UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 26, 2009
 
Masco Corporation
(Exact name of Registrant as Specified in Charter)
 	 	 	 	 	
Delaware	 	1-5794	 	38-1794485	
 	 	 	 	 	
(State or Other Jurisdiction
of Incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
 	 	 	
21001 Van Born Road, Taylor, Michigan	 	48180	
 	 	 	
(Address of Principal Executive Offices)	 	(Zip Code)	
(313) 274-7400
 
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

   

 
Item 2.02. Results of Operations and Financial Condition.
     Attached and incorporated herein by reference as Exhibit 99 is a copy of a press release dated October 26, 2009 reporting Masco Corporation’s financial results for the third quarter 2009 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2009. On October 27, 2009, Masco Corporation will hold an investor conference call and web cast to discuss financial results for the third quarter 2009.
     This information, including the Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.
Item 9.01. Financial Statements and Exhibits.
     (d) Exhibits.
 	 	 	
99	 	Press Release of Masco Corporation dated October 26, 2009 reporting Masco Corporation’s financial results for the third quarter 2009 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2009.	

 
SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 	 	 	 	 	
 	MASCO CORPORATION
 	 	
 	By:  	/s/ John G. Sznewajs  	 	
 	 	Name:  	John G. Sznewajs 	 	
 	 	Title:  	Vice President, Treasurer and
Chief Financial Officer 	 	
 	
October 26, 2009

 
EXHIBIT INDEX
 	 	 	
99	 	Press Release of Masco Corporation dated October 26, 2009 reporting Masco Corporation’s financial results for the third quarter 2009 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2009.	

FOR IMMEDIATE RELEASE

Investor / Media Contact
Maria Duey
Vice President – Investor Relations
313.792.5500
maria_duey@mascohq.com
MASCO CORPORATION REPORTS THIRD QUARTER RESULTS AND
INCREASES FULL-YEAR GUIDANCE
      Third Quarter 2009

 	•	 	Net sales from continuing operations declined 17 percent to $2.1 billion.	
 		
 	•	 	Income from continuing operations, as reported, was $.14 per common share.	
 		
 	•	 	The Company had $1.2 billion of cash at September 30, 2009.	
 		
 	•	 	The Company has increased its estimate for 2009 full-year income (loss) from continuing operations to approximately $.05 to $(.05) per common share.	
 		
 	•	 	The Company has increased its estimate of 2009 free cash flow (before dividends) to approximately $450 million.	
Taylor, Mich., (October 26, 2009) — Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the quarter ended September 30, 2009 declined 17 percent to $2.1 billion compared with $2.5 billion for the third quarter of 2008. North American sales declined 17 percent and International sales declined 13 percent. In local currencies, International sales declined seven percent compared with the third quarter of 2008.
The third quarter of 2009 results were adversely affected by significantly lower sales volume of new home construction products and services, as well as a decline in consumer spending for home improvement products in both North American and International markets. The negative market conditions were partially offset by increased sales volume of paints and stains, the improved relationship between selling prices and commodity costs and benefits associated with business rationalizations and other cost savings initiatives.
Income from continuing operations was $.14 per common share in the third quarter of 2009 compared to income from continuing operations of $.09 per common share in the third quarter of 2008. The third quarter of 2008 was impacted by an unusually high tax rate; a normalized tax rate of 36 percent would have increased earnings by $.12 per common share.
 1 

 

“Although market conditions remain challenging, we are encouraged by our third quarter operating performance, which exceeded our expectations. Our sales continue to benefit from new product introductions and market share gains. Our gross profit margins were the highest we have achieved in the last seven quarters, as we continue to see the positive impact on our cost structure of the business rationalization initiatives we have implemented and our focus on quality and driving lean principles across the Company. We are proud of the worldwide Masco Team for their outstanding effort and contributions in a difficult operating environment” said Masco’s CEO Tim Wadhams.
The Company continues to focus on the rationalization of its businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the third quarters of 2009 and 2008, the Company incurred costs and charges of $21 million pre-tax ($.04 per common share, after tax) and $15 million pre-tax ($.03 per common share, after tax), respectively, related to these initiatives.
Outlook 2009
Business conditions remain difficult in the Company’s markets. The Company continues to estimate that 2009 housing starts will decline 40 percent to approximately 550,000 units. The Company also anticipates that consumer spending for home improvement products in North American and International markets will continue at reduced levels in the near-term.
While global economic conditions make forecasting future business activity difficult, the Company currently estimates that its 2009 sales will decline approximately 18 to 20 percent compared to 2008. The Company’s previous guidance estimated that its full-year 2009 sales decline would be 18 to 22 percent compared to 2008.
The Company currently estimates that its 2009 full-year income (loss) from continuing operations will approximate $.05 to $(.05) per common share. The full-year guidance includes approximately $92 million pretax ($.17 per common share, after tax) of costs and charges for plans undertaken to further rationalize the Company’s business, but does not include any additional costs and charges that may result from the continued evaluation of the Company’s businesses or any other charges. The Company’s previous guidance was loss from continuing operations in a range of $(.05) to $(.25) per common share for the full-year 2009.
While the Company expects to operate near break-even, the guidance includes an estimate of income tax expense, principally related to income tax liabilities in certain jurisdictions and losses in other jurisdictions that provide no tax benefit. As a result, quarterly and full-year results for 2009 will reflect unusual relationships between income taxes and income (loss) before income taxes. In the third quarter of 2009, the Company reported pre-tax income of $89 million and $26 million of tax expense. A normalized tax rate of 36 percent would have reduced third quarter 2009 earnings by $.02 per common share.
The Company estimates that 2009 free cash flow (cash from operations, after capital expenditures and before dividends) will be relatively strong and approximate $450 million. This compares with the Company’s previous guidance of free cash flow of approximately $360 million.
 2 

 

Although the Company is confident that the long-term fundamentals for the new home construction and home improvement markets are positive, the Company expects that market conditions will be challenging over the near-term, as global economies recover. The Company believes that its strong financial position (including cash of $1.2 billion at September 30, 2009, its ability to generate positive cash flow during 2009 and unused bank lines) together with its current strategy of re-aligning its cost structure, investing in leadership brands, driving innovation and re-engineering its supply chains, will allow it to drive long-term growth and create value for our shareholders.
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of home improvement and building products, as well as a leading provider of services that include the installation of insulation and other building products.
The 2009 third quarter results and supplemental material, including a presentation in PDF format, will be distributed after the market closes on October 26, 2009 and will be available on the Company’s Web site at www.masco.com .
A conference call regarding items contained in this release is scheduled for Tuesday, October 27, 2009 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 (913) 312-0407 (confirmation #5313403). The conference call will be webcast simultaneously on the Company’s Web site at www.masco.com and supplemental material, including the financial data referred to on the call and a reconciliation of non-GAAP information provided on the call, will also be available on the Web site. A replay of the call will be available on Masco’s Web site or by phone by dialing (719) 457-0820 (replay access code #5313403) approximately two hours after the end of the call and will continue through November 3, 2009.
Masco Corporation’s press releases and other information are available through the Company’s toll free number, 1-888-MAS-NEWS, or under the Investor Relations section of Masco’s Web site at www.masco.com .
# # #
Statements contained herein, or otherwise made available, that reflect the Company’s views about its future performance may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These views involve risks and uncertainties that are difficult to predict and the Company’s results may differ materially from the results discussed in such forward-looking statements. For further information, refer to our most recent Annual Report on Form 10-K (particularly the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections) and to any subsequent Quarterly Reports on Form 10-Q, all of which are on file with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Certain of the financial and statistical data made available are non-GAAP financial measures as defined by the SEC’s Regulation G. The Company believes that such non-GAAP performance measures and ratios used in managing the business may provide users with meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company’s filings with the SEC and is available on Masco’s Web site.
 3 

 
MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
For the Three Months and Nine Months Ended September 30, 2009 and 2008
(In Millions, Except Per Common Share Data)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
Net sales	 	$	2,094	 	 	$	2,511	 	 	$	5,923	 	 	$	7,560	 	
Cost of sales	 	 	1,524	 	 	 	1,863	 	 	 	4,392	 	 	 	5,592	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	570	 	 	 	648	 	 	 	1,531	 	 	 	1,968	 	
Selling, general and administrative expenses	 	 	432	 	 	 	454	 	 	 	1,272	 	 	 	1,398	 	
Charge for defined-benefit plan curtailment	 	 	—	 	 	 	—	 	 	 	8	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit	 	 	138	 	 	 	194	 	 	 	251	 	 	 	570	 	
Other income (expense), net	 	 	(49	)	 	 	(56	)	 	 	(157	)	 	 	(196	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes	 	 	89	 	 	 	138	 	 	 	94	 	 	 	374	 	
Income taxes	 	 	26	 	 	 	92	 	 	 	35	 	 	 	207	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	 	63	 	 	 	46	 	 	 	59	 	 	 	167	 	
(Loss) from discontinued operations, net	 	 	(23	)	 	 	(2	)	 	 	(30	)	 	 	(15	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	40	 	 	 	44	 	 	 	29	 	 	 	152	 	
Less: Net income attributable to non-controlling interest	 	 	12	 	 	 	11	 	 	 	27	 	 	 	35	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Masco Corporation	 	$	28	 	 	$	33	 	 	$	2	 	 	$	117	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings per common share attributable to Masco Corporation (diluted):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	$	0.14	 	 	$	0.09	 	 	$	0.09	 	 	$	0.36	 	
(Loss) from discontinued operations, net	 	 	(0.06	)	 	 	(0.01	)	 	 	(0.08	)	 	 	(0.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Masco Corporation	 	$	0.08	 	 	$	0.09	 	 	$	0.00	 	 	$	0.31	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	 	 	351	 	 	 	352	 	 	 	351	 	 	 	354	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts attributable to Masco Corporation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	$	51	 	 	$	35	 	 	$	32	 	 	$	132	 	
(Loss) from discontinued operations, net	 	 	(23	)	 	 	(2	)	 	 	(30	)	 	 	(15	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Masco Corporation	 	$	28	 	 	$	33	 	 	$	2	 	 	$	117	 	

 
Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)
 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales & Earnings	 	9/30/2009	 	9/30/2008	 	Change	
 	
Net Sales	 	$	2,094	 	 	$	2,511	 	 	 	-17	%	
Operating Profit	 	$	138	 	 	$	194	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	6.6	%	 	 	7.7	%	 	 	(110)	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Income (Expense), Net	 	$	(49	)	 	$	(56	)	 	 	-13	%	
Income Tax	 	$	26	 	 	$	92	 	 	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income From Continuing Operations Attributable to Masco Corporation	 	$	51	 	 	$	35	 	 	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted EPS from Continuing Operations	 	$	0.14	 	 	$	0.09	 	 	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses	 	9/30/2009	 	9/30/2008	 	Change	
 	
Cost of Sales	 	$	1,524	 	 	$	1,863	 	 	 	-18	%	
Gross Margin	 	 	27.2	%	 	 	25.8	%	 	 	140	bps	
SG&A Expenses (Including GCE)	 	$	432	 	 	$	454	 	 	 	-5	%	
SG&A as a % of net sales	 	 	20.6	%	 	 	18.1	%	 	 	(250)	bps	
General Corporate Expense (GCE)	 	$	36	 	 	$	32	 	 	 	13	%	
General Corp Expense as a % of net sales	 	 	1.7	%	 	 	1.3	%	 	 	40	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Segments	 	9/30/2009	 	9/30/2008	 	Change	
 	
Cabinets and Related Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	434	 	 	$	584	 	 	 	-26	%	
Operating (Loss) Profit	 	$	(16	)	 	$	23	 	 	 	N/A	 	
Operating (Loss) Profit % to Net Sales	 	 	-3.7	%	 	 	3.9	%	 	 	(760)	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Plumbing Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	688	 	 	$	788	 	 	 	-13	%	
Operating Profit	 	$	93	 	 	$	92	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	13.5	%	 	 	11.7	%	 	 	180	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Installation and Other Services:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	332	 	 	$	492	 	 	 	-33	%	
Operating (Loss) Profit	 	$	(34	)	 	$	10	 	 	 	N/A	 	
Operating (Loss) Profit % to Net Sales	 	 	-10.2	%	 	 	2.0	%	 	 	(1,220)	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Decorative Architectural Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	474	 	 	$	446	 	 	 	6	%	
Operating Profit	 	$	122	 	 	$	94	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	25.7	%	 	 	21.1	%	 	 	460	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Specialty Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	166	 	 	$	201	 	 	 	-17	%	
Operating Profit	 	$	16	 	 	$	16	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	9.6	%	 	 	8.0	%	 	 	160	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Segment Reported:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	2,094	 	 	$	2,511	 	 	 	-17	%	
Operating Profit	 	$	181	 	 	$	235	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	8.6	%	 	 	9.4	%	 	 	(80)	bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in Key Retailer Sales	 	 	-4	%	 	 	-11	%	 	 	 	 	

 
Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)
 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Regions	 	9/30/2009	 	9/30/2008	 	Change	
 	
North America	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	1,630	 	 	$	1,975	 	 	 	-17	%	
Operating Profit	 	$	123	 	 	$	193	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	7.5	%	 	 	9.8	%	 	(230	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
International, principally Europe	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	464	 	 	$	536	 	 	 	-13	%	
Operating Profit	 	$	58	 	 	$	42	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	12.5	%	 	 	7.8	%	 	470	bps	
 	 	 	 	 	 	 	 	 	
Other	 	9/30/2009	 	9/30/2008	
 	
Dividend Payments	 	$	27	 	 	$	83	 	
Cash Paid for Share Repurchases	 	$	—	 	 	$	13	 	
Common Shares Repurchased	 	 	—	 	 	 	1	 	
 		
CAPEX	 	$	20	 	 	$	50	 	
 		
Depreciation and Amortization	 	$	62	 	 	$	60	 	
 		
Average diluted common shares outstanding	 	 	351	 	 	 	352	 	

 
Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 YTD — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)
 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales & Earnings	 	9/30/2009	 	9/30/2008	 	Change	
Net Sales	 	$	5,923	 	 	$	7,560	 	 	 	-22	%	
Operating Profit	 	$	251	 	 	$	570	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	4.2	%	 	 	7.5	%	 	 	(330	)bps	
Other Income (Expense), Net	 	$	(157	)	 	$	(196	)	 	 	-20	%	
Income Tax	 	$	35	 	 	$	207	 	 	 	N/A	 	
Income From Continuing Operations Attributable to Masco Corporation	 	$	32	 	 	$	132	 	 	 	N/A	 	
Diluted EPS from Continuing Operations	 	$	0.09	 	 	$	0.36	 	 	 	N/A	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses	 	9/30/2009	 	9/30/2008	 	Change	
Cost of Sales	 	$	4,392	 	 	$	5,592	 	 	 	-21	%	
Gross Margin	 	 	25.8	%	 	 	26.0	%	 	 	(20	)bps	
SG&A Expenses (Including GCE)	 	$	1,272	 	 	$	1,398	 	 	 	-9	%	
SG&A as a % of net sales	 	 	21.5	%	 	 	18.5	%	 	 	(300	)bps	
General Corporate Expense (GCE)	 	$	96	 	 	$	110	 	 	 	-13	%	
General Corp Expense as a % of net sales	 	 	1.6	%	 	 	1.5	%	 	 	(10	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Segments	 	9/30/2009	 	9/30/2008	 	Change	
Cabinets and Related Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	1,248	 	 	$	1,788	 	 	 	-30	%	
Operating (Loss) Profit	 	$	(56	)	 	$	88	 	 	 	N/A	 	
Operating (Loss) Profit % to Net Sales	 	 	-4.5	%	 	 	4.9	%	 	 	(940	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Plumbing Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	1,922	 	 	$	2,422	 	 	 	-21	%	
Operating Profit	 	$	201	 	 	$	299	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	10.5	%	 	 	12.3	%	 	 	(180	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Installation and Other Services:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	961	 	 	$	1,486	 	 	 	-35	%	
Operating (Loss) Profit	 	$	(104	)	 	$	8	 	 	 	N/A	 	
Operating (Loss) Profit % to Net Sales	 	 	-10.8	%	 	 	0.5	%	 	 	(1,130	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Decorative Architectural Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	1,365	 	 	$	1,301	 	 	 	5	%	
Operating Profit	 	$	313	 	 	$	257	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	22.9	%	 	 	19.8	%	 	 	310	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Specialty Products:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	427	 	 	$	563	 	 	 	-24	%	
Operating Profit	 	$	16	 	 	$	37	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	3.7	%	 	 	6.6	%	 	 	(290	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Segment Reported:	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	5,923	 	 	$	7,560	 	 	 	-22	%	
Operating Profit	 	$	370	 	 	$	689	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	6.2	%	 	 	9.1	%	 	 	(290	)bps	
Change in Key Retailer Sales	 	 	-7	%	 	 	-11	%	 	 	 	 	

 

Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 YTD — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)
 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Regions	 	9/30/2009	 	9/30/2008	 	Change	
North America	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	4,694	 	 	$	5,935	 	 	 	-21	%	
Operating Profit	 	$	261	 	 	$	542	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	5.6	%	 	 	9.1	%	 	 	(350	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
International, principally Europe	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	$	1,229	 	 	$	1,625	 	 	 	-24	%	
Operating Profit	 	$	109	 	 	$	147	 	 	 	N/A	 	
Operating Profit % to Net Sales	 	 	8.9	%	 	 	9.0	%	 	 	(10	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Working Capital	 	9/30/2009	 	9/30/2008	 	Change	
Receivable Days	 	 	50	 	 	 	50	 	 	 	—	 	
Inventory Days	 	 	50	 	 	 	52	 	 	 	(2	)	
Payable Days	 	 	49	 	 	 	41	 	 	 	8	 	
Working Capital (Receivables+Inventory-Payables)	 	$	1,368	 	 	$	1,805	 	 	 	-24	%	
Working Capital as a % of Sales (As Reported TTM 1 )	 	 	17.3	%	 	 	17.6	%	 	 	30	)bps	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other	 	9/30/2009	 	9/30/2008	 	 	
Dividend Payments	 	$	139	 	 	$	251	 		
Cash Paid for Share Repurchases 2	 	$	11	 	 	$	160	 		
Common Shares Repurchased 2	 	 	2	 	 	 	9	 		
CAPEX	 	$	70	 	 	$	142	 		
Depreciation and Amortization	 	$	190	 	 	$	179	 		
Return on Invested Capital (As Reported TTM)	 	 	-2.5	%	 	 	5.8	%		
Return on Invested Capital (As Reconciled TTM)	 	 	2.4	%	 	 	6.7	%		
Average diluted common shares outstanding	 	 	351	 	 	 	354	 		
Average diluted common shares outstanding (October 1)	 	 	351	 	 	 	351	 		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Debt Ratio	 	9/30/2009	 	9/30/2008	 		
Long-Term Debt	 	$	3,606	 	 	$	3,915	 		
Notes Payable	 	$	369	 	 	$	71	 		
Total Debt	 	$	3,975	 	 	$	3,986	 		
 	 	 	 	 	 	 	 	 		
Shareholders’ Equity 3	 	$	3,069	 	 	$	2,981	 		
 	 	 	 	 	 	 	 	 		
Debt to Capital	 	 	56	%	 	 	57	%		

1 -	 	Trailing Twelve Months.	
 		
2 -	 	Common shares were repurchased to offset the effect of stock award grants in the first quarter of 2009.	
 		
3 -	 	Shareholders’ Equity at 12/31/08 includes $135 million related to the noncontrolling interest reclassification.	

 

Masco Corporation — 3rd Quarter 2009
 	 	 	
Page		
 	 	 	
1	 	Condensed Consolidated Statements of Operations - 2009 & 2008 by Quarter — Unaudited	
 	 	 	
2	 	Notes to Condensed Consolidated Statements of Operations - 2009 & 2008 by Quarter — Unaudited	
 	 	 	
3	 	2009 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited	
 	 	 	
4	 	2009 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited	
 	 	 	
5	 	2009 Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited	
 	 	 	
6	 	2008 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited	
 	 	 	
7	 	2008 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited	
 	 	 	
8	 	2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited	
 	 	 	
9	 	Other Income (Expense), Net - 2009 & 2008 by Quarter — Unaudited	
 	 	 	
10	 	Condensed Consolidated Balance Sheets — Unaudited	
 	 	 	
 	 	GAAP Reconciliations:	
 	 	 	
11	 	Sales Growth Excluding the Effect of Acquisitions and Currency Translation — Unaudited	
 	 	 	
12	 	Operating Profit and Margins — Unaudited	
 	 	 	
13	 	Operating (Loss) Profit and Shareholders’ Equity — Unaudited	
 	 	 	
14	 	Restatement for Discontinued Operations — Unaudited	

 

MASCO CORPORATION
Condensed Consolidated Statements of Operations
2009 & 2008 — by Quarter — Unaudited
(dollars in millions, except per share data)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2009	 	 	2008	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales	 	 	 	 	 	 	 	 	 	$	2,094	 	 	$	2,023	 	 	$	1,806	 	 	$	9,524	 	 	$	1,964	 	 	$	2,511	 	 	$	2,622	 	 	$	2,427	 	
Cost of Sales	 	 	 	 	 	 	 	 	 	 	1,524	 	 	 	1,477	 	 	 	1,391	 	 	 	7,159	 	 	 	1,567	 	 	 	1,863	 	 	 	1,926	 	 	 	1,803	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	 	 	 	 	 	 	 	 	570	 	 	 	546	 	 	 	415	 	 	 	2,365	 	 	 	397	 	 	 	648	 	 	 	696	 	 	 	624	 	
(Gross Margin as a % of Sales)	 	 	 	 	 	 	 	 	 	 	27.2	%	 	 	27.0	%	 	 	23.0	%	 	 	24.8	%	 	 	20.2	%	 	 	25.8	%	 	 	26.5	%	 	 	25.7	%	
SG&A Expense (before lines 1, 2, 3, 4)	 	 	 	 	 	 	 	 	 	 	389	 	 	 	403	 	 	 	377	 	 	 	1,661	 	 	 	382	 	 	 	413	 	 	 	445	 	 	 	421	 	
(S,G&A Expense as a % of Sales)	 	 	 	 	 	 	 	 	 	 	18.6	%	 	 	19.9	%	 	 	20.9	%	 	 	17.4	%	 	 	19.5	%	 	 	16.4	%	 	 	17.0	%	 	 	17.3	%	
Operating Profit (before lines 1, 2, 3, 4)	 	 	 	 	 	 	 	 	 	 	181	 	 	 	143	 	 	 	38	 	 	 	704	 	 	 	15	 	 	 	235	 	 	 	251	 	 	 	203	 	
(Operating Margin as a % of Sales)	 	 	 	 	 	 	 	 	 	 	8.6	%	 	 	7.1	%	 	 	2.1	%	 	 	7.4	%	 	 	0.8	%	 	 	9.4	%	 	 	9.6	%	 	 	8.4	%	
1 General Corporate Expense (GCE), Net	 	 	 	 	 	 	 	 	 	 	36	 	 	 	27	 	 	 	33	 	 	 	144	 	 	 	34	 	 	 	32	 	 	 	35	 	 	 	43	 	
S,G&A Expense as a % of Sales (including lines 1,2,3,4)	 	 	 	 	 	 	 	 	 	 	20.6	%	 	 	21.3	%	 	 	23.1	%	 	 	19.0	%	 	 	21.2	%	 	 	17.7	%	 	 	18.3	%	 	 	19.1	%	
2 Charge for Defined-Benefit Plan Curtailment	 	 	 	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	8	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
3 Charge for Litigation Settlement	 	 	 	 	 	 	 	 	 	 	7	 	 	 	—	 	 	 	—	 	 	 	9	 	 	 	—	 	 	 	9	 	 	 	—	 	 	 	—	 	
4 Impairment Charges for Goodwill and Other Intangible Assets	 	 	 	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	467	 	 	 	467	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Profit (Loss) per F/S	 	 	 	 	 	 	 	 	 	$	138	 	 	$	116	 	 	$	(3	)	 	$	84	 	 	$	(486	)	 	$	194	 	 	$	216	 	 	$	160	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) Per Common Share Attributable to Masco Corporation (Diluted):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) from Continuing Operations	 	 	 	 	 	 	 	 	 	$	0.14	 	 	$	0.19	 	 	$	(0.25	)	 	$	(1.07	)	 	$	(1.44	)	 	$	0.09	 	 	$	0.20	 	 	$	0.06	 	
(Loss) Income from Discontinued Operations, Net	 	 	 	 	 	 	 	 	 	 	(0.06	)	 	 	(0.03	)	 	 	0.01	 	 	 	(0.05	)	 	 	(0.01	)	 	 	(0.01	)	 	 	0.02	 	 	 	(0.06	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income (Loss)	 	 	 	 	 	 	 	 	 	$	0.08	 	 	$	0.15	 	 	$	(0.23	)	 	$	(1.13	)	 	$	(1.45	)	 	$	0.09	 	 	$	0.23	 	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Please see page 2 for Notes.
 Page 1 

 

MASCO CORPORATION
Notes To Condensed Consolidated Statements of Operations
2009 & 2008 — by Quarter — Unaudited
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	Operating results for the first, second, and third quarters of 2009 include costs and charges related to business rationalizations and other initiatives of $24 million pre-tax ($.04 per common share, after tax), $22 million pre-tax ($.04 per common share, after tax), and $21 million pre-tax ($.04 per common share, after tax), respectively.	
 		
•	 	Operating results for the third quarter of 2009 include litigation settlement expense of $7 million pre-tax ($.01 per common share, after tax).	
 		
•	 	Operating results for the second quarter of 2009 include accelerated stock compensation expense of $6 million pre-tax ($.01 per common share, after tax).	
 		
•	 	Operating results for the first quarter of 2009 include a non-cash charge of $8 million pre-tax ($.01 per common share, after tax) related to the curtailment and remeasurement of certain of the Company’s defined-benefit pension plans.	
 		
•	 	Income from continuing operations for the first and second quarters of 2009 includes non-cash impairment charges for financial investments of $3 million pre-tax ($.01 per common share, after tax) and $7 million pre-tax ($.01 per common share, after tax), respectively.	
 		
•	 	(Loss) income from discontinued operations for the third quarter of 2009 include loss of $22 million pre-tax ($.06 per common share, after tax) on the disposition of a European business unit in the Plumbing Products segment.	
 		
•	 	Operating results for the fourth quarter of 2008 include non-cash impairment charges for goodwill and other intangible assets of $467 million pre-tax ($1.27 per common share, after tax).	
 		
•	 	Operating results for the first, second, third and fourth quarters of 2008 include costs and charges related to business rationalizations and other initiatives of $9 million pre-tax ($.02 per common share, after tax), $15 million pre-tax ($.03 per common share, after tax), $15 million per common share pre-tax ($.03 per common share, after tax) and $40 million pre-tax ($.08 per common share, after tax), respectively.	
 		
•	 	Income from continuing operations for the first, second, third and fourth quarters of 2008 includes non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax), $3 million pre-tax, $1 million pre-tax and $28 million pre-tax ($.05 per common share, after tax), respectively.	
 		
•	 	(Loss) income from discontinued operations for the first and second quarters of 2008 includes non-cash charges for those business units that were expected to be divested at a loss of $43 million pre-tax ($.06 per common share, after tax) and $2 million pre-tax, respectively.	
 		
•	 	Per common share amounts for the four quarters of 2008 do not total to the per common share amounts for the year, primarily due to the timing of common stock transactions.	
 		
•	 	Income per common share amounts reflect the adoption of new Financial Accounting Standards Board (“FASB”) guidance regarding whether instruments granted in share-based transactions are participating securities which was effective January 1, 2009 and required retrospective application.	
 Page 2 

 

MASCO CORPORATION
Quarterly Segment Data — 2009
Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Net Sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	 	 	 	 	 	 	 	 	$	434	 	 	$	419	 	 	$	395	 	
- Plumbing Products	 	 	 	 	 	 	 	 	 	 	688	 	 	 	641	 	 	 	593	 	
- Installation and Other Services	 	 	 	 	 	 	 	 	 	 	332	 	 	 	312	 	 	 	317	 	
- Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	474	 	 	 	505	 	 	 	386	 	
- Other Specialty Products	 	 	 	 	 	 	 	 	 	 	166	 	 	 	146	 	 	 	115	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	 	 	 	 	 	 	 	 	$	2,094	 	 	$	2,023	 	 	$	1,806	 	

- North America	 	 	 	 	 	 	 	 	 	$	1,630	 	 	$	1,630	 	 	$	1,434	 	
- International, principally Europe	 	 	 	 	 	 	 	 	 	 	464	 	 	 	393	 	 	 	372	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	 	 	 	 	 	 	 	 	$	2,094	 	 	$	2,023	 	 	$	1,806	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (Loss) Profit:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	 	 	 	 	 	 	 	 	$	(9	)	 	$	(2	)	 	$	(19	)	
- Plumbing Products	 	 	 	 	 	 	 	 	 	 	99	 	 	 	78	 	 	 	37	 	
- Installation and Other Services	 	 	 	 	 	 	 	 	 	 	(27	)	 	 	(27	)	 	 	(28	)	
- Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	123	 	 	 	116	 	 	 	75	 	
- Other Specialty Products	 	 	 	 	 	 	 	 	 	 	16	 	 	 	8	 	 	 	(5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	 	 	 	 	 	 	 	 	$	202	 	 	$	173	 	 	$	60	 	

- North America	 	 	 	 	 	 	 	 	 	$	139	 	 	$	141	 	 	$	39	 	
- International, principally Europe	 	 	 	 	 	 	 	 	 	 	63	 	 	 	32	 	 	 	21	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	 	 	 	 	 	 	 	 	$	202	 	 	$	173	 	 	$	60	 	

General Corporate Expense (GCE), Net	 	 	 	 	 	 	 	 	 	 	36	 	 	 	27	 	 	 	31	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accelerated Stock Compensation Expense	 	 	 	 	 	 	 	 	 	 	—	 	 	 	6	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss on Corporate Fixed Assets, Net	 	 	 	 	 	 	 	 	 	 	—	 	 	 	2	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charge for Litigation Settlement	 	 	 	 	 	 	 	 	 	 	7	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charge for Defined-Benefit Plan Curtailment	 	 	 	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	8	 	

Operating Profit (after GCE and Adjustments)	 	 	 	 	 	 	 	 	 	 	159	 	 	 	138	 	 	 	21	 	
Other Income (Expense), Net	 	 	 	 	 	 	 	 	 	 	(49	)	 	 	(49	)	 	 	(59	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) from Continuing Operations before Income Taxes	 	 	 	 	 	 	 	 	 	$	110	 	 	$	89	 	 	$	(38	)	

Margins:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	 	 	 	 	 	 	 	 	 	-2.1	%	 	 	-0.5	%	 	 	-4.8	%	
- Plumbing Products	 	 	 	 	 	 	 	 	 	 	14.4	%	 	 	12.2	%	 	 	6.2	%	
- Installation and Other Services	 	 	 	 	 	 	 	 	 	 	-8.1	%	 	 	-8.7	%	 	 	-8.8	%	
- Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	25.9	%	 	 	23.0	%	 	 	19.4	%	
- Other Specialty Products	 	 	 	 	 	 	 	 	 	 	9.6	%	 	 	5.5	%	 	 	-4.3	%	
- Total	 	 	 	 	 	 	 	 	 	 	9.6	%	 	 	8.6	%	 	 	3.3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- North America	 	 	 	 	 	 	 	 	 	 	8.5	%	 	 	8.7	%	 	 	2.7	%	
- International, principally Europe	 	 	 	 	 	 	 	 	 	 	13.6	%	 	 	8.1	%	 	 	5.6	%	
- Total, as above	 	 	 	 	 	 	 	 	 	 	9.6	%	 	 	8.6	%	 	 	3.3	%	
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	Operating (loss) profit and margins by segment and geographic area are before general corporate expense, charge for defined benefit plan curtailment, accelerated stock compensation expense, loss on corporate fixed assets, net and charge for litigation settlement.	
 		
•	 	See 2009 Costs and Charges for Business Rationalizations and Other Initiatives — page 5.	
 Page 3 

 

MASCO CORPORATION
Quarterly Segment Data — 2009
Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Net Sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	 	 	 	 	 	 	 	 	$	434	 	 	$	419	 	 	$	395	 	
- Plumbing Products	 	 	 	 	 	 	 	 	 	 	688	 	 	 	641	 	 	 	593	 	
- Installation and Other Services	 	 	 	 	 	 	 	 	 	 	332	 	 	 	312	 	 	 	317	 	
- Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	474	 	 	 	505	 	 	 	386	 	
- Other Specialty Products	 	 	 	 	 	 	 	 	 	 	166	 	 	 	146	 	 	 	115	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	 	 	 	 	 	 	 	 	$	2,094	 	 	$	2,023	 	 	$	1,806	 	

- North America	 	 	 	 	 	 	 	 	 	$	1,630	 	 	$	1,630	 	 	$	1,434	 	
- International, principally Europe	 	 	 	 	 	 	 	 	 	 	464	 	 	 	393	 	 	 	372	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	 	 	 	 	 	 	 	 	$	2,094	 	 	$	2,023	 	 	$	1,806	 	

Operating (Loss) Profit:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Products	 	 	 	 	 	 	 	 	 	$	(16	)	 	$	(12	)	 	$	(28	)	
- Plumbing Products	 	 	 	 	 	 	 	 	 	 	93	 	 	 	74	 	 	 	34	 	
- Installation and Other Services	 	 	 	 	 	 	 	 	 	 	(34	)	 	 	(34	)	 	 	(36	)	
- Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	122	 	 	 	116	 	 	 	75	 	
- Other Specialty Products	 	 	 	 	 	 	 	 	 	 	16	 	 	 	7	 	 	 	(7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	 	 	 	 	 	 	 	 	$	181	 	 	$	151	 	 	$	38	 	

- North America	 	 	 	 	 	 	 	 	 	$	123	 	 	$	119	 	 	$	19	 	
- International, principally Europe	 	 	 	 	 	 	 	 	 	 	58	 	 	 	32	 	 	 	19	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	 	 	 	 	 	 	 	 	$	181	 	 	$	151	 	 	$	38	 	

General Corporate Expense (GCE), Net	 	 	 	 	 	 	 	 	 	 	36	 	 	 	27	 	 	 	33	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accelerated Stock Compensation Expense	 	 	 	 	 	 	 	 	 	 	—	 	 	 	6	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss on Corporate Fixed Assets, Net	 	 	 	 	 	 	 	 	 	 	—	 	 	 	2	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charge for Litigation Settlement	 	 	 	 	 	 	 	 	 	 	7	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charge for Defined-Benefit Plan Curtailment	 	 	 	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	8	 	

Operating (Loss) Profit (after GCE and Adjustments)	 	 	 	 	 	 	 	 	 	 	138	 	 	 	116	 	 	 	(3	)	
Other Income (Expense), Net	 	 	 	 	 	 	 	 	 	 	(49	)	 	 	(49	)	 	 	(59	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) from Continuing Operations before Income Taxes	 	 	 	 	 	 	 	 	 	$	89	 	 	$	67	 	 	$	(62	)	

Margins:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Products	 	 	 	 	 	 	 	 	 	 	-3.7	%	 	 	-2.9	%	 	 	-7.1	%	
- Plumbing Products	 	 	 	 	 	 	 	 	 	 	13.5	%	 	 	11.5	%	 	 	5.7	%	
- Installation and Other Services	 	 	 	 	 	 	 	 	 	 	-10.2	%	 	 	-10.9	%	 	 	-11.4	%	
- Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	25.7	%	 	 	23.0	%	 	 	19.4	%	
- Other Specialty Products	 	 	 	 	 	 	 	 	 	 	9.6	%	 	 	4.8	%	 	 	-6.1	%	
- Total	 	 	 	 	 	 	 	 	 	 	8.6	%	 	 	7.5	%	 	 	2.1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- North America	 	 	 	 	 	 	 	 	 	 	7.5	%	 	 	7.3	%	 	 	1.3	%	
- International, principally Europe	 	 	 	 	 	 	 	 	 	 	12.5	%	 	 	8.1	%	 	 	5.1	%	
- Total, as above	 	 	 	 	 	 	 	 	 	 	8.6	%	 	 	7.5	%	 	 	2.1	%	
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	Operating (loss) profit and margins by segment and geographic area are before general corporate expense, charge for defined benefit plan curtailment, accelerated stock compensation expense, loss on corporate fixed assets, net and charge for litigation settlement.	
 		
•	 	See 2009 Costs and Charges for Business Rationalizations and Other Initiatives — page 5.	
 Page 4 

 

MASCO CORPORATION
Quarterly Segment Data — 2009
Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
(in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Business Rationalizations & Other Initiatives	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	$	26	 	 	 	 	 	 	$	7	 	 	$	10	 	 	$	9	 	
- Plumbing Products	 	 	13	 	 	 	 	 	 	 	6	 	 	 	4	 	 	 	3	 	
- Installation and Other Services	 	 	22	 	 	 	 	 	 	 	7	 	 	 	7	 	 	 	8	 	
- Decorative Architectural Products	 	 	1	 	 	 	 	 	 	 	1	 	 	 	—	 	 	 	—	 	
- Other Specialty Products	 	 	3	 	 	 	 	 	 	 	—	 	 	 	1	 	 	 	2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	65	 	 	 	 	 	 	$	21	 	 	$	22	 	 	$	22	 	

- North America	 	$	58	 	 	 	 	 	 	$	16	 	 	$	22	 	 	$	20	 	
- International, principally Europe	 	 	7	 	 	 	 	 	 	 	5	 	 	 	—	 	 	 	2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	65	 	 	 	 	 	 	$	21	 	 	$	22	 	 	$	22	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
General Corporate Expense (GCE), Net	 	 	2	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	67	 	 	 	 	 	 	$	21	 	 	$	22	 	 	$	24	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notes:

-	 	Business rationalizations and other initiatives include costs and charges for business consolidations, plant closures, headcount reductions, system implementations and other initiatives.	
 Page 5 

 

MASCO CORPORATION
Quarterly Segment Data — 2008
Excluding Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Net Sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	$	2,276	 	 	$	488	 	 	$	584	 	 	$	608	 	 	$	596	 	
- Plumbing Products	 	 	3,042	 	 	 	620	 	 	 	788	 	 	 	836	 	 	 	798	 	
- Installation and Other Services	 	 	1,861	 	 	 	375	 	 	 	492	 	 	 	508	 	 	 	486	 	
- Decorative Architectural Products	 	 	1,629	 	 	 	328	 	 	 	446	 	 	 	476	 	 	 	379	 	
- Other Specialty Products	 	 	716	 	 	 	153	 	 	 	201	 	 	 	194	 	 	 	168	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	9,524	 	 	$	1,964	 	 	$	2,511	 	 	$	2,622	 	 	$	2,427	 	

- North America	 	$	7,482	 	 	$	1,547	 	 	$	1,975	 	 	$	2,067	 	 	$	1,893	 	
- International, principally Europe	 	 	2,042	 	 	 	417	 	 	 	536	 	 	 	555	 	 	 	534	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	9,524	 	 	$	1,964	 	 	$	2,511	 	 	$	2,622	 	 	$	2,427	 	

Operating Profit (Loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	$	86	 	 	$	(12	)	 	$	29	 	 	$	40	 	 	$	29	 	
- Plumbing Products	 	 	331	 	 	 	21	 	 	 	98	 	 	 	110	 	 	 	102	 	
- Installation and Other Services	 	 	21	 	 	 	3	 	 	 	11	 	 	 	8	 	 	 	(1	)	
- Decorative Architectural Products	 	 	301	 	 	 	42	 	 	 	95	 	 	 	90	 	 	 	74	 	
- Other Specialty Products	 	 	37	 	 	 	(1	)	 	 	17	 	 	 	13	 	 	 	8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	776	 	 	$	53	 	 	$	250	 	 	$	261	 	 	$	212	 	

- North America	 	$	602	 	 	$	38	 	 	$	200	 	 	$	207	 	 	$	157	 	
- International, principally Europe	 	 	174	 	 	 	15	 	 	 	50	 	 	 	54	 	 	 	55	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	776	 	 	$	53	 	 	$	250	 	 	$	261	 	 	$	212	 	

General Corporate Expense (GCE), Net	 	 	137	 	 	 	32	 	 	 	32	 	 	 	30	 	 	 	43	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Gain) on Sales of Corporate Fixed Assets, Net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charge for Litigation Settlement	 	 	9	 	 	 	—	 	 	 	9	 	 	 	—	 	 	 	—	 	

Operating Profit (after GCE and Adjustments)	 	 	630	 	 	 	21	 	 	 	209	 	 	 	231	 	 	 	169	 	

Other Income (Expense), Net	 	 	(283	)	 	 	(87	)	 	 	(56	)	 	 	(56	)	 	 	(84	)	

Income (Loss) from Continuing Operations before Income Taxes and Minority Interest	 	$	347	 	 	$	(66	)	 	$	153	 	 	$	175	 	 	$	85	 	

Margins:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	 	3.8	%	 	 	-2.5	%	 	 	5.0	%	 	 	6.6	%	 	 	4.9	%	
- Plumbing Products	 	 	10.9	%	 	 	3.4	%	 	 	12.4	%	 	 	13.2	%	 	 	12.8	%	
- Installation and Other Services	 	 	1.1	%	 	 	0.8	%	 	 	2.2	%	 	 	1.6	%	 	 	-0.2	%	
- Decorative Architectural Products	 	 	18.5	%	 	 	12.8	%	 	 	21.3	%	 	 	18.9	%	 	 	19.5	%	
- Other Specialty Products	 	 	5.2	%	 	 	-0.7	%	 	 	8.5	%	 	 	6.7	%	 	 	4.8	%	
- Total	 	 	8.1	%	 	 	2.7	%	 	 	10.0	%	 	 	10.0	%	 	 	8.7	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- North America	 	 	8.0	%	 	 	2.5	%	 	 	10.1	%	 	 	10.0	%	 	 	8.3	%	
- International, principally Europe	 	 	8.5	%	 	 	3.6	%	 	 	9.3	%	 	 	9.7	%	 	 	10.3	%	
- Total, as above	 	 	8.1	%	 	 	2.7	%	 	 	10.0	%	 	 	10.0	%	 	 	8.7	%	

 	 	Notes:	
 		
-	 	Data exclude discontinued operations.	
 		
-	 	Operating profit and margins by segment and geographic area are before general corporate expense, (gain) on sale of corporate fixed assets and charge for litigation settlement.	
 		
-	 	See 2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — page 8.	
 Page 6 

 

MASCO CORPORATION
Quarterly Segment Data — 2008
Including Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Net Sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	$	2,276	 	 	$	488	 	 	$	584	 	 	$	608	 	 	$	596	 	
- Plumbing Products	 	 	3,042	 	 	 	620	 	 	 	788	 	 	 	836	 	 	 	798	 	
- Installation and Other Services	 	 	1,861	 	 	 	375	 	 	 	492	 	 	 	508	 	 	 	486	 	
- Decorative Architectural Products	 	 	1,629	 	 	 	328	 	 	 	446	 	 	 	476	 	 	 	379	 	
- Other Specialty Products	 	 	716	 	 	 	153	 	 	 	201	 	 	 	194	 	 	 	168	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	9,524	 	 	$	1,964	 	 	$	2,511	 	 	$	2,622	 	 	$	2,427	 	

- North America	 	$	7,482	 	 	$	1,547	 	 	$	1,975	 	 	$	2,067	 	 	$	1,893	 	
- International, principally Europe	 	 	2,042	 	 	 	417	 	 	 	536	 	 	 	555	 	 	 	534	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	9,524	 	 	$	1,964	 	 	$	2,511	 	 	$	2,622	 	 	$	2,427	 	

Operating Profit (Loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabinets and Related Products	 	$	4	 	 	$	(84	)	 	$	23	 	 	$	37	 	 	$	28	 	
- Plumbing Products	 	 	104	 	 	 	(195	)	 	 	92	 	 	 	108	 	 	 	99	 	
- Installation and Other Services	 	 	(46	)	 	 	(54	)	 	 	10	 	 	 	4	 	 	 	(6	)	
- Decorative Architectural Products	 	 	299	 	 	 	42	 	 	 	94	 	 	 	89	 	 	 	74	 	
- Other Specialty Products	 	 	(124	)	 	 	(161	)	 	 	16	 	 	 	13	 	 	 	8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	237	 	 	$	(452	)	 	$	235	 	 	$	251	 	 	$	203	 	

- North America	 	$	493	 	 	$	(49	)	 	$	193	 	 	$	200	 	 	$	149	 	
- International, principally Europe	 	 	(256	)	 	 	(403	)	 	 	42	 	 	 	51	 	 	 	54	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	237	 	 	$	(452	)	 	$	235	 	 	$	251	 	 	$	203	 	

General Corporate Expense (GCE), Net	 	 	144	 	 	 	34	 	 	 	32	 	 	 	35	 	 	 	43	 	

(Gain) on Sales of Corporate Fixed Assets, Net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Charge for Litigation Settlement	 	 	9	 	 	 	—	 	 	 	9	 	 	 	—	 	 	 	—	 	

Operating Profit (Loss) (after GCE and Adjustments)	 	 	84	 	 	 	(486	)	 	 	194	 	 	 	216	 	 	 	160	 	

Other Income (Expense), Net	 	 	(283	)	 	 	(87	)	 	 	(56	)	 	 	(56	)	 	 	(84	)	

(Loss) Income from Continuing Operations before Income Taxes and Minority Interest	 	$	(199	)	 	$	(573	)	 	$	138	 	 	$	160	 	 	$	76	 	

Margins:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	 	0.2	%	 	 	-17.2	%	 	 	3.9	%	 	 	6.1	%	 	 	4.7	%	
- Plumbing Products	 	 	3.4	%	 	 	-31.5	%	 	 	11.7	%	 	 	12.9	%	 	 	12.4	%	
- Installation and Other Services	 	 	-2.5	%	 	 	-14.4	%	 	 	2.0	%	 	 	0.8	%	 	 	-1.2	%	
- Decorative Architectural Products	 	 	18.4	%	 	 	12.8	%	 	 	21.1	%	 	 	18.7	%	 	 	19.5	%	
- Other Specialty Products	 	 	-17.3	%	 	 	-105.2	%	 	 	8.0	%	 	 	6.7	%	 	 	4.8	%	
- Total	 	 	2.5	%	 	 	-23.0	%	 	 	9.4	%	 	 	9.6	%	 	 	8.4	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- North America	 	 	6.6	%	 	 	-3.2	%	 	 	9.8	%	 	 	9.7	%	 	 	7.9	%	
- International, principally Europe	 	 	-12.5	%	 	 	-96.6	%	 	 	7.8	%	 	 	9.2	%	 	 	10.1	%	
- Total, as above	 	 	2.5	%	 	 	-23.0	%	 	 	9.4	%	 	 	9.6	%	 	 	8.4	%	

 	 	Notes:	
 		
-	 	Data exclude discontinued operations.	
 		
-	 	Operating profit (loss) and margins by segment and geographic area are before general corporate expense, (gain) on sale of corporate fixed assets and charge for litigation settlement.	
 		
-	 	See 2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — page 8.	
 Page 7 

 

MASCO CORPORATION
Quarterly Segment Data — 2008
Costs and Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Business Rationalizations & Other Initiatives	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	$	23	 	 	$	13	 	 	$	6	 	 	$	3	 	 	$	1	 	
- Plumbing Products	 	 	24	 	 	 	13	 	 	 	6	 	 	 	2	 	 	 	3	 	
- Installation and Other Services	 	 	15	 	 	 	5	 	 	 	1	 	 	 	4	 	 	 	5	 	
- Decorative Architectural Products	 	 	2	 	 	 	—	 	 	 	1	 	 	 	1	 	 	 	—	 	
- Other Specialty Products	 	 	8	 	 	 	7	 	 	 	1	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	72	 	 	$	38	 	 	$	15	 	 	$	10	 	 	$	9	 	

- North America	 	$	47	 	 	$	25	 	 	$	7	 	 	$	7	 	 	$	8	 	
- International, principally Europe	 	 	25	 	 	 	13	 	 	 	8	 	 	 	3	 	 	 	1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	72	 	 	$	38	 	 	$	15	 	 	$	10	 	 	$	9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
General Corporate Expense (GCE), Net	 	 	7	 	 	 	2	 	 	 	—	 	 	 	5	 	 	 	—	 	

- Total	 	$	79	 	 	$	40	 	 	$	15	 	 	$	15	 	 	$	9	 	

Goodwill and Other Intangible Assets Impairment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Cabinets and Related Products	 	$	59	 	 	$	59	 	 	$	—	 	 	$	—	 	 	$	—	 	
- Plumbing Products	 	 	203	 	 	 	203	 	 	 	—	 	 	 	—	 	 	 	—	 	
- Installation and Other Services	 	 	52	 	 	 	52	 	 	 	—	 	 	 	—	 	 	 	—	 	
- Decorative Architectural Products	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
- Other Specialty Products	 	 	153	 	 	 	153	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	467	 	 	$	467	 	 	$	—	 	 	$	—	 	 	$	—	 	

- North America	 	$	62	 	 	$	62	 	 	$	—	 	 	$	—	 	 	$	—	 	
- International, principally Europe	 	 	405	 	 	 	405	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total, as above	 	$	467	 	 	$	467	 	 	$	—	 	 	$	—	 	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
General Corporate Expense (GCE), Net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
- Total	 	$	467	 	 	$	467	 	 	$	—	 	 	$	—	 	 	$	—	 	

 	 	Notes:	
 		
-	 	Business rationalizations and other initiatives include costs and charges for business consolidations, plant closures, headcount reductions, system implementations and other initiatives.	
 Page 8 

 

MASCO CORPORATION
Other Income (Expense), Net
2009 & 2008 — by Quarter — Unaudited
(in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2009	 	 	2008	 	
 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	 	Year	 	 	Qtr. 4	 	 	Qtr. 3	 	 	Qtr. 2	 	 	Qtr. 1	 	
Interest Expense	 	 	 	 	 	 	 	 	 	$	(56	)	 	$	(57	)	 	$	(56	)	 	$	(228	)	 	$	(56	)	 	$	(59	)	 	$	(57	)	 	$	(56	)	
Income from Cash and Cash Investments	 	 	 	 	 	 	 	 	 	 	2	 	 	 	1	 	 	 	3	 	 	 	22	 	 	 	5	 	 	 	6	 	 	 	5	 	 	 	6	 	
Other Interest Income	 	 	 	 	 	 	 	 	 	 	1	 	 	 	—	 	 	 	—	 	 	 	2	 	 	 	1	 	 	 	1	 	 	 	—	 	 	 	—	 	
Realized Gains (Losses) from Financial Investments, Net	 	 	 	 	 	 	 	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1	 	 	 	1	 	 	 	—	 	 	 	3	 	 	 	(3	)	
Impairment Charges for Financial Investments	 	 	 	 	 	 	 	 	 	 	—	 	 	 	(7	)	 	 	(3	)	 	 	(58	)	 	 	(28	)	 	 	(1	)	 	 	(3	)	 	 	(26	)	
Other, Net	 	 	 	 	 	 	 	 	 	 	4	 	 	 	14	 	 	 	(3	)	 	 	(22	)	 	 	(10	)	 	 	(3	)	 	 	(4	)	 	 	(5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Other Income (Expense), Net	 	 	 	 	 	 	 	 	 	$	(49	)	 	$	(49	)	 	$	(59	)	 	$	(283	)	 	$	(87	)	 	$	(56	)	 	$	(56	)	 	$	(84	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	Other, Net, includes currency (losses) gains of ($2) million, $11 million, and $5 million, for the first, second, and third quarters of 2009, respectively.	
 		
•	 	Other, Net, includes currency (losses) of ($10) million, ($5) million, ($3) million, and ($11) million for the first, second, third and fourth quarters of 2008, respectively.	
 Page 9 

 

MASCO CORPORATION
Condensed Consolidated Balance Sheets — Unaudited
(in millions)
 	 	 	 	 	 	 	 	 	
 	 	September 30,	 	 	December 31,	 	
 	 	2009	 	 	2008	 	
Assets	 	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	 	
Cash and Cash Investments	 	$	1,199	 	 	$	1,028	 	
Receivables	 	 	1,193	 	 	 	999	 	
Prepaid Expenses and Other	 	 	325	 	 	 	332	 	
Inventories	 	 	798	 	 	 	941	 	
 	 	 	 	 	 	 	
Total Current Assets	 	 	3,515	 	 	 	3,300	 	
Property and Equipment, Net	 	 	2,007	 	 	 	2,136	 	
Goodwill	 	 	3,387	 	 	 	3,371	 	
Other Intangible Assets, Net	 	 	293	 	 	 	299	 	
Other Assets	 	 	360	 	 	 	377	 	
 	 	 	 	 	 	 	
Total Assets	 	$	9,562	 	 	$	9,483	 	

Liabilities	 	 	 	 	 	 	 	 	
Current Liabilities:	 	 	 	 	 	 	 	 	
Notes Payable	 	$	369	 	 	$	71	 	
Accounts Payable	 	 	623	 	 	 	531	 	
Accrued Liabilities	 	 	867	 	 	 	945	 	
 	 	 	 	 	 	 	
Total Current Liabilities	 	 	1,859	 	 	 	1,547	 	
Long-Term Debt	 	 	3,606	 	 	 	3,915	 	
Deferred Income Taxes and Other	 	 	1,028	 	 	 	1,040	 	
 	 	 	 	 	 	 	
Total Liabilities	 	 	6,493	 	 	 	6,502	 	
 	 	 	 	 	 	 	 	 	
Shareholders’ Equity	 	 	3,069	 	 	 	2,981	 	
 	 	 	 	 	 	 	
Total Liabilities and Shareholders’ Equity	 	$	9,562	 	 	$	9,483	 	
 	 	 	 	 	 	 	
 Page 10 

 

MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	 	 	
 	 	September 30,	 	 	 	 	
 	 	2009	 	 	2008	 	 	% Δ	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales, As Reported	 	$	2,094	 	 	$	2,511	 	 	 	-16.6	%	
- Acquisitions	 	 	—	 	 	 	—	 	 	 	 	 	
- Currency Translation	 	 	38	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Net Sales, Excluding Acquisitions and Currency Translation	 	$	2,132	 	 	$	2,511	 	 	 	-15.1	%	

North America Net Sales, As Reported	 	$	1,630	 	 	$	1,975	 	 	 	-17.5	%	
- Acquisitions	 	 	—	 	 	 	—	 	 	 	 	 	
- Currency Translation	 	 	3	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
North America Net Sales, Excluding Acquisitions and Currency Translation	 	$	1,633	 	 	$	1,975	 	 	 	-17.3	%	

International Net Sales, As Reported	 	$	464	 	 	$	536	 	 	 	-13.4	%	
- Acquisitions	 	 	—	 	 	 	—	 	 	 	 	 	
- Currency Translation	 	 	35	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
International Net Sales, Excluding Acquisitions and Currency Translation	 	$	499	 	 	$	536	 	 	 	-6.9	%	

 	 	Nine Months Ended	 	 	 	 	
 	 	September 30,	 	 	 	 	
 	 	2009	 	 	2008	 	 	% Δ	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales, As Reported	 	$	5,923	 	 	$	7,560	 	 	 	-21.7	%	
- Acquisitions	 	 	(9	)	 	 	—	 	 	 	 	 	
- Currency Translation	 	 	199	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Net Sales, Excluding Acquisitions and Currency Translation	 	$	6,113	 	 	$	7,560	 	 	 	-19.1	%	

North America Net Sales, As Reported	 	$	4,694	 	 	$	5,935	 	 	 	-20.9	%	
- Acquisitions	 	 	(9	)	 	 	—	 	 	 	 	 	
- Currency Translation	 	 	20	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
North America Net Sales, Excluding Acquisitions and Currency Translation	 	$	4,705	 	 	$	5,935	 	 	 	-20.7	%	

International Net Sales, As Reported	 	$	1,229	 	 	$	1,625	 	 	 	-24.4	%	
- Acquisitions	 	 	—	 	 	 	—	 	 	 	 	 	
- Currency Translation	 	 	179	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
International Net Sales, Excluding Acquisitions and Currency Translation	 	$	1,408	 	 	$	1,625	 	 	 	-13.4	%	
 	 	 	 	 	 	 	 	 	 	 	
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	The Company presents information comparing results from one period to another excluding the results of businesses acquired in order to assess the performance of the underlying businesses and to assess to what extent acquisitions are driving growth.	
 		
•	 	The Company also presents information comparing results of International operations from one period to another using constant exchange rates. To present this information, current period results for foreign entities are converted into U.S. dollars using the prior period’s exchange rates, rather than exchange rates for the current period. The Company presents this information in order to assess how the underlying businesses performed in local currencies before taking into account currency fluctuations.	
 		
•	 	The currency translation effect on North American net sales includes currency translation related to Canadian business units.	
 Page 11 

 

MASCO CORPORATION
GAAP Reconciliation of Operating Profit and Margins — Unaudited
(dollars in millions)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	
 	 	2009	 	 	2008	 	
 	 	$	 	 	Margin	 	 	$	 	 	Margin	 	
Operating Profit, As Reported	 	$	138	 	 	 	6.6	%	 	$	194	 	 	 	7.7	%	
Impairment Charges for Goodwill and Other Intangible Assets	 	 	—	 	 	 	 	 	 	 	—	 	 	 	 	 	
Business Rationalizations and Other Initiatives	 	 	21	 	 	 	 	 	 	 	15	 	 	 	 	 	
Charge for Litigation Settlement	 	 	7	 	 	 	 	 	 	 	9	 	 	 	 	 	
Charge for Defined-Benefit Plan Curtailment	 	 	—	 	 	 	 	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Profit, As Reconciled	 	$	166	 	 	 	7.9	%	 	$	218	 	 	 	8.7	%	

 	 	Nine Months Ended September 30,	 	
 	 	2009	 	 	2008	 	
 	 	$	 	 	Margin	 	 	$	 	 	Margin	 	
Operating Profit, As Reported	 	$	251	 	 	 	4.2	%	 	$	570	 	 	 	7.5	%	
Impairment Charges for Goodwill and Other Intangible Assets	 	 	—	 	 	 	 	 	 	 	—	 	 	 	 	 	
Business Rationalizations and Other Initiatives	 	 	67	 	 	 	 	 	 	 	39	 	 	 	 	 	
Charge for Litigation Settlement	 	 	7	 	 	 	 	 	 	 	9	 	 	 	 	 	
Charge for Defined-Benefit Plan Curtailment	 	 	8	 	 	 	 	 	 	 	—	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Profit, As Reconciled	 	$	333	 	 	 	5.6	%	 	$	618	 	 	 	8.2	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	The Company believes that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States.	
 Page 12 

 

MASCO CORORATION
GAAP Reconciliation of Operating (Loss) Profit and Shareholders’ Equity — Unaudited
(in millions)
 	 	 	 	 	
 	 	Twelve	 	
 	 	Months Ended	 	
 	 	September 30,	 	
 	 	2009	 	
 	 	 	 	 	
Operating (Loss) Profit, As Reported	 	$	(235	)	
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations	 	 	467	 	
Charge for Defined Benefit Plan Curtailment	 	 	8	 	
Charge for Litigation Settlement	 	 	7	 	
 	 	 	 	
Operating Profit, As Reconciled	 	$	247	 	

 	 	Twelve Months Ended	 	
 	 	September 30,	 	
 	 	2009	 	 	2008	 	
 	 	 	 	 	 	 		
Shareholders’ Equity, As Reported	 	$	3,069	 	 	$	3,750	 	
Impairment Charges for Goodwill and Other Intangible Assets (after tax)	 	 	445	 	 	 	208	 	
Charge for Defined Benefit Plan Curtailment (after tax)	 	 	5	 	 	 	—	 	
Charge for Litigation Settlement (after tax)	 	 	4	 	 	 	6	 	
 	 	 	 	 	 	 	
Shareholders’ Equity, As Reconciled	 	$	3,523	 	 	$	3,964	 	
 	 	 	 	 	 	 	
Notes:

•	 	Data exclude discontinued operations.	
 		
•	 	The Company believes that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States.	
 		
•	 	This information is provided as detail for the calculation of return on invested capital (“ROIC”) which is calculated as after-tax operating profit (last twelve months, as reconciled) divided by the total of average debt (net of average cash) and average shareholders’ equity.	
 Page 13 

 

Masco Corporation
Restatement for Discontinued Operations — Unaudited
September 30, 2009
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	March 31, 2009	 	 	 	 	 	 	 	 	 	June 30, 2009	 	 	
 	 	 	 	 	 	Discontinued	 	 	 	 	 	 	 	 	 	Discontinued	 	 	
 	 	As Reported	 	Operations	 	As Restated	 	As Reported	 	Operations	 	As Restated	
 	 	     	 	     	
Net Sales	 	$	1,819	 	 	$	13	 	 	$	1,806	 	 	$	2,036	 	 	$	13	 	 	$	2,023	 	
Cost of Sales	 	 	1,403	 	 	 	12	 	 	 	1,391	 	 	 	1,490	 	 	 	13	 	 	 	1,477	 	
 	 	     	 	     	
Gross Profit	 	 	416	 	 	 	1	 	 	 	415	 	 	 	546	 	 	 	—	 	 	 	546	 	
Selling, general and administrative expenses	 	 	415	 	 	 	5	 	 	 	410	 	 	 	434	 	 	 	4	 	 	 	430	 	
Charge for defined benefit plan curtailment	 	 	8	 	 	 	—	 	 	 	8	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	     	 	     	
Operating Profit (Loss)	 	 	(7	)	 	 	(4	)	 	 	(3	)	 	 	112	 	 	 	(4	)	 	 	116	 	
Other income (expense), net	 	 	(59	)	 	 	—	 	 	 	(59	)	 	 	(49	)	 	 	—	 	 	 	(49	)	
 	 	     	 	     	
(Loss) Income from continuing operations before income taxes	 	 	(66	)	 	 	(4	)	 	 	(62	)	 	 	63	 	 	 	(4	)	 	 	67	 	
Income tax expense (benefit)	 	 	8	 	 	 	(9	)	 	 	17	 	 	 	1	 	 	 	9	 	 	 	(8	)	
 	 	     	 	     	
(Loss) Income from continuing operations	 	 	(74	)	 	 	5	 	 	 	(79	)	 	 	62	 	 	 	(13	)	 	 	75	 	
(Loss) income from discontinued operations, net	 	 	—	 	 	 	5	 	 	 	5	 	 	 	1	 	 	 	(13	)	 	 	(12	)	
 	 	     	 	     	
Net (Loss) Income	 	 	(74	)	 	 	—	 	 	 	(74	)	 	 	63	 	 	 	—	 	 	 	63	 	
Less: Net income attributable to noncontrolling interest	 	 	(7	)	 	 	—	 	 	 	(7	)	 	 	(8	)	 	 	—	 	 	 	(8	)	
 	 	     	 	     	
Net (Loss) Income Attributable to Masco Corporation	 	$	(81	)	 	$	—	 	 	$	(81	)	 	$	55	 	 	$	—	 	 	$	55	 	

Earnings per common share attributable to Masco Corporation (diluted):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) from continuing operations	 	$	(0.23	)	 	$	0.02	 	 	$	(0.25	)	 	$	0.15	 	 	$	(0.04	)	 	$	0.19	 	
Income (Loss) from discontinued operations	 	 	—	 	 	 	0.02	 	 	 	0.01	 	 	 	—	 	 	 	(0.04	)	 	 	(0.03	)	
 	 	     	 	     	
Net income (Loss)	 	$	(0.23	)	 	$	0.00	 	 	$	(0.23	)	 	$	0.15	 	 	$	0.00	 	 	$	0.15	 	

Average diluted common shares outstanding	 	 	351	 	 	 	351	 	 	 	351	 	 	 	350	 	 	 	350	 	 	 	350	 	
 	 	     	 	     	
Note: Earnings per common share may not add due to rounding and allocation to participating securities
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