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Masco Corporation Reports Third Quarter 2019 Results

BusinessWire - Wed Oct 30, 6:00AM CDT

Masco Corporation (NYSE:MAS), one of the world's leading manufacturers of branded home improvement and building products, reported its third quarter results.

"We delivered solid sales and operating profit growth in the quarter, as well as strong margin expansion," said Masco President and CEO, Keith Allman. "This performance was driven by growth in both our Plumbing Products and Decorative Architectural Products segments. Additionally, we continued our focus on creating shareholder value and returned $186 million to shareholders through share repurchases and dividends during the quarter."

2019 Third Quarter Commentary

On a reported basis, compared to third quarter 2018:Net sales increased 2 percent to $1.9 billion; in local currency, net sales increased 3 percentIn local currency, North American sales increased 3 percent and international sales increased 5 percentGross margins increased 150 basis points to 34.2 percent from 32.7 percentOperating profit increased 10 percent to $316 millionOperating margins increased 120 basis points to 16.2 percent from 15.0 percentIncome from continuing operations increased to $0.64 per share, compared to $0.55 per shareCompared to third quarter 2018, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent, were as follows:Gross margins increased 80 basis points to 34.4 percent compared to 33.6 percentOperating profit increased 8 percent to $326 million from $303 millionOperating margins increased 80 basis points to 16.7 percent compared to 15.9 percentIncome from continuing operations increased to $0.68 per share, compared to $0.61 per shareLiquidity at the end of the third quarter was $475 millionRepurchased 3.8 million shares in the quarter

2019 Third Quarter Operating Segment Results

Plumbing Products' net sales increased 1 percent (3 percent excluding the impact of foreign currency) due to growth in both North America and internationalDecorative Architectural Products' net sales increased 5 percent due to strong growth in paints and other coating productsCabinetry Products' net sales decreased 3 percent due to mix, partially offset by pricing

"We are pleased with our performance in the third quarter and with the progress we are making on the anticipated divestitures of our Cabinetry and Windows businesses. During the quarter we completed the sale of our UK Window business and announced the signing of a definitive agreement to sell our Milgard Windows and Doors business," said Allman. "After accounting for our Windows businesses as discontinued operations, we now expect adjusted earnings per share from continuing operations to be in the range of $2.52-$2.56 for the full year."

About Masco

Headquartered in Livonia, Michigan, Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes Behr(R) paint; Delta(R) and Hansgrohe(R) faucets, bath and shower fixtures; KraftMaid(R) and Merillat(R) cabinets; Kichler(R) decorative and outdoor lighting; and HotSpring(R) spas. We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders. For more information about Masco Corporation, visit www.masco.com.

The 2019 third quarter supplemental material, including a presentation in PDF format, is available on Masco's website at www.masco.com.

Conference Call Details

A conference call regarding items contained in this release is scheduled for Wednesday, October 30, 2019 at 8:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (855) 226-2726 (855-22MASCO) and from outside the U.S. at (706) 679-3614. Please use the conference identification number 4086468. The conference call will be webcast simultaneously and in its entirety through Masco's website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on Masco's website.

A replay of the call will be available on Masco's website or by phone by dialing (855) 859-2056 and from outside the U.S. at (404) 537-3406. Please use the conference identification number 4086468. The telephone replay will be available approximately two hours after the end of the call and continue through November 30, 2019.

Safe Harbor Statement

This press release contains statements that reflect our views about our future performance and constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "outlook," "believe," "anticipate," "appear," "may," "will," "should," "intend," "plan," "estimate," "expect," "assume," "seek," "forecast," and similar references to future periods. Our views about future performance involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements.

Our future performance may be affected by the levels of residential repair and remodel activity and new home construction, our ability to maintain our strong brands and reputation and to develop new products, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of raw materials and increasing tariffs, our dependence on third-party suppliers, risks associated with international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, including the potential divestitures of our Cabinetry and Windows businesses, our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire, our ability to attract, develop and retain talented personnel, risks associated with our reliance on information systems and technology, and our ability to achieve the anticipated benefits from our investments in new technology. These and other factors are discussed in detail in Item 1A, "Risk Factors" in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Any forward-looking statement made by us speaks only as of the date on which it was made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

MASCO CORPORATION
Condensed Consolidated Statements of Operations - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (in millions, except per common share data)
                                                                                                                                        
                                                                                               Three Months Ended                                                                               Nine Months Ended
                                                                                                                     September 30,                                                                                                      September 30,
                                                                            ----------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------
                                                                         2019                                   2018                                  2019                                  2018
                                                                            ----------------------------------                        ----------------------------------                        --------------------------------                        ----------------------------------
Net sales                                                                         $   1,947           $   1,904          $  5,787           $   5,743  
Cost of sales                                                                         1,282               1,281             3,813               3,832  
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                        665                 623             1,974               1,911  
   Gross profit
                                                                                                                    
Selling, general and administrative expenses                                            349                 337             1,047               1,041  
Impairment charge for other intangible assets                                --      --                 9      --  
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                        316                 286               918                 870  
   Operating profit
                                                                                                                    
Other income (expense), net:                                                                                                           
Interest expense                                                                        (39 )                                  (38 )                               (119 )                                 (117 )
Other, net                                                                               (8 )                       --               (16 )                                  (12 )
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                     (47 )                                  (38 )                               (135 )                                 (129 )
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                        269                 248               783                 741  
   Income from continuing operations before income taxes
                                                                                                                    
Income tax expense                                                                       73                  67               202                 188  
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
Income from continuing operations                                                       196                 181               581                 553  
                                                                                                                    
(Loss) income from discontinued operations, net                                         (58 )                                   10               (64 )                                   23  
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                        138                 191               517                 576  
   Net income
                                                                                                                    
Less: Net income attributable to noncontrolling interest                                 12                  11                35                  36  
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                  $     126           $     180          $    482           $     540  
   Net income attributable to Masco Corporation
                                                                            ======= ======= ====================                      ======= ======= ====================                      ====== ====== ====================                      ======= ======= ====================
                                                                                                                    
Income (loss) per common share attributable to Masco Corporation (diluted):                                                            
                                                                                  $    0.64           $    0.55          $   1.87           $    1.66  
   Income from continuing operations
                                                                                      (0.20 )                                 0.03             (0.22 )                                 0.07  
   (Loss) income from discontinued operations, net
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                  $    0.44           $    0.58          $   1.65           $    1.73  
   Net income
                                                                            ======= ======= ====================                      ======= ======= ====================                      ====== ====== ====================                      ======= ======= ====================
                                                                                                                    
Average diluted common shares outstanding                                               287                 306               290                 309  
                                                                            ==============  ====================                      ==============  ====================                      ============  ====================                      ==============  ====================
                                                                                                                    
Amounts attributable to Masco Corporation:                                                                                             
                                                                                  $     184           $     170          $    546           $     517  
   Income from continuing operations
                                                                                        (58 )                                   10               (64 )                                   23  
   (Loss) income from discontinued operations,
   net
                                                                            --------------  --------------------                      --------------  --------------------                      ------------  --------------------                      --------------  --------------------
                                                                                  $     126           $     180          $    482           $     540  
   Net income attributable to Masco Corporation
                                                                            ======= ======= ====================                      ======= ======= ====================                      ====== ====== ====================                      ======= ======= ====================

Historical information is available on our website.

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                              
                                                                                                     Three Months Ended                                                                                Nine Months Ended
                                                                                                                           September 30,                                                                                                       September 30,
                                                                                  ----------------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------------
                                                                               2019                                   2018                                   2019                                   2018
                                                                                  ----------------------------------                        ----------------------------------                        ----------------------------------                        ----------------------------------
Gross Profit, Selling, General and                                                                                                             
Administrative Expenses, and Operating
Profit Reconciliations
---------------------------------------------------------------------------------
                                                                                                                            
Net sales                                                                               $   1,947           $   1,904           $   5,787           $   5,743  
                                                                                  ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                            
Gross profit, as reported                                                               $     665           $     623           $   1,974           $   1,911  
Rationalization charges                                                                         5                   2                   7                   5  
Kichler inventory step up adjustment                                               --                  15      --                  40  
                                                                                  --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------
Gross profit, as adjusted                                                               $     670           $     640           $   1,981           $   1,956  
                                                                                  ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                            
Gross margin, as reported                                                                    34.2 %                                 32.7 %                                 34.1 %                                 33.3 %
Gross margin, as adjusted                                                                    34.4 %                                 33.6 %                                 34.2 %                                 34.1 %
                                                                                                                            
Selling, general and administrative expenses, as reported                               $     349           $     337           $   1,047           $   1,041  
Rationalization charges                                                                         4      --                   4      --  
Professional fees related to potential divestiture                                              1      --                   4      --  
                                                                                  --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------
Selling, general and administrative expenses, as adjusted                               $     344           $     337           $   1,039           $   1,041  
                                                                                  ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                            
Selling, general and administrative expenses as percent of net sales, as reported            17.9 %                                 17.7 %                                 18.1 %                                 18.1 %
Selling, general and administrative expenses as percent of net sales, as adjusted            17.7 %                                 17.7 %                                 18.0 %                                 18.1 %
                                                                                                                            
Operating profit, as reported                                                           $     316           $     286           $     918           $     870  
Rationalization charges                                                                         9                   2                  11                   5  
Kichler inventory step up adjustment                                               --                  15      --                  40  
Impairment charge for other intangible assets                                      --      --                   9      --  
Professional fees related to potential divestiture                                              1      --                   4      --  
                                                                                  --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------
Operating profit, as adjusted                                                           $     326           $     303           $     942           $     915  
                                                                                  ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                            
Operating margin, as reported                                                                16.2 %                                 15.0 %                                 15.9 %                                 15.1 %
Operating margin, as adjusted                                                                16.7 %                                 15.9 %                                 16.3 %                                 15.9 %

Historical information is available on our website.

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (in millions, except per common share data)
                                                                                                                               
                                                                                      Three Months Ended                                                                                Nine Months Ended
                                                                                                            September 30,                                                                                                       September 30,
                                                                   ----------------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------------
                                                                2019                                   2018                                   2019                                   2018
                                                                   ----------------------------------   -------------------- ----------------------------------                        ----------------------------------   -------------------- ----------------------------------
Income Per Common Share Reconciliations                                                                                         
------------------------------------------------------------------
                                                                                                             
Income from continuing operations before income taxes, as reported       $     269           $     248           $     783           $     741  
Rationalization charges                                                          9                   2                  11                   5  
Kichler inventory step up adjustment                                --                  15      --                  40  
Impairment charge for other intangible assets                       --      --                   9      --  
Professional fees related to potential divestiture                               1      --                   4      --  
(Earnings) from equity investments, net                                         (1 )                       --                  (1 )                                   (2 )
                                                                   --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------
Income from continuing operations before income taxes, as adjusted             278                 265                 806                 784  
Tax at 25% rate                                                                (70 )                                  (66 )                                 (202 )                                 (196 )
Less: Net income attributable to noncontrolling interest                        12                  11                  35                  36  
                                                                   --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      --------------  --------------------
Income from continuing operations, as adjusted                           $     196           $     188           $     569           $     552  
                                                                   ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                             
Income from continuing operations per common share, as adjusted          $    0.68           $    0.61           $    1.96           $    1.79  
                                                                   ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                             
Average diluted common shares outstanding                                      287                 306                 290                 309  
                                                                   ==============  ====================                      ==============  ====================                      ==============  ====================                      ==============  ====================

Outlook for the Twelve Months Ended December 31, 2019

Twelve Months Ended
                                                                                                     December 31, 2019
                                                                ------------------------------------------------------------------------------------
                                                           Low End                             High End
                                                                --------------------------------                        --------------------------------
Income Per Common Share Outlook                                                    
---------------------------------------------------------------
                                                                
Income from continuing operations per common share                   $   2.41          $   2.45  
Rationalization charges                                                  0.04              0.04  
Impairment charge for other intangible assets                            0.03              0.03  
Professional fees related to potential divestiture                       0.02              0.02  
Allocation to participating securities per share (1)                     0.02              0.02  
                                                                ------------  --------------------                      ------------  --------------------
Income from continuing operations per common share, as adjusted      $   2.52          $   2.56  
                                                                ====== ====== ====================                      ====== ====== ====================

(1) Represents the impact of distributed dividends and undistributed earnings to unvested restricted stock awards in accordance with the two-class method of calculating earnings per share.

Historical information is available on our website.

MASCO CORPORATION
Condensed Consolidated Balance Sheets and Other Financial Data - Unaudited
September 30, 2019 and December 31, 2018
                                                                                                                       (dollars in millions)
                                            
                              September 30, 2019                          December 31, 2018
                                      --------------------------------------                        --------------------------------------
Balance Sheet                                                  
                                                               
  Assets
                                                               
  Current Assets:
                                              $       475             $       553  
     Cash and cash investments
                                                    1,177                   1,068  
     Receivables
                                                      105                      90  
     Prepaid expenses and other
                                                      924                     904  
     Inventories
                                                      111                     151  
     Assets held for sale
                                      ------------------  --------------------                      ------------------  --------------------
                                                    2,792                   2,766  
        Total Current Assets
                                            
                                                    1,017                   1,037  
  Property and equipment, net
                                                      183          --  
  Operating lease right-of-use assets
                                                      687                     692  
  Goodwill
                                                      264                     289  
  Other intangible assets, net
                                                       85                     100  
  Other assets
                                                      492                     509  
  Assets held for sale
                                      ------------------  --------------------                      ------------------  --------------------
                                              $     5,520             $     5,393  
        Total Assets
                                      ========= ========= ====================                      ========= ========= ====================
                                            
                                                               
  Liabilities
                                                               
  Current Liabilities:
                                              $       879             $       851  
     Accounts payable
                                                      208                       8  
     Notes payable
                                                      682                     676  
     Accrued liabilities
                                                      140                     149  
     Liabilities held for sale
                                      ------------------  --------------------                      ------------------  --------------------
                                                    1,909                   1,684  
        Total Current Liabilities
                                                               
   
                                                    2,771                   2,971  
  Long-term debt
                                                      684                     561  
  Other liabilities
                                                      133                     108  
  Liabilities held for sale
                                      ------------------  --------------------                      ------------------  --------------------
                                                    5,497                   5,324  
        Total Liabilities
                                                               
   
                                                       23                      69  
  Equity
                                      ------------------  --------------------                      ------------------  --------------------
                                              $     5,520             $     5,393  
        Total Liabilities and Equity
                                      ========= ========= ====================                      ========= ========= ====================
As of September 30,
                                              ------------------------------------------------------------------------------------
                                          2019                                 2018
                                              --------------------------------                        --------------------------------
Other Financial Data                                             
                                                                 
  Working Capital Days
                                                         53                54  
     Receivable days
                                                         71                76  
     Inventory days
                                                         69                75  
     Payable days
                                                   $  1,222          $  1,204  
     Working capital
                                                       16.0 %                               16.2 %
        Working capital as a % of sales (LTM)

Historical information is available on our website.

MASCO CORPORATION
Condensed Consolidated Statements of Cash Flows and Other Financial Data - Unaudited
For the Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                    (dollars in millions)
                                             
                                                                                         Nine Months Ended
                                                                                                              September 30,
                                                               ----------------------------------------------------------------------------------------------------
                                                               2019                                         2018
                                                               ----------------------------------------                        ----------------------------------------
Cash Flows From (For) Operating Activities:                                               
                                                                        $        754              $        729  
   Cash provided by operating activities
                                                                                (149 )                                        (75 )
   Working capital changes
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                                 605                       654  
      Net cash from operating activities
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                       
Cash Flows From (For) Financing Activities:                                               
                                                                      --                      (114 )
   Retirement of notes
                                                                                (440 )                                       (354 )
   Purchase of Company common stock
                                                                                (105 )                                        (98 )
   Cash dividends paid
                                                                                 (42 )                                        (89 )
   Dividends paid to noncontrolling interest
                                                                                  23                         8  
   Proceeds from the exercise of stock options
                                                                                 (21 )                                        (38 )
   Employee withholding taxes paid on stock-based compensation
                                                                                  (3 )                                         (1 )
   Decrease in debt, net
                                                                                  (2 )                             --  
   Credit Agreement and other financing costs
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                                (590 )                                       (686 )
      Net cash for financing activities
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                       
Cash Flows From (For) Investing Activities:                                               
                                                                                (111 )                                       (160 )
   Capital expenditures
                                                                      --                      (549 )
   Acquisition of business, net of cash acquired
                                                                                   2            --  
   Proceeds from disposition of business, net of cash disposed
                                                                                   5                       108  
   Other, net
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                                (104 )                                       (601 )
      Net cash for investing activities
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                       
Effect of exchange rate changes on cash and cash investments                      10                         8  
                                                                       
Cash and Cash Investments:                                                                
                                                                                 (79 )                                       (625 )
   Decrease for the period
                                                                                 559                     1,194  
   At January 1
                                                               --------------------  --------------------                      --------------------  --------------------
                                                                        $        480              $        569  
   At September 30
                                                               ========== ========== ====================                      ========== ========== ====================
As of September 30,
                             ------------------------------------------------------------------------------------
                         2019                                 2018
                             --------------------------------                        --------------------------------
Liquidity                                       
                                  $    475          $    560  
   Cash and cash investments

Historical information is available on our website.

MASCO CORPORATION
Segment Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                              
                                                                                   Three Months Ended                                                                                    Nine Months Ended                                          
                                                                                                         September 30,                                                                                                                                                 September 30,
                                                                ----------------------------------------------------------------------------------------                                                                      ----------------------------------------------------------------------------------------
                                                             2019                                   2018                          Change                          2019                                   2018                          Change
                                                                ----------------------------------                        ----------------------------------                        -------------------                       ----------------------------------                        ----------------------------------                        -------------------
Plumbing Products                                                                                                                                    
                                                                      $   1,006           $     992              1 %                 $   2,958           $   2,995             (1 )%
   Net sales
                                                                ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                     
    
                                                                      $     179           $     177               $     530           $     534      
   Operating profit, as reported
                                                                           17.8 %                                 17.8 %                                     17.9 %                                 17.8 %                       
      Operating margin, as reported
                                                                                                                                  
                                                                              9                   2                      11                   4      
   Rationalization charges
                                                                 --      --          --                   1      
   Accelerated depreciation related to rationalization activity
                                                                --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                            188                 179                     541                 539      
   Operating profit, as adjusted
                                                                           18.7 %                                 18.0 %                                     18.3 %                                 18.0 %                       
      Operating margin, as adjusted
                                                                                                                                                     
    
                                                                             20                  20                      59                  56      
   Depreciation and amortization
                                                                --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                      $     208           $     199               $     600           $     595      
   EBITDA, as adjusted
                                                                ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                  
Decorative Architectural Products                                                                                                                    
                                                                      $     710           $     673              5 %                 $   2,110           $   2,024              4 %
   Net sales
                                                                ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                     
    
                                                                      $     134           $     104               $     380           $     338      
   Operating profit, as reported
                                                                           18.9 %                                 15.5 %                                     18.0 %                                 16.7 %                       
      Operating margin, as reported
                                                                                                                                                     
    
                                                                 --                  15          --                  40      
   Kichler inventory step up adjustment
                                                                 --      --                       9      --      
   Impairment charge for other intangible assets
                                                                --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                            134                 119                     389                 378      
   Operating profit, as adjusted
                                                                           18.9 %                                 17.7 %                                     18.4 %                                 18.7 %                       
      Operating margin, as adjusted
                                                                                                                                                     
    
                                                                             11                  10                      31                  25      
   Depreciation and amortization
                                                                --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                      $     145           $     129               $     420           $     403      
   EBITDA, as adjusted
                                                                ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                  
Cabinetry Products                                                                                                                                   
                                                                      $     231           $     239             (3 )%                $     719           $     724             (1 )%
    Net sales
                                                                ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                     
     
                                                                      $      26           $      23               $      79           $      62      
    Operating profit, as reported
                                                                           11.3 %                                  9.6 %                                     11.0 %                                  8.6 %                       
       Operating margin, as reported
                                                                                                                                                     
     
                                                                              1      --                       4      --      
    Professional fees related to potential divestiture
                                                                --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                             27                  23                      83                  62      
    Operating profit, as adjusted
                                                                           11.7 %                                  9.6 %                                     11.5 %                                  8.6 %                       
       Operating margin, as adjusted
                                                                                                                                                     
     
                                                                              3                   3                      10                  10      
    Depreciation and amortization
                                                                --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                      $      30           $      26               $      93           $      72      
    EBITDA, as adjusted
                                                                ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================

Historical information is available on our website.

MASCO CORPORATION
Segment Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                          Three Months Ended                                                                                                                                                             Nine Months Ended                                                                               
                                                                                                                                                September 30,                                                                                                                                                                                                                          September 30,
                                                                             --------------------------------------------------------------------------------------------------------------------------------------------                                                                                           --------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       2019                                                             2018                                                  Change                                                 2019                                                             2018                                                  Change
                                                                             ------------------------------------------------------------                        ------------------------------------------------------------                        ----------------------------------------                       ------------------------------------------------------------                        ------------------------------------------------------------                        ----------------------------------------
Total                                                                                                                                                                                                                                                                                          
                                                                                                $                1,947                        $                1,904                        2 %                                         $                5,787                        $                5,743                        1 %
   Net sales
                                                                             ==================== ==================== ====================                      ==================== ==================== ====================                                                                                     ==================== ==================== ====================                      ==================== ==================== ====================
                                                                                                                                                                                                                                                                                               
    
                                                                                                $                  339                        $                  304                                                 $                  989                        $                  934      
   Operating profit, as reported - segment
                                                                                                                   (23 )                                                            (18 )                                                                                     (71 )                                                            (64 )                       
      General corporate expense, net
                                                                             ----------------------------------------  --------------------                      ----------------------------------------  --------------------                                                                                     ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                                                                   316                                           286                                                                    918                                           870      
   Operating profit, as reported
                                                                                                                  16.2 %                                                           15.0 %                                                                                    15.9 %                                                           15.1 %                       
         Operating margin, as reported
                                                                                                                                                                                                                                                                                               
    
                                                                                                                     9                                             2                                                                     11                                             4      
      Rationalization charges - segment
                                                                                                        --                                --                                                         --                                             1      
      Accelerated depreciation related to rationalization activity - segment
                                                                                                        --                                            15                                                         --                                            40      
      Kichler inventory step up adjustment
                                                                                                        --                                --                                                                      9                                --      
      Impairment charge for other intangible assets
                                                                                                                     1                                --                                                                      4                                --      
      Professional fees related to potential divestiture
                                                                             ----------------------------------------  --------------------                      ----------------------------------------  --------------------                                                                                     ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                                                                   326                                           303                                                                    942                                           915      
   Operating profit, as adjusted
                                                                                                                  16.7 %                                                           15.9 %                                                                                    16.3 %                                                           15.9 %                       
         Operating margin, as adjusted
                                                                                                                                                                                                                                                                                               
    
                                                                                                                    34                                            33                                                                    100                                            91      
   Depreciation and amortization - segment
                                                                                                                     2                                             2                                                                      7                                             6      
   Depreciation and amortization - non-operating
                                                                             ----------------------------------------  --------------------                      ----------------------------------------  --------------------                                                                                     ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                                                $                  362                        $                  338                                                 $                1,049                        $                1,012      
   EBITDA, as adjusted
                                                                             ==================== ==================== ====================                      ==================== ==================== ====================                                                                                     ==================== ==================== ====================                      ==================== ==================== ====================

Historical information is available on our website.

MASCO CORPORATION
North American and International Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                                 
                                                                                      Three Months Ended                                                                                    Nine Months Ended                                          
                                                                                                            September 30,                                                                                                                                                 September 30,
                                                                   ----------------------------------------------------------------------------------------                                                                      ----------------------------------------------------------------------------------------
                                                                                2019                                   2018          Change                                          2019                                   2018          Change
                                                                   ----------------------------------                        ----------------------------------                        -------------------  -------------------- ----------------------------------                        ----------------------------------                        -------------------
North American                                                                                                                                          
                                                                         $   1,605           $   1,565              3 %                 $   4,752           $   4,653              2 %
   Net sales
                                                                   ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                        
    
                                                                         $     288           $     253               $     838           $     773      
   Operating profit, as reported
                                                                              17.9 %                                 16.2 %                                     17.6 %                                 16.6 %                       
         Operating margin, as reported
                                                                                                                                                        
    
                                                                                 9                   2                      11                   4      
   Rationalization charges
                                                                    --      --          --                   1      
   Accelerated depreciation related to rationalization activity
                                                                    --                  15          --                  40      
   Kichler inventory step up adjustment
                                                                    --      --                       9      --      
   Impairment charge for other intangible assets
                                                                                 1      --                       4      --      
   Professional fees related to potential divestiture
                                                                   --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                               298                 270                     862                 818      
   Operating profit, as adjusted
                                                                              18.6 %                                 17.3 %                                     18.1 %                                 17.6 %                       
         Operating margin, as adjusted
                                                                                                                                                        
    
                                                                                24                  23                      71                  63      
   Depreciation and amortization
                                                                   --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                         $     322           $     293               $     933           $     881      
   EBITDA, as adjusted
                                                                   ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                     
International                                                                                                                                           
                                                                         $     342           $     339              1 %                 $   1,035           $   1,090             (5 )%
   Net sales
                                                                   ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                        
    
                                                                         $      51           $      51               $     151           $     161      
   Operating profit, as reported
                                                                              14.9 %                                 15.0 %                                     14.6 %                                 14.8 %                       
      Operating margin, as reported
                                                                                                                                                        
    
                                                                                10                  10                      29                  28      
   Depreciation and amortization
                                                                   --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                         $      61           $      61               $     180           $     189      
   EBITDA
                                                                   ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
Historical information is available on our website.
 
 
 
MASCO CORPORATION
North American and International Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                                 
                                                                                      Three Months Ended                                                                                    Nine Months Ended                                          
                                                                                                            September 30,                                                                                                                                                 September 30,
                                                                   ----------------------------------------------------------------------------------------                                                                      ----------------------------------------------------------------------------------------
                                                                2019                                   2018                          Change                          2019                                   2018                          Change
                                                                   ----------------------------------                        ----------------------------------                        -------------------  -------------------- ----------------------------------                        ----------------------------------                        -------------------
Total                                                                                                                                                   
                                                                         $   1,947           $   1,904              2 %                 $   5,787           $   5,743              1 %
   Net sales
                                                                   ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                        
    
                                                                         $     339           $     304               $     989           $     934      
   Operating profit, as reported - segment
                                                                               (23 )                                  (18 )                                      (71 )                                  (64 )                       
      General corporate expense, net
                                                                   --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                               316                 286                     918                 870      
   Operating profit, as reported
                                                                              16.2 %                                 15.0 %                                     15.9 %                                 15.1 %                       
         Operating margin, as reported
                                                                                                                                                        
    
                                                                                 9                   2                      11                   4      
      Rationalization charges - segment
                                                                    --      --          --                   1      
      Accelerated depreciation related to rationalization activity
                                                                    --                  15          --                  40      
      Kichler inventory step up adjustment
                                                                    --      --                       9      --      
      Impairment charge for other intangible assets
                                                                                 1      --                       4      --      
      Professional fees related to potential divestiture
                                                                   --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                               326                 303                     942                 915      
   Operating profit, as adjusted
                                                                              16.7 %                                 15.9 %                                     16.3 %                                 15.9 %                       
         Operating margin, as adjusted
                                                                                                                                                        
    
                                                                                34                  33                     100                  91      
   Depreciation and amortization - segment
                                                                                 2                   2                       7                   6      
   Depreciation and amortization - non-operating
                                                                   --------------  --------------------                      --------------  --------------------                                                                --------------  --------------------                      --------------  --------------------
                                                                         $     362           $     338               $   1,049           $   1,012      
   EBITDA, as adjusted
                                                                   ======= ======= ====================                      ======= ======= ====================                                                                ======= ======= ====================                      ======= ======= ====================

Historical information is available on our website.

View source version on businesswire.com: https://www.businesswire.com/news/home/20191030005143/en/

SOURCE: Masco Corporation

David Chaika
Vice President, Treasurer and Investor Relations
313.792.5500
david_chaika@mascohq.com

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