Good morning, ladies and gentlemen. Welcome to Masco Corporation's fourth quarter and full year conference call. My name is Emily, and I'll be your operator for today's call. As a reminder, today's conference call is being recorded for replay purposes. To ask a question, please press star then one on your telephone keypad. To withdraw your question, please press the star followed by two. I will now turn the call over to David Chaika, Vice President, Treasurer, and Investor Relations. You may begin. Thank you, Emily. Good morning. Welcome to Masco Corporation's 2022 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 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'll start this morning with some brief comments on our fourth quarter, then I'll turn to our full year results and our view on 2023. Before I get started, however, I'm sure you saw our announcement that John Sznewajs has decided to retire from Masco, effective the end of May, and we are working to identify his replacement. John has been a fixture at Masco and in the industry for over 25 years now and has been an invaluable partner to me, our board, and the investment community during his 15-year tenure as CFO of our company. He will be sorely missed, we wish John all the best in his future endeavors. Now please turn to slide five. In the fourth quarter, our top line decreased 5% as we saw lower volumes across most categories, partially offset by significant pricing actions of 9%. Our operating profit declined in the quarter due to the lower volumes, higher operational costs, and currency. This was partially offset by pricing actions and expense control as SG&A declined $22 million to 17.4% of sales. Our earnings per share for the quarter were $0.65. Earnings per share benefited from a lower average diluted share count as well as effective tax rate of 24%, lower than our previously guided 25%. Turning to our segments. Plumbing grew 2% in local currency with a 1% decline in North American plumbing, offset by 7% growth in international plumbing. Hansgrohe drove market share gains in many key markets, including China, Germany, and France. Our international business has continued to execute well, which speaks to the strength of the Hansgrohe team, its strong brands, and its ability to gain market share. In North America, our spa business has now worked through its extended backlog, and backlogs are now in the normal range of four-six weeks after a tremendous three-year run of more than 50% sales growth. Turning to our Decorative Architectural segment, sales declined 8% against a strong 15% comp. DIY paint sales declined low double digits while pro paint continued its excellent performance with mid-single-digit growth against a tremendous comp of over 50%. Let's review our full year performance. Please turn to slide six. 2022 was a challenging year, with strong growth in the first half, followed by notable declines in demand in the second half. Despite these volatile conditions, Masco and our 19,000 employees across the globe responded well to deliver for our customers and our shareholders. For the full year, the company grew sales 4% for a two-year stacked comp of 21%. Strong pricing actions increased sales by 9%, offset by volume declines of 3% and currency impact of 2%. Volume growth in the first half of the year was more than offset by volume declines in the second half. Operating profit declined 7% with an operating margin of 15.6%, and earnings per share increased to $3.77 from $3.70. Total commodity and other inflation was low double digits for the full year. This inflation, together with supply chain challenges, resulted in lower margins for the year despite our significant pricing actions. We are focused on improving our margins by continuing to drive productivity as we apply our 80/20 mindset to return to our pre-pandemic levels. Turning to our segments. Our plumbing segment grew 6% excluding currency, led by strong growth at both Hansgrohe and Watkins. In our Decorative Architectural segment, full year growth was 6%. DIY paint grew low single digits for the year, while pro paint grew over 25%. Pro paint has had a tremendous three-year run of approximately 70% growth and now accounts for one-third of our paint business or over $900 million. This strong performance earned BEHR its second consecutive Partner of the Year award for The Home Depot. We will continue to invest in our paint business to capture further share in both the DIY and Pro markets. Our recently launched adjacent paint categories, such as aerosols, interior stains, and caulks and sealants, have performed well and are expanding the offering to additional stores and expect further share gains in 2023. We will be launching BEHR DYNASTY Exterior for the summer painting season, expanding the lineup of our number one rated DYNASTY paint line. We will continue to invest in people and capabilities to better serve the pro painter and continue our strong pro performance. Turning to capital allocation. Our strong balance sheet allowed us to deploy approximately $1.2 billion in capital during the year. We repurchased 16.6 million shares or $914 million, representing approximately 7% of our outstanding shares. We increased our quarterly dividend 19% and paid $258 million in dividends to shareholders. We finished the year with net leverage of 1.8 times, providing us ample financial flexibility. Our balanced, disciplined approach to capital allocation and strong cash flow resulted in a return on invested capital of approximately 39%. Lastly, on the ESG front, we believe our business should be part of the solution to the world's climate crisis. Therefore, we have established a target to reduce our emissions by 50% by the year 2030, aligned with science-based targets. This is consistent with our commitment to doing business the right way and our purpose to provide better living possibilities for homes, our environment, and our community. I want to thank all our employees for their outstanding efforts throughout 2022. It is a team effort to continue to deliver for our customers and shareholders. Turning to 2023. We expect the softening demand trends in the second half of 2022 to continue into 2023 as our markets adjust to increasing interest rates, persistent inflation, and tighter consumer spending. Overall, we anticipate volumes to decline in the low double-digit range, offset to a small extent by pricing actions. Our current market assumptions for 2023 are as follows. For the North American repair and remodel market, we expect the market to be down approximately low double digits. This is after a very strong three-year run of approximately 20% growth. For the paint market, we expect the DIY paint market to be down high single digits and the pro market to decline by mid-single digits. For our international markets, principally Europe, we expect markets to contract by high single digits. As a result, we anticipate Masco sales in 2023 to decline approximately 10%. With this lower top-line assumption, we will drive to minimize our decremental margins to be in the low 20% range versus our typical 30% decremental margins. We are focused on recovering the significant cost inflation we experienced over the past two years through operational productivity, supply chain normalization, and additional pricing actions. With this focus, we expect our operating margin to be approximately 15% in 2023. Turning to capital allocation. Our strategy remains unchanged. First and foremost, we will invest in our business to maintain and grow our leadership positions and win in the recovery. The second pillar of our capital allocation strategy is to maintain a strong balance sheet with gross debt to EBITDA levels of below 2.5 times. Third, we have a targeted dividend payout ratio of 30%. Our board declared a 2% increase in our dividend for 2023, which will bring our annual dividend to $1.14 per share and marks the tenth consecutive annual increase. We expect our cash flow conversion to be over 100% in 2023 as we manage our working capital. We will deploy that free cash flow after dividends to share repurchases or acquisitions. Based on our projected free cash flow, we expect to deploy approximately $500 million to share repurchases or acquisitions in 2023. To paying the remaining $200 million of our term loan. There is no change to our M&A strategy. We continue to review and selectively pursue opportunities that have the right strategic fit and the right return for Masco. With the actions we are taking to address this more challenging environment, coupled with our continued strong capital deployment, we anticipate earnings per share for 2023 to be in the range of $3.10 to $3.40 per share. We expect the near-term environment will remain challenging as our markets and the economy adjust to higher interest rates and prices, we believe the long-term fundamentals of our repair and remodel markets are strong. Cyclical factors such as home price appreciation and existing turnover will remain challenged and likely a headwind for 2023. However, structural factors such as consumers staying in their homes longer, the age of housing stock and high home equity at levels will drive increased repair and remodel activity in several ways. Many homeowners have taken advantage of low mortgage rates and are likely to remain in their homes longer. 1.5 million more homes will reach the prime remodeling ages of 20-39 years old over the next three years. Home equity levels remain high and can withstand significant pullbacks in home prices and still be above 2019 levels. All of these structural forces provide tailwinds for our business and increase our confidence for a strong repair and remodel market after the economy stabilizes in 2023. We will continue to invest in our brands, capabilities, and people to outperform the competition in both the near and the long term. With favorable fundamentals and our continued focus on executing our growth strategy, together with our strong free cash flow and capital deployment, we are positioned to continue to drive shareholder value creation for the long term. Now, I'll turn the call over to John to go over our fourth quarter, full year, and 2023 outlook in more detail. John? Thank you, Keith. Good morning, everyone. Before I begin my comments, I want to take a moment to thank Keith, our board, and the entire Masco organization for the opportunity to serve as CFO for more than 15 years. I've had an amazing and fulfilling 27-year career with the company. As I look forward to my retirement, I wish everyone the best. With that, as David mentioned, my comments today will focus on adjusted performance, excluding the impact of rationalization and other one-time items. Turning to slide eight, sales in the quarter decreased 5% and excluding currency decreased 2%. Lower volumes decreased sales by 11%, partially offset by net selling prices, which increased sales by 9%. In local currency, North American sales decreased 5%. Lower volume decreased sales by 14%, partially offset by higher net selling prices, which increased sales by 10%. In local currency, international sales increased 7%, driven by increased selling prices. As it relates to inventory, we believe channel inventories have stabilized as we saw sell-through approximately equal to sell-in, and destocking had minimal impact in the quarter. Our gross margin of 29.5% was impacted by lower volumes and higher year-over-year operational costs in the quarter. Our SG&A as a percentage of sales improved 20 basis points to 17.4% through continued cost discipline. Our operating profit in the fourth quarter was $234 million and operating margin was 12.2%. Operating profit was impacted by lower volumes, higher operational costs, and currency, partially offset by higher net selling prices. Our EPS in the quarter was $0.65. I would like to note that this performance was based on a tax rate of 24% versus the previously guided 25% tax rate due to the implementation of our tax planning strategies. Because of this assumption, we have provided restated adjusted EPS numbers for the first three quarters of 2022 in the appendix on slide 28. Turning to the full year 2022, sales increased 4% over prior year against a healthy count of 17% for full year 2021. Excluding currency, sales increased 6%. Higher net selling prices increased sales by 9%, partially offset by lower volumes, which decreased sales by 3%. In local currency, North American sales increased 6% and the international sales increased 8%. Our SG&A as a percent of sales decreased 90 basis points to 16%. Operating profit for the full year was $1.4 billion and operating margin was 15.6%. Lastly, our EPS increased 2% to $3.77. This amount also assumes a tax rate of 24% versus a previously guided 25%, which favorably impacted full year EPS by $0.05. Our adjusted EPS calculation for 2023 will continue to assume a 24% tax rate. I want to thank our employees across the globe for their hard work and dedication to achieve these solid results during a challenging year. Turning to slide nine. Plumbing sales in the quarter decreased 3%. Excluding the impact of currency, sales grew 2%. Pricing contributed 9% to growth, and volume decreased sales by 7%. North American plumbing sales decreased 1% in local currency. This was driven by lower demand we started to experience in the third quarter. Lower demand was fairly broad-based across product categories and channels. International plumbing sales increased 7% in local currency. Hansgrohe grew sales in many of their key markets, most notably China, Germany, and France. Segment operating profit in the fourth quarter is $148 million, and operating margin was 12.4%. Operating profit was impacted by lower volumes, higher operational costs and currency, partially offset by higher net selling prices. Turning to the full year 2022, plumbing sales increased 2%. Excluding currency, sales increased 6%, with net selling prices contributing 7% to growth, partially offset by lower volume mix, which decreased sales by 1%. In local currency, North American plumbing sales grew 5%, and international plumbing sales increased 8%. Full year operating profit was $834 million, with an operating margin of 15.9%. Turning to slide 10. Decorative Architectural sales decreased 8% for the fourth quarter against that 15% comp. Our pro paint sales increased mid-single digits against a robust comp of over 50% in the fourth quarter of 2021, as we continue to see solid demand for our pro paint offering, strong brands and high-quality products. Our DIY paint sales declined low double digits versus prior year. Additionally, our lighting and builders hardware businesses in aggregate declined mid-teens in the quarter against a solid mid-single-digit comp. Operating profit was $101 million in the quarter, and operating margin was 13.9%. Operating profit was impacted by lower volumes and higher material costs, partially offset by higher net selling prices. Turning to the full year 2022, sales increased 6%, driven by low single-digit growth in our DIY paint business and outstanding pro paint growth of over 25%. Full year operating income was $608 million, and operating margin was 17.7%. Turning to slide 11. Our year-end balance sheet is strong, with net debt to EBITDA at 1.8x. We ended the quarter with approximately $1.5 billion of balance sheet liquidity, which includes full availability of our $1 billion revolver. Working capital as a percent of sales was 17.4% at year-end. In 2023, with expected lower volumes and less supply chain disruptions, we anticipate working capital as a percent of sales to improve and be approximately 16.5% at year-end. In 2022, we also paid down $300 million of the $500 million term loan that we borrowed in the second quarter of the year. During 2022, we repurchased 16.6 million shares for $914 million and returned $258 million to shareholders through dividends. Let's turn to slide 12 and review our outlook for 2023. I'd like to preface our guidance by reminding everyone that these are uncertain times, which makes forecasting extremely challenging. For Masco overall, we are planning for volumes to be down in the low double-digit range, partially offset by low single-digit% pricing. Based on this assumption, we expect 2023 sales to decline approximately 10%, with operating margins of approximately 15%. Currency is projected to have minimal impact on our 2023 results. Our SG&A as a percentage of sales trended below our normal levels during the pandemic. However, as we continue to invest in our businesses for future growth while maintaining cost discipline, we expect this percentage to increase back to a more normalized pre-pandemic level, to be around 17.5% for 2023. As always, we will take appropriate actions to address our costs as the year develops based on market conditions. Operating margins will be impacted more in the first half of the year due to lower volumes and strong year-over-year sales comps, particularly in the Decorative Architectural segment. As we previously discussed, operating profit in the first quarter will also be impacted by the higher operational costs we experienced starting in Q2 last year, particularly in the plumbing segment. As we think about the cadence for the year, we expect our Q1 sales and margin profile to look similar Q4 2022, with our year-over-year operating margins expected to improve each quarter thereafter. In our plumbing segment, we expect 2023 sales to decline in the range of 10%-14%. We anticipate the full-year plumbing margins will be roughly flat with 2022 segment margins at approximately 16%. Lower volumes and in the first quarter, higher operational costs will impact margins with favorable selling price increases partially offsetting these headwinds. In our Decorative Architectural segment, we expect 2023 sales to decline in the range of 5%-10%. Looking specifically at paint for 2023, we currently anticipate our DIY business to decrease high single digits and our pro business to decrease mid-single digits as we cycle over 25% pro paint growth in 2022. We anticipate the full year Decorative Architectural margin to be approximately 16%. This margin is largely due to our significant pricing actions in this segment and typically only recover the dollar amount of the inflation. All else equal, operating profit dollars remain neutral from cost recovery pricing actions, but results in margin compression. We are also planning an increased investment in people and capabilities in 2023 to drive future growth in our pro paint business. As it relates to share repurchases, we have begun modest share repurchases and expect to spend approximately $500 million on share repurchases, with this activity being weighted more towards the second half of the year. As Keith mentioned earlier, our 2023 EPS estimate is $3.10-$3.40. This assumes a 226 million average diluted share count for the year and a 24% effective tax rate. Additional modeling assumptions for 2023 can be found on slide 15 in our earnings deck. I'd like to open up the call for Q&A. Operator? 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. To ask a question, please press star then the number one on your telephone keypad. To withdraw your question, please press star followed by two. Our first question comes from Michael Rehaut with J.P. Morgan. Please go ahead, Michael. Great, thanks so much. John, best of luck. It's been a real pleasure working with you. I can't believe it's been 15 years. You've been a real pro the whole time, so best of luck. Thank you, Mike. Look forward to catching up with you later. Sounds good. First question, you know, I appreciate the 2023 guidance and particularly the volume assumptions, which I think are, you know, more conservative than your peers and so far at least this earning season and appropriate. I wanted to focus though on the decorative margins, and, you know, your comments around, you know, the fact that the cost inflation recovery doesn't include margin in that price. Hence the margin decline. You know, when you look at the margins versus the last 10, 15 years, you know, decorative has consistently done, you know, an 18%+ margin. This would be somewhat of a low. I was hoping to get a sense of, you know, if not for 2023, perhaps 2024, 2025, how you're thinking about the business if, you know, cost deflation might help reverse some of that margin contraction, if that might occur later this year, or is, you know, perhaps there's anything structurally different about the business, either with Pro perhaps having a slightly lower margin or, you know, other factors to consider relative to the longer term average? Well, hey, Mike, this is Keith. As you pointed out, the past two years have really been unprecedented in recent times anyway, with regards to the rate of inflation, coupled with supply chain difficulties which clearly impacted our margins. We are absolutely focused on wringing the cost out of our operations and taking additional price, where needed. When you look at the impact of this significant inflation, and we've talked about this, before, when you, particularly in our paint business, recover the dollars, we perform well in the overall dollars. But a significant margin erosion arises from that dollar-only coverage when you talk about increases to this level. There will be incremental pricing that we take as we move through the year in some parts of our business. We expect these levels that are that we're experiencing in 2023 to be the base of which we will build going forward. When you think about that with regards to our 30% incremental leverage on additional volume, that would actively improve our margins. We anticipate and are driving very nice at margin expansion as we get through 2023. We do feel that this is going to be a relatively short-lived recession. I'm reluctant to put a number on where we can go to, but I think if you, if you think about the margins historically that we experienced pre-pandemic, that's certainly where this business is heading. Mike, maybe I can give you know, in addition to Keith's comments, maybe give you a little more color specifically as it relates to the Decorative Architectural segment, and, you know, the margins there. You know, to your point that you raised, you know, obviously we cover the dollar cost of inflation and maybe to put a finer point on that, if you consider, you know, if we take a 10% price increase in the segment, that will result in roughly 180 basis points of margin compression. While we maintain our operating dollars at flat levels. To the point that you were making, yeah, clearly the what we're seeing now and what we're foreshadowing for 2023, a big part of, you know, our 2023 guide versus historical performance relates to the cost recovery that we're getting on inflation. The other thing that I would point you to, you know, in Keith's prepared remarks and my prepared remarks, we talked about that we're gonna make some incremental investment particularly in the Decorative Architectural segment around the pro business. That's also having an impact on 2023 margins. To the point you also raised, to the extent that commodities were to roll over and there would be, you know, co-input cost deflation, you know, you would see some margin expansion, as a result of, you know, that due to the fact that there could be some pricing concessions that we would give when commodities roll over. You know, that's how that math would work. I think your point is well taken, and I think that helps explain the 16% versus our historical margin. Okay. No, that's a great answer. You know, before I ask my second question, you know, perhaps you could fold it in. You know, you highlighted the incremental investment in pro. I'd be curious to know how much of a drag that might be in this current upcoming year. You know, secondly, I mentioned also that, you know, overall, volume, expectations for 2023, I think being, you know, much more conservative than some of your peers, and we're certainly in that direction ourselves in terms of how we're thinking about things. What would be helpful, and sorry if I missed that earlier, you know, if you think about the low double-digit volume decline, you kind of broke it out between, I believe, you know, how you're thinking or at least on a top-line basis, you know, the two segments. From an end market perspective, I'd assume that, repair remodel and market demand, you're thinking about on a similar level, but correct me if I'm wrong. Also how that, you know, other end markets that you play in, such as Europe or new res, which is admittedly pretty small. You know, how those different end markets play into the down low double digits and, you know, if you're expecting that to kind of accelerate as the year progresses? Thanks. Mike, maybe it'd be helpful if I kind of go through our principal markets and talk through our assumptions as it relates to overall market performance. The big one obviously is North American Repair and Remodeling, and in general, we're looking at that market to be down low double digits%. International, obviously a significant portion of our business we're calling to be down high single digits%. As we talked a little bit already in terms of the paint market, we think broadly of that in obviously in two markets, the DIY and the pro market. Our estimation is that the DIY market will be down high single digits%, and the pro market would be down mid-single digits%. We look at to get those numbers, we look at trends that we see and numbers that we evaluate in terms of industry research, and we come to an assumption on how that all filters out. Importantly, we look at how we were performing in the back half of 2022, and we roll that in with our R&R focus and industry research to come up with our estimations are where they are. Now, obviously, we've heard and talked to many folks who have different views, so it really is a matter of the point of view that we take. If that point of view varies, I think you can see that we consistently have delivered 30% drop down on incrementals. When we see some pullbacks like we're expecting in 2023, we will case decrementals that look better than that 30%. We are ready to not only flex our business down and have demonstrated that with regards to cost control and working through issues associated with variable productivity and lining up our supply chains to address a new volume level, but we're also committed to investing in the key growth levers of our business. Pro being one, in pro paint, investing in high growth markets for us. We've talked about how successful we've been in China and in Europe. We continue to do that. Then, of course, the core business here in North America. Hopefully that gives you an idea about our perspective and why our guidance is what it is and how this business is ready to do what I think is most important in these times of volatility, and that is to adapt to changes as they come. Great. Our next question comes from Stephen Kim with Evercore. Please go ahead, Stephen. Yeah. Thanks very much, guys. Again, John, I'm sure you're gonna get a lot of this, but it's been a pleasure and best of luck. First question for you, I guess sort of at a high level, I understand that, you know, certainly, things are uncertain and, you know, you don't wanna lean too much, I suppose, on your outlook for later in FY 2023. You did provide some commentary about a quarterly cadence, which I found very helpful. I was curious as to whether when you said that you anticipate that, you know, the sales growth and the margins would improve, quarter by quarter as you make your way through 2023, is it your sense that by the time you get to the end of the year, we could actually be looking at some, you know, positive comparisons, you know, on the top line, and, you know, and then certainly on the margin as well? Stephen, you know, the guidance, you know, that we gave on in terms of the cadence, obviously we said, you know, Q1's gonna look a lot like Q4 of last year. When we said from there operating margins should expand on a year-over-year basis each quarter thereafter. You know, to your question on whether we should see positive sales comps by year-end, just, you know, given the double-digit decline that we're, you know, the approximately 10% decline that we're expecting in sales for the year, you know, it's hard to say how Q4 is gonna develop at this point, but, you know, this, at this stage, I probably wouldn't count on positive comps in Q4. Okay. That's helpful. Thanks for that. Then, just a sort of a broader question, about your expectations. You know, obviously 4Q came in a little bit lighter than I think you were expecting. What's interesting to me is the timing of, you know, when you provided that commentary or outlook was right about when mortgage rates were peaking in the U.S. I would say in general, since, you know, late October, there's a kind of been a growing sense in the U.S. housing market that perhaps we've at least, you know, we can see where the bottom is. January was actually surprisingly strong. I know you're gonna say that, you know, one month doesn't a quarter make and all that. If you could just sort of comment a little bit as to what it is that worsened relative to your expectations, despite the fact that maybe the housing market, which is sort of the, the leading indicator perhaps, looks like it's actually gotten better. Yeah. Maybe Stephen, I'll start off and maybe Keith you can chime in. You know, I know you're tying things off the housing market. I just wanna remind everyone on the call that, you know, the housing, you know, the new construction market really doesn't impact us all that much. It's about 10% of our revenue. You know, as what we look at in the fourth quarter with, you know, our demand that we are seeing, and also, you know, how the consumer's behaving, you know, that's what really kinda drove us to the guide that we're giving right now. The other thing I would say, you know, as you think about 2023 and think about some of our businesses, you know, Keith in his prepared remarks talked about how our spa business, which has been a strong growth engine for us during the pandemic, its backlogs are now down to more normalized levels. You know, as we think about that, you know, product category in particular, as we go into 2023, just given the high ticket nature of that product, we do expect that will probably weigh more heavily on plumbing growth in 2023. You know, it's broadly around what we're seeing relative to the consumer right now. But Keith, I don't know if there's something else you wanna add. Sure. Stephen, if you think the fundamental question of if things are better, you know, what would that drive in our business? I think we've covered that in terms of thinking about our drop downs on the incrementals and how we manage on the down with the decrementals. I would also put a finer point on this notion of volatility and things can change. Sure, yes, absolutely a month doesn't a quarter make and a quarter doesn't make the year, particularly if you think about our business and our industry is, you know, in June or July, then what ended up happening in the kind of a tale of two halves of last year. Things can change and this is a volatile time and we're specifically focusing our organization on adaptability and looking at signals. In terms of how our guide or how the industry may improve, you point to rates, obviously that's a factor. We are a repair and remodeling company, a little bit of new construction, but fundamentally we're in repair and remodeling. Some of the things that could change the assumption for us would be home prices and home equity holding up better than expected, for example. Certainly an increase in existing home sales would help. When you think about, you know, our international down high single digits, if we saw better than expected GDP in U.S., Europe, in China, that would clearly help. We're strongly related to consumer confidence. You know, on the performance side, the ability for us to gain more share than expected. There are things that we're watching and that could drive the economy to perform better than our guide. Again, I'll take us back to our fundamental message here is, we have a very adaptable business, small ticket used on big projects, used on small projects. We cover very effectively on the premium segment in China, a brand leader in Europe, and of course a strong fundamental base here in North America. Our business is built for that and for these sorts of things in terms of variability, and that's what we're driving. There are areas, Stephen, that could lead to better than expected performance on the overall macro. Great. Thanks a lot, guys. The next question comes from Michael Dahl with RBC Capital Markets. Michael, please go ahead. Good morning. Thanks for taking my questions and I'll ask others. John, congrats. It's been a heck of a ride, and look forward to catching up more offline. A couple follow-ups here on the cost side. I think that the discussion with Mike earlier around the paint side was helpful. Just to follow up there, you know, some of your peers in paint have been talking about deflation coming through as the next couple quarters progress. Maybe you can give us a sense of how you're thinking about costs and how you're seeing costs in the paint business? Also let's expand that and, you know, plumbing, it seems like was gonna have some tailwinds. Now maybe copper is back up some. You know, give us a little more color on what you're seeing on plumbing costs as we look through this year? Thanks. Thanks, Mike. Keith, I'll start off on the paint raw basket and give you a perspective on what we're seeing in terms of inflation and how we're thinking about that. If you look at our overall paint raw material baskets, while we have seen some relief in feedstocks for resin, but TIO2, for example, and other specialty chemicals are very sticky and remain elevated. We are continuing to see overall in the basket an elevation. On the indirect costs, which is a big portion of our raw materials and our manufacturing process, we are seeing continued inflation, so it remains a challenge. I'm talking about things like pallets, transportation, labor absolutely is still elevated. We've seen some sequential moderation, but the raws continue to remain relatively elevated. We're still recovering from significant cost increase that we've incurred over the past couple years. At this point, we really have minimal raw material deflation built into our plans for 2023 and don't expect to see it. That's based on what we're currently seeing, you know, from our supply base and from the market. Mike, maybe I'll take the plumbing side of the equation. You know, as you know, as you looked at some of the base metals, copper, zinc that go into our plumbing products, you know, obviously the inflation there was pretty significant in the year, you know, below double digits. If you looked at the prices through the course of 2022, they probably peaked in the second quarter, and we saw some moderation in Q3 and Q4 of last year in those commodities. That said, you know, since the year's begun, we've seen a little bit of an uptick in both of those copper and zinc. They're still elevated, but off their highs obviously. Ocean freight, which is another good input, you know, a significant input for us on that side, has moderated as well, but it's still, you know, compared to historical levels, it's above normal levels. Obviously, you know, wage inflation still is something that we're dealing with. Some of the things that are also impacting us in the plumbing segment, Mike, are energy costs in Europe. You know, as you might expect, given what's going on over there, you know, that's offset. Any of the, you know, the benefit from moderating demand or moderating inflation in the raw materials has been partially offset by some of these things. You know, net, where do we land on this in 2023? You know, we think we'll expect, we're expecting a low single-digit deflation in our plumbing input basket as we continue to recoup, some of the cost increases that we've incurred over the course of the last couple years. That's great. Thank you both. That's very helpful. On my follow-up question, I wanted to ask about the SG&A. The comment that it's going back 17.5%, certainly, you know, conceptually understand the idea of needing to invest in the business and some of the baskets qualitatively that you've talked about. When I, when I look at the numbers, I mean, what that really implies is, you know, you're guiding sales to be down, give or take, you know, $900 million year-on-year with SG&A dollars down, you know, in material now maybe $20 million-$25 million. That seems like an awful lot of reinvestment. Maybe you can help us understand a little bit more or bucket out, you know, quantitatively some of the things that you've discussed in terms of what's sticky outlook on SG&A dollars. Yeah, Mike, maybe I'll give you a couple and then Keith, you know, feel free to add to supplement my comments. You know, Mike, you know, you're right. You know, we are guiding SG&A as a percent of sales to be up. You know, a big part of it is what you referred to. You know, obviously, we're foreshadowing sales down 10% for the year, which will have an impact on the margins. I think the other thing to point out, two things I guess I would point out, one is the reinvestment that we're making in SG&A, and some of that comes in a couple different forms. You know, some of it is the pro investment that Keith referred to, some of the headcount, you know, pro sales reps and things like that we'll be adding some more feet on the street, some job site delivery. Like in Q1, for instance, there's a couple of large trade shows that we historically went to, but were really suspended during the pandemic. This is the first time that we are going back to those in several years. That will be an expense for us. I'd also point out in, you know, like in 2022, for instance, you know, there are certain variable costs that were just lower in the year, and we're projecting those to come back to more normalized levels in 2023. You know, those, there's two or three things, you know, that would be impacting our SG&A for next year. Keith, I don't know if there's anything else you wanna add. Mike, when you think about it in kind of in general areas, the economy's coming back. The way that we approach growth and the way we develop advocacy in the markets, you have to be out in those markets. I think you were at KBIS in Las Vegas. That's an example of, you know, a big national kitchen and bath show in the United States. Every two years, there's a similar, even bigger show, I know you're aware of this, in ISH, where we have significant investments and big presence there as a matter of course, of business. That hasn't happened in four years, and that's coming back this year. There's other examples of that across the globe where we're investing in what I would say is a more normalized way of building advocacy for our brands and launching our new products. When you look, for example, in Europe at ISH, we've always had our significant competitor in a very big position out there. They've made the decision not to reinvest and won't be there. We don't think that's the right thing to do. In fact, we're leaning into that investment. We're showing a great new product assortment with Hansgrohe in terms of our showers and our faucet launch. We're getting into adjacent products with our bath furniture, and we're continuing to build our brand. When you look at where we're investing in continued growth and continued momentum, you look to the Pro, as John mentioned. That's an investment for us. Pro loyalty has been building over the last three years. We've gained significant share, and we intend to continue to outgrow that market. Adding more people on the street to continue to get new customers, new painting customers to try our products, we've seen that be very successful when they try it. There was a lot of question on our ability to maintain the share gain and the stickiness. We've done that. We're focused on continuing to drive those share gains, and it takes an investment to do that. In terms of operations, things like buy online, pickup in store, expanding delivery options, expanding the Pro sales force, as I mentioned, working and expanding our loyalty programs. This is all fundamentally, part of our, our strategy. At the end of the day, we're committed to managing our decrementals in the downturn, while at the same time investing so that we win and exit stronger coming out of this recovery. We think that's the right equation for our business. That's great. Very comprehensive. Thank you both. The next question comes from Matthew Bouley with Barclays. Matthew, please go ahead. Morning, everyone. Thanks for taking the questions. Also wanna extend my best wishes to John. Apologies if I missed this. I have some call issues. On the revenue guide for plumbing, the down 10%-14%, I think you had talked about Q1 sales results for the whole business perhaps looking similar to Q4. I'm assuming you're saying something similar for plumbing. Therefore, the assumption would be, you know, a rather sharp deceleration in the plumbing segment beyond Q1. I guess, you know, number one, correct me if I'm wrong, number two, can you sort of help us out with, you know, any additional cadence there and any kind of specifics around, you know, whether it's the spa business that's moving the needle or, you know, some assumed destocking? Anything along those lines to help us on that plumbing guide. Thank you. Yes. Sure, Matthew. I'll give you a little bit of color on that. You touched on it partly in your question. You know, a portion of what we expect to see happen in the year in plumbing is due to the spa business because it is a high-ticket item, and it's one that, as Keith mentioned in his prepared remarks, is now back at normalized backlog levels, or, you know, backlogs. That's a portion. The other portion that I would guide you to think about is, you know, if you look at the sales cadence through the course of 2022, plumbing had much less of a pullback than our paint business did in 2022. You know, as we see the calendar roll to 2023, you know, partly due to the spa business, partly due to some of the stronger comps that they're gonna be facing in the first part of the year, you know, we should expect to see a little bit more softness perhaps in the plumbing segment as a result of those strong comps that they faced. Matthew, you mentioned destocking, and I know there's been talk out in the industry of that and various channels. We did see, I'll call it moderate to very moderate destocking in plumbing in Q4, a little bit in North American wholesale and less in retail. It really wasn't significantly material for us, and we're not expecting significant headwinds from destocking in 2023. All right. Thank you for that. That's super helpful. The second one, sticking with plumbing, on the margin side and the guide there. I mean, it seems like the assumption on the decremental is, I guess, you know, on the softer end of, you know, the low 20s you mentioned for the entire business for the year. You know, I heard you say earlier you're not assuming much in terms of raw material tailwinds for the business. You know, just kinda any help on kinda what you are assuming there? You know, is it ocean freight, et cetera? What are some of the areas where you feel like you can sort of manage that decremental in 2023? Thank you. The biggest impact is the plan volume reduction. The way we impact that is to drive productivity and to reset our manufacturing and supply chain. As you might imagine, we're working hard to equalize shifts to make sure we're continuing to drive productivity in the variable overhead line. We always drive and focus on our direct labor and shifting that direct labor down. We have had, as we talked about, really starting in the back half of last year's operational and supply chain challenges, and it really is on rhythm and getting our supply base to deliver us and deliver it in a way that's synchronous with what we expect and how we have our build schedule, so we can be very efficient. That's still a challenge. Now we're significantly better. That challenge will remain, through Q1. Coming out of Q1, we're gonna have that behind us and have our productivity where we expect it to be. Lower volumes is the principal driver of the margin pressure, and then higher costs that, you know, we'll work through early in the year. Got it. All right. Thanks, Keith. Thanks, John. Good luck, guys. Thanks. Thanks. Yeah. The next question comes from John Lovallo with UBS. John, your line is open. Good morning, guys. Thank you for taking my questions. John, best of luck with everything. The first question, I guess is, are you guys anticipating implementing additional pricing actions in 2023, or is it really just largely carryover pricing at this point? No, we'll have some additional actions. You know, there's spots of our plumbing business that we're looking at, and we'll be implementing price. Then, you know, in our decorative business, as I mentioned with our commodity basket, we're continuing, you know, to see elevation there and we'll watch that. Got it. Okay. I think the outlook for $500 million of either acquisitions or buybacks, and I think you mentioned buybacks would be sort of back half weighted. Just more curious on the acquisition front, I mean, what you're seeing in terms of pipeline there. Yeah. I'll take that, John. You know, our corporate development team is active, and we as a management team are active in, you know, the cultivation process of acquisitions. At the same time, you know, as you might imagine in this environment, there, you know, the conversations, you know, are probably not as productive, you know, just given some of the softening of performance in businesses through the course of the back half of 2022. That said, you know, you never know when people are gonna transact, and so we have to be out there. We have to be engaged. We've got the team out there and actively looking. That's, you know, and so, you know, it's always hard to forecast what may develop through the course of 2023. That's why we're guiding for everyone to think more about share repurchases at this moment. Keith, I don't know if there's. Yeah. I think, you know, it remains to be seen, but the cost of capital and the leverage limitation that that represents, could make it a little bit more difficult for financial buyers and could help us. We are seeing a little bit of a slower deal flow, but again, very active in the cultivation and trying to make sure that we drive strategic fit and right return. Makes sense. Thanks, guys. The next question comes from Garik Shmois with Loop Capital Markets. Please go ahead. Oh, hi. Thanks. Just curious on the DIY paint side with the down low double digits in 2023. This category has been certainly up against some tough comps, but it has been trending, you know, lower from a growth perspective. Just wondering, are we at pre-pandemic levels for DIY paint? you know, any perspective of how we are there relative to history would be great. Yeah. As we look at our DIY paint volumes, Garik, you know, we are at roughly 2019 volumes, if not just slightly under them right now. You know, we, you know, the market has kind of reverted back to those 2019 levels. I would say that the fundamentals. Okay. How we look at that market are still supportive of long-term growth for DIY, particularly the millennials. That's a big cohort. They're clearly influxing into the housing market. We've seen based on our basic research that they're more than willing to pick up a paintbrush and do their own painting. I think that's a position that will bode well for us as our brand gains more and more traction and really a leadership position with those millennials when they look at the data that we see. Yeah. The other thing I would point out, Garik, you know, I should have mentioned this earlier, to the extent that the economy does soften, you do tend to see a shift more toward DIY. Consumers take on projects, more projects themselves, as opposed to have the projects done for them. You know, that could be a tailwind for us as we go into 2023. You know, if you think about the pandemic and how that played out as it relates to a significant growth early in the pandemic with DIY, then as that fear, if you will, of foes coming into your house abated as the pandemic was more under control, that shifted it over to pro growth. I think the position that we have with our outstanding partnership with The Home Depot in terms of being able to cover that variability in those shifts. Our pro business is very strong now. Different shifts in the market, and potentially different shifts from one part of that market, say DIY to Pro. We like our brand, and we like what our brand represents to both the end consumer as well as the professional. No, great. Thanks for the color. On the pricing side, I know you mentioned you're looking at some targeted price increases. I'm curious, just given some of the softening of demand, are you seeing any pushback on pricing? Any impact on mix at all? Where we're talking about our targeted price increases for 2023, it's mainly in plumbing. We've got some international price increases planned in some spots. I think we have some on certain parts of our assortment in North America. That gives you a little bit of color. In terms of pushback, to date, not really. I think, you know, it's all about the price-value relationship and the service that we bring, and our customers and channels are well aware of the costs that we're experiencing, not only in the direct material front, but really, as I talked a little bit before, referencing our paint basket, the way we ship our packaging, our freight costs, our labor costs, those sorts of things. I would say not any more pushback than you would normally see. On the mix front, a little bit of trade down, you know, slight trade down in our plumbing business we've seen in spots, but really nothing that I would call significant at all in 2022, and nor do we expect it in 2023. You know, that's a part of that, similar to our coverage across DIY and Pro in paint as it relates to being able to address market swings. We also have broad assortments, and we cover price points, and we have styles and various technologies that fit for different people. We're prepared for those kinds of changes if they come, but we're really not anticipating very much mix shift at all. John, the one point that I would just add to Keith's good comment is, if you think about price for 2023, you know, the significant majority of price will be carryover price, you know, rather than newly implemented price in 2023. I just wanna make sure that that distinction is very clear to everyone. Our final question today comes from Keith Hughes with Truist. Keith, please go ahead. Thank you. I just wanna go back on the guidance in plumbing. You highlighted several things that have, you know, done well, particularly the spa business. They're coming off some big numbers. Is there any other detail you can give us? The decline you're forecasting is, you know, greater than your or equal to or greater than your decline in remodel that you're assuming. What else is going on there? I think, John touched on this a little bit earlier, Keith, is if you think about our paint business, that adjusted volume-wise kind of mid-year. The plumbing business was a little bit later to do that. You know, that's I think that's a, you know, a combination of larger backlogs, bigger projects that tended not to flex so much. I think that carryover helps to account for a little bit more of a volume reduction guide on plumbing than we have on paint. Will it follow the same cadence you talked about earlier, or will the decline be more rapidly during the year, based on your forecast? I think, Keith, it would be kind of the same similar cadence that we described earlier, where a little bit more impact in the first part of the year, given the stronger comps that we're up against. You know, we get into easier comps in the back half of the year. Okay. Thank you. I'd like to thank all of you for joining us on the call this morning and for your interest in Masco. This concludes today's call. Thank you everyone for joining us today. The call is now concluded, and you may disconnect your lines.