2008 Annual Report - Masco Corporation

To Our Shareholders
Richard A. Manoogian Executive Chairman
Timothy Wadhams President and Chief Executive Officer
at the 2009 International Builders’ Show
March 2009
Amidst the economic turmoil
of the past year, we continued
to focus on the fundamentals
of our business, building on
our strengths for the future.
The environment during the
past two years has been one
of the most challenging of
our more than 75-year history.
We have seen the financial
markets in turmoil, consumer
confidence decline and housing
starts almost come to a
halt. Both businesses and individuals
have been hard hit.
This past year, housing
starts declined over 30 percent
from 2007 and have declined
over 50 percent from peak levels
in 2005 to a level not seen in the
last four decades. In addition,
consumer confidence dropped
while unemployment rose. As a
result of these macroeconomic
developments, we have had to
strategically redirect the business
models for certain of our businesses
and manage our business
differently than in previous years.
Since late 2006, we have closed 17
manufacturing facilities, reduced
company-wide headcount by over
23,000 employees (representing
40 percent of our North American
workforce) and reduced our installation
branches by over 80 locations.
And, in early 2009, after 50
consecutive years of increased
dividends, we recommended to
the Board of Directors that the
quarterly dividend be reduced
from $.235 per common share to
$.075 per common share to ensure
our ability to fund our business operations
and growth opportunities
that may arise. Across our entire
business, we made and continue
to make the necessary adjustments
to address a tough market
environment.
Typically, in the past, when
residential building slowed, remodeling
of existing homes would
increase. During 2008, that was
not the case as remodeling activity
also declined significantly which,
together with the major downturn
in new home construction, resulted
in a sales decline for Masco of 17
percent.
In a challenging sales environment,
strong companies look
for opportunities to gain strategic
advantages and drive long-term
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