Good morning, ladies and gentlemen. Welcome to Masco Corporation's fourth quarter and full year 2020 conference call. My name is Michelle, and I will be your operator for today's call. As a reminder, today's conference call is being recorded for playback purposes. To ask a question today, please press star then the number one on your telephone keypad. To withdraw your question, please press the pound key. I will now turn the call over to David Chaika, Vice President, Treasurer of Investor Relations. You may begin. Thank you, Michelle, and good morning. Welcome to Masco Corporation's 2020 fourth quarter and full year conference call. With me today are Keith Allman, President and CEO of Masco, and John Sznewajs, Masco's Vice President and Chief Financial Officer. Our fourth quarter earnings release and the presentation slides that we will refer to today are available on our website under investor relations. Following our remarks, we will open the call for analyst questions. Please limit yourself to one question with one follow-up. If we can't take your question now, please call me directly at 313-792-5500. Our statements today will include our views about our future performance, which constitute forward-looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements. We describe these risks and uncertainties in our risk factors and other disclosures in our Form 10-K and our Form 10-Q that we filed with the Securities and Exchange Commission. Our statements will also include non-GAAP financial metrics. Our references to operating profit and earnings per share will be as adjusted unless otherwise noted. We reconcile these adjusted metrics to GAAP in our earnings release and presentation slides, which are available on our website under investor relations. With that, I'll now turn the call over to Keith. Thank you, Dave. Good morning, everyone, thank you for joining us today. I hope you and your families are safe and healthy. 2020 was a challenging year for all of us. As the virus started reshaping our lives, our economy, and our business, we established three priorities to guide us throughout the year. Number one, keep our employees safe. Two, meet the needs of our customers, three, position Masco to outperform the recovery. Our employees across our business units did a tremendous job to deliver on all of these priorities. Our performance in 2020 was a testament to Masco's culture of solving problems, serving customers, and delivering better solutions. I want to thank all our 18,000 employees across the globe for their outstanding efforts throughout 2020. Now let me provide you some brief comments on our fourth quarter before I turn to our full-year results and conclude with our thoughts on 2021. Turning to slide four, our top line increased 12%, excluding the impact of currency in the fourth quarter. We saw growth across our entire portfolio, led by strong growth in North American Plumbing, International Plumbing, and our paint business. Operating profit increased 20%, and our operating margin expanded 90 basis points to 16.6% in the quarter as we leveraged our strong volume growth. Our earnings per share for the quarter increased an outstanding 36%. Turning to our segments, Plumbing grew 12%, excluding currency, with 14% growth in North American Plumbing and 8% growth in International Plumbing. North American Plumbing was led by Delta Faucet Company with 18% growth. Our spa business also achieved growth in the fourth quarter as we continued to effectively manage COVID-related restrictions. Hansgrohe drove strong growth in Germany and China, as those markets have recovered nicely from earlier in the year. In our Decorative Architectural segment, BEHR continued its tremendous year with high teens DIY paint growth and mid-single-digit pro paint growth in the fourth quarter. Our lighting and our bath and cabinet hardware businesses also contributed nicely to growth in the quarter. In regards to capital allocation, we resumed our share repurchase program by repurchasing 2.3 million shares for $125 million during the quarter. We executed three bolt-on acquisitions, which we expect to contribute approximately 3% top-line growth in 2021. The largest was the acquisition of Kraus, an online plumbing fixture company focused on modern, high-quality sinks, faucets, and related products. Kraus will operate as an affiliate of Delta Faucet Company. This leading digitally native brand will complement our online capabilities in the fast-growing e-commerce channel. In our plumbing segment, Hansgrohe, in January, acquired a 75% interest in Easy Sanitary Solutions, or ESS, a Netherlands-based developer and manufacturer of high-style linear drain solutions. ESS shares Hansgrohe's focus on innovation, design, and responsibility and will further expand our strong presence in the shower space. In our Decorative Architectural segment, we acquired Work Tools International, a leading manufacturer of high-quality, precision paint tools and accessories, including brushes, rollers, and mini rollers for both DIY and professional painters under the Whizz and Elder & Jenks brand names. These acquisitions are consistent with our M&A criteria in that they are leaders in their respective categories, have a strong fit with our existing strategy, increase our market share in complementary or adjacent product categories, and meet our bolt-on acquisition return criteria, which is to exceed our risk-adjusted cost of capital within a three-year timeframe. Let's review our full year performance. Please turn to slide five. For the full year, sales grew 7%, led by double-digit growth from Delta Faucet, BEHR Paint, and Liberty Hardware. Delta gained share with double-digit growth across its retail, trade, and e-commerce channels. Hansgrohe gained share in its two largest markets of Germany and China. Our spa business, which was the most impacted by shutdown orders and limits on employees in its Mexican facilities, overcame significant obstacles to end the year down only mid-single digits, and enters 2021 with a record backlog due to the tremendous demand for its products. In our Decorative Architectural segment, we were well-positioned with our leading brands, BEHR and KILZ, and our strong channel partners to capitalize on the powerful resurgence in DIY paint. This resulted in full-year growth of over 20% in DIY paint. Pro paint demand was soft in Q2 and Q3, but returned to growth in the fourth quarter and is accelerating into 2021. While total company sales grew 7%, operating profit increased 18% as we leveraged the strong volume growth and enacted significant cost reduction across the organization, including a hiring and wage freeze for part of the year, significantly lower brand and marketing spend, a freeze on certain growth investments for part of the year, and obviously, drastically reduced travel and entertainment expense. These actions, coupled with our strong volume leverage, resulted in significant operating margin expansion of 170 basis points in 2020. Our strong cash generation allowed us to deploy nearly $1.1 billion in capital during the year. We repurchased $727 million of our stock at an average price of approximately $30 per share. Excuse me, $39 per share. We returned approximately $145 million in dividends to shareholders. We completed four bolt-on acquisitions for $227 million. We finished the year with over $1.3 billion in cash on hand and net leverage of 1x. This strong operating profit growth, combined with our significant capital deployment, resulted in exceptional financial results. 37% earnings per share growth to $3.12 per share, exceeding our 2019 Investor Day guidance for 2021, a full year earlier than planned. Free cash flow of over $1 billion with a conversion rate of 118%. A return on invested capital of approximately 42%. Turning to 2021. While precise forecasting is a significant challenge in this dynamic environment, I'd like to share with you our view of the markets where we compete. For the North American repair and remodel market, we expect market growth to be in the low to mid-single digit range, with strong growth in the first half, followed by difficult comps in the second half. For the paint market, a subset of the repair and remodel market for us, we expect the DIY paint market to be down low-to-mid single digits, and the pro paint market to grow mid-single digits. For our international markets, principally Europe, we expect a low double-digit growth environment. While the U.S. market will face challenging comps in the back half of 2021, leading indicators remain robust. Home price appreciation was up nearly 13% in December. Existing home sales were up over 22% compared to prior year. Each of these metrics has a strong correlation with our sales on a lag basis. Based on these assumptions and our expectation that we will continue to gain share and outperform the market, we anticipate Masco's growth to be in the range of 5%-9%, excluding currency for 2021, and 7%-11%, including currency. This is based on expected organic growth of 2%-6%, excluding currency, growth from our completed acquisitions of approximately 3%, and growth from foreign currency translation of approximately 2%. We expect margins to be approximately 17% and earnings per share to be in the range of $3.25-$3.45 for 2021. Turning to capital allocation, our board announced its intention to increase our annual dividend to $0.94 per share, beginning in the second quarter of 2021, a 68% increase, as we have raised our targeted dividend payout ratio from 20%-30%, based on the strength of our business model and cash generation capabilities. In addition to announcing its intention to increase our annual dividend, our board also approved a new $2 billion share repurchase authorization. Our strategy remains unchanged to deploy our free cash flow after dividends to share repurchase or acquisitions. Based on our strong liquidity position of over $1.3 billion in cash at year-end, and in our projected free cash flow, we expect to deploy approximately $800 million to share repurchases or acquisitions in 2021. Now, I'll turn the call over to John to go over our fourth quarter, full year, and 2021 outlook in more detail. John? Thank you, Keith, and good morning, everyone. As Dave mentioned, most of my comments will focus on adjusted performance from continuing operations, excluding the impact of rationalization and other one-time items. Turning to slide seven, we delivered a strong finish to a record year. Fourth quarter sales increased a robust 12%, excluding currency. In local currency, North American sales increased 13%. This outstanding performance was mainly driven by strong volume growth in North American faucets and showers, as well as DIY paint. In local currency, international sales increased 8%. Gross margin was 35.6% in the quarter, up 100 basis points as we leveraged increased volume, partially offset by higher rebates and program costs. Our SG&A as a% of sales was 19% in the quarter. This was primarily due to increases in certain variable costs, such as incentive compensation, program costs, advertising, and legal accruals. We delivered strong fourth quarter operating profit of $309 million, up $52 million or 20% from last year, with operating margins expanding 90 basis points to 16.6%. Our fourth quarter EPS increased 36% to $0.75. Please note that this performance is based on a normalized tax rate of 25% versus the previously guided 26% tax rate. Changes to IRS guidance in late 2020 on how certain foreign income is taxed in the U.S. lowered our normalized tax rate to 25%. As this change was retroactive, restated adjusted EPS numbers for 2019 and the first three quarters of 2020 can be found in the appendix on slide 28. Turning to the full year 2020, sales increased 7%, excluding currency. Foreign currency translation favorably impacted the full year by $13 million. In local currency, North American sales increased 9% and international sales decreased 1%, as many European markets were slower to recover from the impacts of COVID-19. Our SG&A as a% of sales decreased 100 basis points to 17.9% for the full year as a result of our rapid pandemic-related cost containment. For the full year, operating profit increased $196 million or 18%, with operating margins expanding 170 basis points to 18.2%. Lastly, our EPS increased 37% to $3.12 for the full year. I want to thank our employees across the globe for their hard work, dedication, and commitment to safety that enabled us to achieve record results in an extremely challenging year. Turning to slide eight, Plumbing grew 12% in the quarter, excluding the impact of currency. North American sales increased 14% in local currency, led by Delta's 18% growth in the quarter. Delta continues to drive robust consumer demand across our wholesale, retail, and e-commerce customers. As Keith mentioned, Watkins, our spa business, delivered high single-digit growth in the quarter as they continued to experience strong demand for their products. They have a record backlog despite operating at less than 100% capacity due to ongoing government-mandated employee limitations in our Mexican facilities. International plumbing sales in the fourth quarter increased 8% in local currency. Hansgrohe once again led growth, driving double-digit growth in both Germany and China. Operating profit was $224 million in the quarter, up $44 million or 24%, with margins expanding 160 basis points to 19.1%. The strong performance was driven by incremental volume and cost containment initiatives, partially offset by higher year-end program costs, marketing, and other increased variable expenses. Turning to the full year 2020, sales increased 3%, excluding currency. Foreign currency translation favorably impacted full-year sales by approximately $15 million. In local currency, North American plumbing sales grew 6%. The international plumbing sales decreased 1%. Full-year operating profit was $813 million, up $92 million or 13%, with margins expanding an outstanding 160 basis points to 19.7%. Turning to 2021, we expect Plumbing segment sales growth to be in the range of 11%-14% with 4%-7% organic growth, another 4% growth from the recent acquisitions. Given current exchange rates, foreign currency to favorably benefit plumbing revenue by approximately 3% or $112 million. We anticipate full-year margins will be approximately 18%, given that in 2020, we delayed approximately $40 million in costs and investments due to COVID. We expect a significant portion of this to return in 2021 in the form of investments in our brands, service, and innovation to fuel future growth. We will also have increased amortization expense of approximately $11 million due to purchase accounting. Segment operating margins will decline by approximately 60 basis points due to this incremental amortization in the two recent acquisitions. Turning to slide nine. Decorative Architectural grew 12% in the fourth quarter, driven by mid-teens growth in our paint business. Our DIY paint business continued its strong year with high teens growth, and our pro-paint business rebounded nicely in the quarter with mid-single-digit growth. Our builders hardware and lighting business also benefited from increased consumer demand and each contributed to the segment's results by delivering solid growth. Operating profit in the quarter increased 9%, driven by incremental volume, partially offset by an unfavorable price-cost relationship, as well as higher variable compensation and legal accruals of approximately $10 million. Turning to full year 2020, sales increased 12%, driven by the resurgence in DIY paint in the year. While our pro business declined slightly over the prior year, we saw solid improvement in demand in the fourth quarter. Full-year operating income increased $98 million or 20%, with operating margins expanding 120 basis points to 19.2%. In 2021, we expect Decorative Architectural segment sales to grow in the range of 2%-7%, with 0%-5% organic growth and another 1.5% from the acquisition. We also expect segment operating margins of approximately 19%. Looking specifically at paint growth for 2021, we currently anticipate our DIY business to be approximately flat with 2020 and our pro business to increase high single digits. In addition, the acquisition completed at the end of 2020 will add approximately $3 million of incremental amortization expense due to purchase accounting. Turning to slide 10, our year-end balance sheet was strong, with net debt to EBITDA at 1x and we ended the year with approximately $2.3 billion of balance sheet liquidity, which includes full availability of our $1 billion revolver. Working capital as a% of sales finished the year at 15.2%, excluding acquisitions, and an improvement of 50 basis points over prior year. This performance was excellent. As we enter 2021, our inventory levels will require some reinvestment to sustain our outstanding delivery performance. With our strong operating and working capital performance and lower than normal CapEx, adjusted free cash flow was extremely strong at $1 billion, representing 118% of adjusted net income from continuing operations. During 2020, we repurchased 18.8 million outstanding shares for approximately $727 million, and we increased our annual dividend by 4% to $0.56 per share. Finally, I'm pleased to report that Moody's recently upgraded our credit rating to Baa2 based on our improved credit metrics and strong financial performance. We have summarized our expectations for 2021 on slide 11. We expect overall sales growth of 7%-11%, with operating margins in the range of approximately 17%. We currently expect that growth will be more heavily weighted towards the first half of the year, as we will obviously face our impressive 2020 comps in the second half of 2021. One thing to keep in mind is that in 2021, we expect to annuitize and terminate certain of our U.S. defined benefit plans in either the second or third quarter. As a result, we will incur a non-cash settlement charge of approximately $450 million when we terminate the plans. We will adjust out this charge for purposes of our adjusted EPS calculation. Additionally, we will make a final one-time cash pension contribution of approximately $140 million to settle these plans. This amount will reduce our cash from operations, similar to the approximate $50 million of defined benefit contributions made to these plans in the past several years. This also means that beginning in 2022, cash from operations will increase by approximately $15 million as compared to prior years, improving our already strong free cash flow conversion. Lastly, as Keith mentioned earlier, our 2021 EPS estimate of $3.25-$3.45 represents 7% EPS growth at the midpoint of the range. This assumes a 255 million average diluted share count for the year. Additional modeling assumptions for 2021 can be found on slide 17 in our earnings deck. With that, I'll now turn the call back over to Keith. Thank you, John. 2020 was a disruptive year on many fronts, and these uncertain times are far from over. While there is clearly much focus on these short-term dynamics, let me share with you how we are thinking about Masco for the long term. Please turn to slide 12. The repair and remodel industry is attractive, with favorable fundamentals. Growth on average is approximately GDP plus 1%-2% and is less cyclical than the new home construction market. Favorable demographics will help drive repair and remodel demand, and we are on the leading edge of the large millennial cohort forming households. Older homes require more repair and remodel spending, and the average age of housing has increased due to significant under-building of homes since the downturn of 2008. The COVID-19 pandemic has clearly increased the desire for more enjoyable living space, which has led to increased home demand and remodeling expenditures. Masco is a low-ticket, repair-and-remodel-focused business with market-leading brands, with product and geographic diversification, which provides growth and stability through an economic cycle. We leverage our customer insights, broad channel relationships, scale, diversification, and our Masco Operating System to drive innovation and make our businesses better. With our market-leading brands, history of innovation, strong management teams, and focus on serving our customers in this attractive industry, combined with our strong free cash flow and capital deployment, our long-term expectation is to grow earnings per share on average by approximately 10% each year. This is comprised of above-market organic growth in the range of 3%-5% annually, growth from acquisitions in the range of 1%-3%, margin expansion each year through cost productivity and volume leverage, and continued capital deployment in the form of share buybacks, which should contribute approximately 2%-4% EPS growth, and dividends, which should add approximately 1%-2% return on top of the EPS growth. While 2020 was an extremely challenging year, we responded exceptionally well and are poised to continue to drive shareholder value creation in the future. Now with that, we'll turn the call over to Q&A. Thank you. In order to ensure that everyone has a chance to participate, we would like to request that you limit yourself to asking one question and one follow-up question during the Q&A session. As a reminder, to ask a question, please press star one on your telephone keypad, and to withdraw your question, please press the pound key. Your first question will come from Matthew Bouley from Barclays. Your line is open. Hey, good morning. Thanks for taking the questions. The first one I'll ask on the plumbing margin guide of 18%. It sounded like between that additional investment spending and the purchase amortization, that mostly bridges us to there from 2020. I guess my question is what else might be contemplated in that margin guide, thinking about metals inflation, pricing in this environment and all that? Thank you. Good morning, Matthew. It's John. I think you hit the nail on the head with your analysis. You're right. The two big things that are causing the decline in year-over-year plumbing margins are the sum of the spend that's coming back in as well as the impact of the two acquisitions in the segment for 2021. What else could impact it to bridge the difference? There's probably a little bit of headwind from commodity inflation, because as you know, we don't always perfectly match the timing of any pricing or any other actions we may take to offset commodity inflation with actually feeling the inflation to our P&L. I'd say that's a pretty small impact overall. Okay. Thank you for that, John. Second one, the long-term guide of 10% annual EPS growth. It sounds like annual margin expansion. My question is, to the extent you're guiding 2021 to 17% in total, are you conceptually saying that can continue to move higher? The reason I ask is specifically because of Decorative at 19% is still kind of above the older range you once gave. Should we assume that I'm not looking for specific 2022 guidance, but conceptually, your expectation is that a 17% margin can continue to move higher. That's right, Matthew. We have our Masco Operating System that has proven itself in terms of productivity and total cost productivity across our business units. We obviously expect continued good, solid drop-down on incremental volume. Yes, our expectation would be that we would continue to expand margins. I think one point I would like to make, Matthew, is if you look at our margin and you factor out, let's say from obviously 2020 was a very unique year, if you look at how we performed 2019 and our estimated guide in 2021, and you factor out some of that investment accounting for acquisition, or excuse me, purchase accounting that John talked about. You look at, say, the middle of our guide, the dropdown that we're anticipating on this incremental volume is right in there in that 25%-30% range that we've talked about. Clearly 2020 was a unique kind of perfect storm for margin, if you will, where we had good leverage on our incremental volume. We cut way back on some costs that we, as I've talked about before, we know that those cutbacks weren't going to continue and that we need to continue to invest in areas like channel penetration, e-commerce, long-term connected home and those sorts of things. We're going to continue to do that, and we're going to continue to invest in our brands because it works. Yes, you're exactly right. We expect continued margin expansion. Matthew, maybe the one thing I'll add to Keith's comment. Maybe two things. One is that as you think about the continued margin expansion, I think about it in the context of tens of basis points, not 100s of basis points of continued margin expansion. Second, specifically with respect to your thoughts around the Decorative Architectural segment, recall that our Kichler business, we have indicated that business we're turning around in a lot of the good work that the team has done over the course of the last year and a half there, will start to bear fruit in 2021. Supplementing that good work will also be some reduced amortization from the acquisition of that in the range of $7 million or $8 million on an annual basis. I think that also helps explain a little bit of the higher margins in Decorative Architectural. Great. No, thank you for all the color. Very helpful. Your next question comes from John Lovallo from Bank of America. Your line is open. Hey, guys. Thank you for taking my questions as well. Maybe just starting with Decorative Architectural and the 0%-5% organic outlook for top line. Could you help us understand maybe some of the drivers that could get us to the higher end of that range? Well, I'm sorry, you broke up a little bit, John. You had asked for some of the drivers that would get us. I apologize. Yeah. Yeah, I was just wondering, it's a fairly wide range. Just curious, realizing that the comps are tough, what could get you to the higher end of that 5% organic range? Really, it's about the consumer and continued demand driving the desire to freshen their homes, to spend more time in their homes, and to have their homes look better. The fact that we're hitting that sweet spot with a relatively low price point. Fundamentally, the high end of that range would come from DIY paint and continued growth there. Got you. On Watkins, it sounds like the backlog is very encouraging. Curious though, how close to 100% capped are you guys now? What's your ability to sort of execute on that backlog in 2021? We're doing pretty well. We're getting better and better at dialing in our factories, given some of the restrictions. Who knows where these restrictions will go? I suspect that they will start to ease as globally the pandemic starts to wane, but we don't know that for sure. But fundamentally, we're doing a good job. We are looking at growth in this business, and we had growth in the fourth quarter. We're really happy with how the business and our spa business in general has responded. Yeah. John, the one thing I would add to Keith's comments is that, to his point, Watkins and the team down there have reacted just tremendously to the conditions that have been dealt or the conditions dealt to them. That said, because of the strong backlog, we do expect double-digit growth from that unit in here in 2021 compared to 2020. Very optimistic about how that business unit should perform. Thank you, guys. Your next question will come from Stephen Kim from Evercore ISI. Your line is open. Thanks very much. Just wanted to follow up on John's question there on that 0%-5% organic for Decorative Architectural. Just wanted to make sure that we got a sense for how that might flow quarterly. I mean, Decorative Architectural basically obviously benefited from the pandemic on DIY. You had pretty strong organic growth pretty much throughout the year in almost every quarter. Just wanted to get a sense for how big of a delta are we talking about in terms of growth rates from, let's say the front half of the year to the back half of the year, or any other kind of help you can give us about the quarterly trajectory. Yeah, Stephen, it's John. You're right. We did experience very strong growth in the Decorative Architectural segment, and specifically in paint in 2020 in most quarters. If you think about even the first quarter of 2020, the segment was up 9%, and our paint sales were up kind of high teens%. What we're expecting now, Stephen, is on a run rate basis, kind of the strong growth that the paint has been enjoying the last couple quarters to extend the first half of the year. Obviously as we get up against the tough comps of Q3 and Q4, that growth dials back a bit. Really Keith's point, what drives us to the higher end of the range is consumer demand. If we see continued strength from the consumer in our painting activity, that could push us to the very high end of the range. If it doesn't materialize, it could kind of in the midpoint to the lower end of that range. Got it. Yeah. Okay, that helps in understanding the degree of conservatism in there. Second question. Keith, I believe you made a comment about, maybe it was you, John, about the $800 million in share repurchases. I believe you said in $800 million in share repurchase or acquisitions. I just want to clarify, are you saying that you intend to do $800 million in buybacks, and then any acquisitions that you do would be incremental to that? Is the $800 million going to be all that you're allocating for both, and you'll sort of see how the acquisitions shape up over the course of the year? No change in how we've talked about it, Stephen. That's for both. We view those funds as fungible, and if there's an acquisition that we see that meets our criteria, as I said, we're focused more on bolt-ons and close to the core. I think what we talked about with these three acquisitions is a good indication of where we're focused and what our strategy is. Fundamentally, it's that $800 million that's fungible between acquisitions and share repurchases. With our strong balance sheet, we have room if there was something bigger from an acquisition standpoint that we wanted to go after. We certainly have the capability and the dry powder to do that, but fundamentally, we haven't changed about how we're thinking at it in terms of reallocating free cash flow. Okay, great. Thank you very much, guys. Your next question comes from Phil Ng from Jefferies. Your line is open. Hey, guys. Congrats on a strong quarter. Sounds like you have pretty good line of sight in the first quarter and easier comp than 2Q. If we come in at the high end of your guide, do you see the opportunity for upside more back half weighted because you're assuming some moderation? Yeah, Phil, I think that's the way to think about it. Like you said, we got better visibility in the first part of the year. It's a little tough to see right now how exactly things play out in the back half of the year. There's a number of moving pieces. It all depends on really how the pandemic and the vaccines unfold, how that ultimately then ends up driving consumer behavior and consumer demand. You're right. More clarity in the first part of the year, less clarity in the second half. Got it. Sounds like you're not seeing any slowdown year to date, that's pretty encouraging. Implicit in your guide, what type of inflation are you assuming and how do you plan on tackling that? It looks like BEHR paint prices based on some RSMeans have started to move up already. Do you expect that price cost squeeze in DAP to kind of be more neutral in 1Q? Any handholding you could provide on the shape of the margin profile for plumbing, because there's a lot of moving pieces there. Yeah. I'll start out maybe a little bit, and then Keith can supplement my remarks. First, maybe we'll take a step back, Phil, and talk more broadly about the commodity basket that we're facing, and then talk about then the shape of the plumbing margins. If you take a look at the various raw materials that impact our financial statements. Obviously, copper and zinc have started to inflate really in the back half of the year, but really have been pretty strong since the middle of the fourth quarter, kind of the November timeframe, really started to see copper and zinc inflate. At the same time, you can think about the input costs or the input basket that goes into paint, which are really twofold. One is titanium dioxide and the other are more of the petroleum-linked engineered resins. We have started to see inflation in both, probably more so on the engineered resin side than in TiO2, but TiO2 recently is starting to inflate. As a matter of fact, as I think about the inflation as it hits the raws in paint, the engineered resins have probably even accelerated more in the last several weeks. The way we're going to approach this is the way we've historically approached our raw materials. One, obviously, we think in total, Phil, that raw material inflation will be kind of a low single digits range on us during the course of the year, but we'll go after it in the way we typically do. That is, we negotiate with our suppliers, we work on our internal cost productivity, and then we also, to the extent that it's required, we'll take pricing actions. As I think you recall, we tend to be price cost neutral over time. That said, we can't always perfectly time these things. You might see a quarter or so of margin contraction because of us feeling the pricing impact or the cost impact of the raw material inflation before we're able to implement price. That should level out over time. Keith, I don't know if there's anything else you want to add. No, I think you hit on it. We are experiencing some commodity pressures and some cost pressures. If you think about it, let's say mid-single digit type inflation in our paint basket and probably lower than that in our plumbing basket. Logistics, we're seeing some pressure there, but logistics is a low single digit cost for us, so that's not such a big impact. This is nothing that's new to us. I've been in this seat now going on seven years, and we've seen several different cycles of this kind of thing. We go at it with productivity improvements through our Masco Operating System. We go at it with supplier negotiations. Because of our consistent investment in innovation and brands, we're able to, when we need to, go after it with price. Over time, as we've talked about, we're neutral as it relates to price cost, and there's some leads and lags in that, and that can go both ways. Fundamentally, we don't view that as changing at all. We don't expect it to change going into 2021. Okay. Super helpful. Phil, with respect to your second question related to how we're thinking about plumbing margins through the year. Similar to a couple of the other answers we've already given in that probably a little bit better, more of a benefit in the first part of the year, because just the way the margins shaped up in 2020. Then obviously we face much more significant margins in the second half of the year. That will, as a comp, in the back half of 2020, I think our margins in Q3 of last year were 23%-24%. Those tough margins will be tough to comp against. Probably not as good of margin in the back half of the year. Okay. Thanks a lot. Really helpful. Yep. Your next question will come from Nishu Sood from UBS. Your line is open. Thanks. First question I wanted to ask was about the guidance and the acquisitions. You mentioned that the acquisitions will contribute about, I think you said 3% in revenue growth. Is there an EPS impact as well? I know there's some amortization, so maybe it nets out to nothing, but how is it a part of the EPS guidance for 2021? It's a relatively small piece of the overall EPS guide Nishu, because if you think about circa $15 million of amortization on these businesses, it's probably $0.02. Got you. Thanks. The second question, on Decorative Architectural. On your third quarter call with some visibility into price cost, et cetera, you'd expected the margins to be 17%. Obviously, they came in somewhat short of that. What drove that? You highlighted price cost, but it's obviously notable that you're expecting very strong margins in your Decorative Architectural division in 2021. I just wanted to understand what drove the downside that will reverse and still allow margins to be pretty nice in 2021. Yeah. Nishu, I think it's a pretty straightforward answer. I think what drove the margin down in the fourth quarter was kind of a couple things. One was we had higher variable costs, just a higher incentive compensation cost, I should say, due to just the outstanding performance that the segment enjoyed. The other piece of it is we trued up some legal accruals. The two of those in aggregate kind of came in at about $10 million. If you kind of view those as one time in nature, you're kind of right there as to where you would expect us to be. Got you. Okay, great. Thanks. The next question will come from Michael Rehaut from JP Morgan. Your line is open. Thanks. Good morning, everyone. First, I wanted to go into the paint outlook for 2021, and if I heard it right, you're expecting your own DIY business to be flat versus the market to be down low to mid-single digits, pro to be up high single digits versus your outlook for the market to be up mid-single. I was hoping if you could just give us a little more detail in terms of what's driving your outlook for the share gains in both of those businesses in 2021. It's demonstrated performance. We've got our strong brands really when you think about KILZ as well as BEHR. We've had and demonstrated that our investments in the pro paint area is working, and we're going to continue to make those investments. It's really demonstrated performance on how well our investments in brand innovation and pro paint growth are working. Okay. I appreciate that, Keith. I guess I was just wondering if this is share gains by Home Depot or some new products. Anything that's kind of more, let's say, specific to 2021 in terms of any catalysts or initiatives. Yeah, absolutely. It's more of what you've seen in the past. Absolutely new products and our new product rollout for 2021 is strong, and we're going to continue to invest in that. The brand and the brand strength as it relates to advertising and various programs that we are rolling out, both in DIY as well as pro, and then continued investment in feet on the street and driving growth, specifically with pro. It's more of the same recipe of brand service and innovation. Okay. No, I appreciate that. I guess secondly, I just wanted to circle back to the comments around the operating margins for the businesses. If you go back to the Analyst Day, at that time, you were kind of looking at long-term margin targets that were plus or minus right in line with the performance, the margins that you were achieving at that time. In other words, you were looking at a margin outlook that was roughly in parity with the level of profitability you're generating. Now it sounds like you're saying something a little different, that you're expecting some amount of margin improvement going forward. John, I appreciate your comment saying maybe in the 10 s of basis points, not the 100 s. Talking about an incremental margin being above the margin that you're currently generating. I just wanted to understand maybe what changed between then and now. It was my understanding that the outlook given at the last Analyst Day was more driven by the fact that you certainly have kind of a level of reinvestment in the business, and the investment for growth, investment in your channel partners. That was what was more keeping it at the ratings that it was. Just trying to get a better sense of what's different in the margin outlook today versus back then. Yeah. Mike, I'll kick this one off. If Keith might add some other color to this one. I think the principal difference between what you heard from us at our 2019 Investor Day and what we're talking about now in terms of both growth and margin profile has to do with our underlying assumptions for the market. We, in 2019, outlined fairly muted market growth going forward through the period of 2021, which is really what we outlined. Obviously, things have played out much different than that. Even if you consider what we're laying out for 2021 today, it's better growth than we would've forecasted back in the fall of 2019. I think that's the principal difference. Our business is doing everything else that we would expect them to do. Yeah, they're driving innovation? Absolutely. Are they pushing for share gains? Yes. Are they doing all the right things in terms of their service and delivery capability? Yes. All those good things are happening. I think fundamentally, the big difference is our perspective on market growth. Keith, I don't know if there's anything else you don't want to add. I think that you hit it, John. We had a different perspective on top line growth as the main driver when you compare the difference between our Investor Day in 2019 to where we sit today. It's also a combination of continuing our total cost productivity and leveraging of our Masco Operating System. Long term, a little bit different outlook, 2019 versus where we sit today. We're committed to organic growth in that 3%-5% range. I think we can add another 1%-3% in acquisitions, buyback in that 2%-4% range, and that's how we see that long-term 10% growth in EPS. Then, of course, the 1%-2% dividend yield on top of that. That's fundamentally how we're looking at it. Great. Thanks very much. Your next question will come from Susan Maklari from Goldman Sachs. Your line is open. Thank you. Good morning. My first question is, you talked a little bit in your prepared comments about the trends between DIY and pro, and the fact that you saw a little bit of a pickup in pro in the fourth quarter, and that's expected to continue this year. Can you just give us a bit more color on that? Exactly how that's starting to come together, and how you expect that ramp to come through over the next couple of quarters? We certainly saw the growth pick up in the fourth quarter. I'm not going to get into specific month by month here, but it's continuing into 2021 here. I think by and large, it has to do with residential repainting and consumers being more comfortable with contractors and pros inside their house. I think that's the fundamental driver. We're seeing it mainly in the interior side. You'd expect that from a seasonality perspective, but I think that's, Susan, fundamentally the driver. Got you. Okay. My next question is, when we do think about the mix shift coming through, it feels like in 2020, the mix shift was incredibly favorable as we think about that mix between DIY and pro. As we think about things normalizing as we go forward, how should we think about the impact that has on the margin profile and how you're kind of thinking about and maybe incorporating that into the guide? Susan, maybe taking a step back, and talking about mix broadly across our business. Yeah. We did see favorable mix across many of our businesses in 2020. It was a relatively modest impact overall. We saw favorable mix, obviously, in some of our plumbing fixtures. We saw some of it in our spa business as we saw some of our higher-end spas sell. To your point, we saw it in paint with a little bit better mix of more DIY and a little bit less pro. As we think about that as we go into 2021, again, I don't think mix is going to have a significant impact. Could there be a modest headwind from mix in our paint business? Yeah. It'd be relatively modest. I would say that the negative mix that we've been experiencing in plumbing in Europe will probably likely continue into 2021. That's been something we've been experiencing probably for about 24 months now, and we don't see that changing too much. Again, overall, what I want to make sure you take away that it's not going to be an overall significant impact to the business. Got you. Okay. That's helpful. Thanks. Your next question will come from Michael Dahl from RBC Capital Markets. Your line is open. Hi. Thanks for taking my questions. First question, I wanted to come back to kind of the plumbing outlook from a top-line standpoint. John, I think you mentioned during the remarks that international would be low single digits, which I presume is mostly plumbing. I was hoping to get more of a breakdown of kind of how you see the composition of the organic growth of 4%- 7%. Presumably, the Watkins business is up north of that. Could you give us any sense of kind of how you're seeing Watkins, what the core North American faucet business is doing? If that international comment was reflective of what you expect specifically for international plumbing, that'd be great. I think you nailed it, Michael. Watkins, we're expecting really solid double-digit growth from them in 2021. As I mentioned before, the team's doing an outstanding job of maintaining our high quality and getting our units out, and obviously that's good mix for us as we've talked about. Yeah, leading the growth story in plumbing would be Watkins, for sure. You're right in terms of international and that low single-digit guide. That's primarily our European business, and that's a mixed bag, as you might expect. We're continuing to see strong growth in our home markets of Central Europe and China. We continue to be challenged, as you might expect, as is everybody in England and Italy and some other locations. It's a mixed bag, but you're right on in terms of the low single digits. When we look across North American plumbing, we'll expect to see really solid continued share gains across all of our channels, but a higher growth rate in e-commerce. I think our acquisition of Kraus, the leading digitally native brand in the space, feeds right into that and gives us a lot of flexibility and capabilities to continue to outgrow that. On the retail front, we have been the leader in share of shelf in the faucet aisle for many years, and that's continuing, and we're continuing to invest to keep that lead. We expect good growth there. Obviously, between our BrassCraft and Delta, very solid brands in the plumbing wholesale trade. We expect to continue to outgrow the market there. You hit it on the head with regards to how we're thinking about international. Watkins leading the way. Obviously, e-commerce as a channel will grow faster than others, and we're going to continue to gain share across the board. Okay. Thanks, Keith. That kind of dovetails into my second question, which is around some of the long-term strategy, specifically with respect to M&A and e-commerce. It's picked up a couple of good tuck-ins here, and you're now kind of formally guiding to some contribution from M&A going forward. Two-part question is really, A, what are you seeing in the markets in your pipeline with respect to M&A that's kind of giving you the confidence that this'll continue to be a steady stream that you can incorporate into a long-term framework? Second, specifically with respect to plumbing, and the push and acceleration in e-commerce, how should we think about using the Kraus acquisition as kind of a starting point or an acceleration point to further scale your other brands versus there being significant other acquisition opportunities specifically within kind of the plumbing, digital, or e-commerce channel? Mike, on the M&A component and to your direct question, what gives me the confidence? It's a couple things. First and foremost, it's the team, the deal team. John is leading it, and the people that he has on his team are outstanding, and they've demonstrated it by what they were able to do in 2020. As you know, even though these were smallish acquisitions, the workload and the work on cultivating these isn't any less than a big acquisition. They were able to do it exceedingly well. I'm confident in the team. Secondly, it's the actual pipeline and our MOS process of cultivation and looking at what's available. It's still a challenge as valuations really haven't softened that much, and that informs a need to stay close to the core, and that's our strategy. As I said before, we will look at bigger ones, but fundamentally, we're looking at tuck-ins where we can bring synergies to make our return work, and we're going to stay disciplined. That combination of a good team, a good pipeline, together with the discipline is what gives us the confidence. I'm sorry, Mike, your other question was on e-commerce? Yeah. Oh, go ahead. Oh, yeah. It was e-commerce and how much we should think about is going to come from additional M&A versus using the platform you've already built and now accelerated through Kraus to scale your existing brands. Yeah. I think there may be opportunities for further acquisitions. Where we can acquire capabilities, where we can acquire brands in certain spaces that make sense, we'll do that. Fundamentally, it's about our existing brands and continuing to drive with the outstanding teams that we've developed and the investments that we've made as it relates to partnership with pure play, as well as the more building products associated, hooked up with bricks and mortar. We're going to continue to drive that, and that's where the lion's share will be. We'll be opportunistic for other opportunities. Okay. Thanks, Keith. Thanks. Your next question will come from Adam Baumgarten from Credit Suisse. Your line is open. Hey. Good morning. Thanks for taking my questions. Just sticking with paint. Just if we think about promotions given sort of a more normalized growth year, should we expect those, and is that embedded in your guidance for promotions to be up in 2021 versus 2020? Yeah. Adam, we're expecting a more normalized year this year. As you might recall, we and our channel partner pulled back on some of the promotions, particularly in some of the major summer holidays in 2020, as a result of not wanting to drive too many consumers into their stores and preventing the spread of the virus. What we believe now will take place, and we'll see how this ultimately plays out, is that 2021 reverts to a more normalized year, at least at this point. Okay, great. Just on the Work Tools International acquisition, it looks like those brands are actually sold at Lowe's, not at Home Depot. Do you see an opportunity, just given your presence, obviously, in the paint aisle at Depot, to move those brands into Home Depot over time? I'm not going to talk specifically about our plans as we roll this out. You'll see them as we begin to grow. I would say it's consistent with what we've done in the past in terms of looking for expansion, in terms of adjacent products as well as adjacent channels. That's something that we bring to many of these acquisitions. Our focus is on bringing the power of our channel presence and our innovation to acquisitions and then learning from them, be it on online capabilities like with Kraus, or with certain brands. It's a combination. Great, thanks. Your final question from today will come from Keith Hughes from Truist. Your line is open. Thank you. Most of my questions have been answered, but just switching back to International Plumbing, have you seen the sales pace rate decline significantly in the last six to eight weeks versus the fourth quarter, given some of the shutdowns and things going on, particularly in Western Europe, is my question. Keith, no. Just looking at the first couple of weeks of the new year, we've seen continued strong demand in Western Europe. Obviously, some of the markets are different. In core Central Europe, Germany, and China, ahead of Chinese New Year's, sales have been very strong. The U.K., to your point, because of the lockdown, has been a little slower. We like the performance the first couple of weeks of the new year. Okay. Thank you. That concludes today's call. We'd like to thank all of you for joining us this morning and for your continued interest in Masco. As always, please feel free to contact me, David Chaika, at 313-792-5500 if you have any further questions. Thank you, and stay safe. Thank you, everyone. This will conclude today's conference call. You may now disconnect.