisitions, we anticipate using approximately $600 million of cash for share repurchases (including shares which will be purchased to offset any dilution from restricted stock units granted as part of our compensation programs) in 2025.2026. Refer to Note N to the consolidated financial statements for additional information.

As part of our capital allocation strategy, the Board of Directors declared a quarterly dividend of $0.31$0.32 per share in the first quarter of 20252026 with the intention to increase the annual dividend 7three percent to $1.24$1.28 per share.

Net cash provided by operations was $1,075$1,022 million, primarily driven by operating profit,profit and the change in deferred taxes as a result of the cash tax benefit associated with immediate expensing of qualified fixed assets and research and development expenditures from the enactment of the One Big Beautiful Bill Act, partially offset by changes in working capital.

Net cash used for financing activities was $1,017$888 million, primarily due to $751$571 million for the repurchase and retirement of our common stock, $254$261 million for the payment of cash dividends, $37and $45 million for dividends paid to noncontrolling interest, $35 million for employee withholding taxes paid on stock-based compensation, and $15 million for the purchase of the remaining equity interest in Easy Sanitary Solutions B.V. These uses of cash were partially offset by $79 million of proceeds from the exercise of stock options.interest.

Net cash used for investing activities was $50$144 million, primarily driven by $168$156 million of capital expenditures, partially offset by $126 million of proceeds from the sale of Kichler.expenditures.

(B)Includes purchase commitments for vendor contracts and contracts for the purchase of renewable energy creditscertificates and transferable tax credits. Excludes contracts that do not require volume commitments and open or pending purchase orders.

In the fourth quarter of 2024,2025, we estimatedrecognized thata $5 million non-cash impairment charge related to a registered trademark within our Decorative Architectural Products segment due to the future discounted cash flows projected for allloss of a customer in our paint applicator business. As of December 31, 2025, the impaired other indefinite-lived intangible assetsasset werehad greatera thanremaining thenet carrying values.value Accordingly,of we$2 did not recognize any impairment charges for other indefinite-lived intangible assets.million. A 10 percent decrease in the estimated fair value of our other indefinite-lived intangible assets would not have resulted in aan $1additional millionimpairment, impairmentexcept offor onethe ofpreviously ourmentioned otherregistered indefinite-lived intangible assets.trademark.

Due to a dynamic geopolitical and macroeconomic environment, we are experiencing, and may continue to experience, lower market demand for our products. We have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. Additionally, we have been experiencing, and may continue to experience, significantlyelevated higher costs to us,costs, principally in our Plumbing Products segment, due to tariffs, particularly those related to China. We seek to mitigate the impact of higherelevated tariffs and other costs over time with pricing, cost savings initiatives, sourcing changes, and other activities. Consumer demand for our products, however, could further diminish if consumer confidence erodes and the price of our products and other consumer goods increases. We are monitoring developments following the recent Supreme Court ruling related to tariffs imposed under the International Emergency Economic Powers Act, which may create the potential for previously paid tariffs to be refunded by the U.S. government; however, the ability to recover, and the timing and amount of any potential refunds are uncertain, and at this time we cannot reasonably estimate the financial impact to us, if any. As of March 31, 2026, we have not recognized any amounts associated with potential refunds related to these tariffs.

We continueplan to executedeliver ourabove-market strategiestop- ofand bottom-line growth through a consumer driven strategy leveraging our strong brand portfolio, our industry-leading positionsbrands, expanded commercial capabilities, and theenhanced Mascooperational Operating System, our methodology to drive growth and productivity, to create long-term shareholder value.excellence. We remain confident in the fundamentals of our business and long-term strategy. We believe that our strong financial position and cash flow generation, together with our investments in our industry-leading branded building products, our continued focus on innovation and customer service and disciplined capital allocation, will allow us to drive long-term growth and create value for our shareholders.

From time to time, we take actions to drive efficiency in our business through the strategic rationalization of our businesses, including business consolidations, plant closures, headcount reductions and other cost savings initiatives. In the fourth quarter of 2025, we began implementing various restructuring actions to further streamline our business, reduce headcount, and optimize operations. In connection with these actions, we incurred approximately $8$12 million and $20 million in charges in the firstthree quarterand ofsix 2026months ended June 30, 2026, respectively, and we expect to incur approximately $50 million in charges during the full year of 2026. Additionally, in the first quarter of 2026, we began the implementation of an internal reorganization 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. As a result of the integration, all segment information herein, including comparable prior periods, include Liberty in our Plumbing Products segment rather than our Decorative Architectural Products segment.

FIRSTSECOND QUARTER 2026 VERSUSAND THE FIRST QUARTERSIX 2025MONTHS 2026 VERSUS

We report our financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). However, we believe that certain non-GAAP performancefinancial measures and ratios used in managing the business may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAPThese performancenon-GAAP financial measures and ratios should be viewedconsidered in addition to, and not as an alternative for,for ouror superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported resultsby underother GAAP.companies. Within the tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.

The following discussion of consolidated results of operations refers to the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods of 2025.

Below is a summary of our net sales, in millions, for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our net sales for the three months ended MarchJune 31,30, 20262026, were $1,918$1,992 million, which increaseddecreased sixthree percent compared to the three months ended MarchJune 31,30, 2025. Excluding the effect of currency translation, net sales increaseddecreased fourthree percent, primarily due to lower North America sales volume, which decreased sales by five percent, partially offset by higher net selling prices across the entire company, which increased sales by fiveone percent, partiallyand offsethigher by lowerInternational sales volume of paints and other coating products,volume, which decreasedincreased sales by one percent.

Below is a summary of our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our gross profit for the three months ended MarchJune 31,30, 20262026, was $686$868 million, an increase of seven12 percent, and was positively impacted by 14lower tariff costs (inclusive of IEEPA tariff refunds), cost savings initiatives, and three percent due to higher net selling pricesprices, acrosspartially theoffset entireby company,five percent due to lower sales volume, as well as cost savings initiatives, partially offset by higher commodity and tariff costs andcosts, an increase in other expenses.expenses, and unfavorable sales mix.

Our selling, general and administrative expenses for the three months ended MarchJune 31,30, 20262026, were $369$397 million, an increase of three10 percent, and were negatively impacted by threesix percent due to unfavorableincreased foreignemployee-related currencycosts translation, partially offset byand one percent due to lowerincreased employee-relatedlegal costs.and professional fees, as well as an increase in other expenses.

Our operating profit for the three months ended MarchJune 31,30, 20262026, was $316$470 million, an increase of 1014 percent, and was positively impacted by increased gross profit, partially offset by higher selling, general and administrative expenses. These results were inclusive of the net tariff benefit from IEEPA tariff refunds of approximately $95 million for the three months ended June 30, 2026, principally within the Plumbing Products segment.

Below is a summary of our other income (expense), net, in millions, for the three and six months ended MarchJune 31,30, 2026 and 2025:

Below is a summary of our income tax expense, in millions, and our effective tax rate for the three and six months ended MarchJune 31,30, 2026 and 2025:

Below is a summary of our net income, in millions, and diluted income per common share for the three and six months ended MarchJune 31,30, 2026 and 2025:

The following discussion of business segment results refers to the three and six months ended MarchJune 31,30, 20262026, compared to the same periodperiods of 2025. Changes in operating profit in the following business segment results discussion exclude general corporate expense, net.

Operating profit in the Plumbing Products segment for the three and six months ended MarchJune 31,30, 20262026, was positively impacted by higherlower nettariff sellingcosts prices(inclusive andof IEEPA tariff refunds), cost savings initiatives, and higher net selling prices, partially offset by lower sales volume, higher commodity andcosts, tariffunfavorable costssales mix, increased employee-related costs, and an increase in other expenses.

Net sales in the Decorative Architectural Products segment decreased four percent and two percent for the three and six months ended MarchJune 31,30, 2026, were consistent with the comparative prior periodrespectively, primarily due to lower sales volume, mostlypartially offset by higher net selling prices.

Operating profit in the Decorative Architectural Products segment for the three and six months ended MarchJune 31,30, 20262026, was positively impacted by higher net selling prices and cost savings initiatives, partially offset by lower sales volume and higher commodity costs.

We had cash and cash investments of approximately $388$548 million and $647 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. Our cash and cash investments consist of overnight interest bearing money market demand accounts, time deposit accounts,accounts and money market mutual funds containing government securities and treasury obligations. While we attempt to diversify these investments in a prudent manner to minimize risk, it is possible that future changes in the financial markets could affect the security or availability of these investments. Of the cash and cash investments we held at MarchJune 31,30, 2026 and December 31, 2025, $313$316 million and $306 million, respectively, was held in our foreign subsidiaries. If these funds were needed for our operations in the U.S., their repatriation into the U.S. would not result in significant additional U.S. income tax or foreign withholding tax, as we have recorded such taxes on substantially all undistributed foreign earnings, except for those that are legally restricted.

The 2026 Credit Agreement contains financial covenants requiring us to maintain (A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to 1.0, and (B) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0. We were in compliance with all covenants and $127no millionborrowings was borrowed andwere outstanding at aJune weighted average interest rate of 4.690% at March 31,30, 2026.

On April 21, 2026, we entered into a two year, up to $500 million senior unsecured delayed draw term loan due April 21, 2028 with a syndicate of lenders. The senior unsecured delayed draw term loan and commitments thereunder are subject to prepayment at our option and the loans will bear interest, at our option, at a rate per annum equal to (A) a U.S. dollar base rate, (B) the adjusted term SOFR rate, or (C) the adjusted daily simple SOFR rate, in each case, plus an applicable margin based upon our then-applicable corporate credit ratings. The various benchmarks are subject to applicable floors. The covenants are substantially the same as those in the 2026 Credit Agreement. We intendwere toin utilizecompliance thewith availableall covenants and $300 million was borrowed and outstanding at a weighted average interest rate of 4.499% at June 30, 2026. The borrowed funds were utilized to repurchase shares of our common stock.

As part of our ongoing efforts to improve our cash flow and related liquidity, we work with suppliers to optimize our terms and conditions, including extending payment terms. We also facilitate a voluntary supply chain finance program (the "program") to provide certain of our suppliers with the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The amounts confirmed as valid under the program and included in accounts payable were $35$39 million and $26 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $19 million and $17 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. All payments made under the program are recorded as a decrease in accounts payable and accrued liabilities, net, in our condensed consolidated statements of cash flows. A downgrade in our credit rating or changes in the financial markets could limit the financial institutions’ willingness to commit funds to, and participate in, the program. We do not believe such risk would have a material impact on our working capital or cash flows, as substantially all of our payments are made outside of the program.

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. DuringIn May 2026, we entered into an accelerated share repurchase transaction whereby we agreed to repurchase a total of $300 million of our common stock with an initial delivery of approximately 3.3 million shares. This transaction was completed on July 27, 2026, at which time we received, at no additional cost, approximately 0.8 million additional shares of our common stock based on the threevolume monthsweighted endedaverage Marchstock 31,price 2026,of our common stock over the term of the transaction, less a discount. In total, excluding the incremental shares we received in July 2026 from the accelerated share repurchase transaction, we repurchased and retired approximately 3.17.8 million shares of our common stock (includingin 0.3the six months ended June 30, 2026 for approximately $596 million, inclusive of excise tax of $5 million. This included 0.4 million shares to offset the dilutive impact of restricted stock units granted in the threesix months ended MarchJune 31,30, 2026) for approximately $203 million, inclusive of excise tax of $2 million.2026. At MarchJune 31,30, 2026, we had approximately $1.9$1.5 billion remaining under the 2026 authorization. Consistent with our long-term capital allocation strategy, outside of any potential acquisitions, we currently anticipate using atapproximately least$1.0 $800 millionbillion of cash, including funds available under the delayed draw term loan, for share repurchases in 2026.

For the threesix months ended MarchJune 31,30, 2026, net cash usedprovided forby operations was $79$417 million, primarily driven by changesoperating inprofit, workinginclusive capital,of the net tariff benefit from IEEPA tariff refunds, partially offset by operatingchanges profit.in working capital.

For the threesix months ended MarchJune 31,30, 2026, net cash used for financing activities was $137$433 million, primarily due to $202$592 million for the repurchase and retirement of our common stock and $65$129 million for the payment of cash dividends, partially offset by $127$300 million of net proceeds from revolvingthe creditterm loan borrowings.loan.

For the threesix months ended MarchJune 31,30, 2026, net cash used for investing activities was $36$78 million, primarily driven by $34$77 million of capital expenditures.