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 27, 2014

 
Masco Corporation
(Exact name of Registrant as Specified in Charter)

Delaware
(State or Other Jurisdiction
of Incorporation)	 	1-5794
(Commission File Number)	 	38-1794485
(IRS Employer
Identification No.)	

21001 Van Born Road, Taylor, Michigan
(Address of Principal Executive Offices)	 	48180
(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 27, 2014 reporting Masco Corporation’s financial results for the third quarter of 2014 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2014. On October 28, 2014, Masco Corporation will hold an investor conference call and web cast to discuss financial results for the third quarter 2014.
 
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 27, 2014 reporting Masco Corporation’s financial results for the third quarter 2014 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2014.
 
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 27, 2014	 	 	
 
2 

 
EXHIBIT INDEX
 
99                                   Press Release of Masco Corporation dated October 27, 2014 reporting Masco Corporation’s financial results for the third quarter 2014 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2014.
 
3 

Exhibit 99

 
MASCO CONTINUES REVENUE AND PROFIT GROWTH TREND IN THIRD QUARTER 2014
 
Key Highlights
 
·                   Sales increased 4 percent to $2.2 billion
·                   Adjusted operating profit margin increased to 10.9 percent
·                   Adjusted EPS grew 15 percent to $.31 per common share
·                   Reversed deferred tax asset valuation allowance of $517 million
 
TAYLOR, Mich. (October 27, 2014) — Masco Corporation (NYSE: MAS) reported net sales and adjusted operating profit growth in the third quarter of 2014 driven primarily by the Plumbing Products, Other Specialty and Installation and Other Services segments. Adjusted operating profit margin rose to 10.9 percent, reflecting the Company’s continued focus on cost management and strong operational leverage on growth.
 
2014 Third Quarter Commentary
 
·                   Net sales from continuing operations increased 4 percent to $2.2 billion. North American sales increased 4 percent and international sales increased 5 percent in U.S. dollars and 3 percent in local currency
·                   Compared to third quarter 2013, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, were as follows:
·                   Gross margins improved to 28.6 percent compared to 28.5 percent
·                   Operating margins improved to 10.9 percent compared to 10.3 percent
·                   Income from continuing operations was $.31 per common share compared to $.27 per common share
·                   As a result of the continued profitability of the Company’s U.S. operations, a $466 million ($1.32 per share) net tax benefit was recorded in the third quarter 2014 primarily from the release of the $517 million valuation allowance against its U.S. Federal and certain state deferred tax assets. This reversal was offset by an additional $51 million of tax expense to adjust taxes recorded in the first half of 2014 to the higher third quarter effective tax rate
·                   Income from continuing operations, as reported, was $1.51 per common share
·                   Liquidity at the end of the third quarter was approximately $1.6 billion
 
2014 Third Quarter Operating Segment Highlights
 
·                   Plumbing Products’ net sales increased 4 percent, fueled by growth in the wholesale channel
·                   Decorative Architectural Products’ net sales were flat against the third quarter of 2013 which experienced increased sales from last year’s successful new product launches
·                   Cabinets and Related Products’ net sales increased 2 percent, driven by sales growth to dealers, offset by lower sales to home centers
·                   Installation and Other Services’ net sales increased 8 percent with continued growth in all channels
·                   Other Specialty Products’ net sales increased 8 percent, led by a strong performance from our North American window business
 
1 

 
“We delivered improved top- and bottom- line results in the third quarter,” said Masco’s President and CEO, Keith Allman. “The positive trends we saw in the second quarter continued in the third with particular strength in our Plumbing wholesale channel, ongoing growth in all channels of our Installation segment, and solid momentum in our North American and international window businesses. In our Cabinet business, we remain steadfast in our efforts to strengthen our performance and are actively positioning the business for future growth and profitability.”
 
Outlook
 
“Our performance this year has been solid and reflects our ability to successfully execute against our 2014 priorities,” continued Mr. Allman. “We are committed to continuously improving our operating performance and, despite a slower than anticipated housing recovery, our long-term outlook remains positive. We are focused on growing market share with our leading brands, accelerating our innovation pipeline, and driving operational leverage. This focus, coupled with our recently-announced strategic initiatives to enhance shareholder value through the active management of our portfolio, effective capital allocation, cost control and execution, will further position us for long-term, profitable growth.”
 
About Masco
 
Headquartered in Taylor, Michigan, Masco Corporation is one of the world’s leading manufacturers of branded building products, as well as a leading provider of services that include the installation of insulation and other building products.
 
The 2014 third quarter supplemental material, including a presentation in PDF format, is available on the Company’s website at www.masco.com.
 
Conference Call Details
 
A conference call regarding items contained in this release is scheduled for Tuesday, October 28, 2014 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 15817898. The conference call will be webcast simultaneously and in its entirety through the Company’s website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on the Company’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 15817898. The telephone replay will be available approximately two hours after the end of the call and continue through November 11, 2014.
 
Safe Harbor Statement
 
Statements contained in this press release that reflect our views about our future performance constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods. These views 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 our reliance on new home construction and home improvement, our reliance on key customers, the cost and availability of raw materials, uncertainty in the international economy, shifts in consumer preferences and
 
2 

 
purchasing practices, our ability to improve our underperforming businesses, our ability to maintain our competitive position in our industries, risks associated with the proposed spin-off of our Services Business, our ability to realize the expected benefits of the spin-off, the timing and terms of our share repurchase program, and our ability to reduce corporate expense and simplify our organizational structure. We discuss many of the risks we face 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. Our forward-looking statements in this press release speak only as of the date of this press release. 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.
 
The Company believes that the non-GAAP performance measures and ratios that are contained herein, 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. Additional information about the Company is contained in the Company’s filings with the Securities and Exchange Commission and is available on Masco’s website at www.masco.com.
 
Investor Contact
 
Irene Tasi
Director — Investor Relations
313.792.5500
irene_tasi@mascohq.com
 
# # #
 
3 

 
MASCO CORPORATION
Condensed Consolidated Statements of Operations - Unaudited
For the Three Months and Nine Months Ended September 30, 2014 and 2013
(in millions, except per common share data)

 	 	Three Months Ended	 	Nine Months Ended	 	
 	 	September 30,	 	September 30,	 	
 	 	2014	 	2013	 	2014	 	2013	 	
 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	2,232	 	$	2,150	 	$	6,457	 	$	6,175	 	
Cost of sales	 	1,621	 	1,543	 	4,638	 	4,451	 	
Gross profit	 	611	 	607	 	1,819	 	1,724	 	
 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	409	 	395	 	1,225	 	1,192	 	
Operating profit	 	202	 	212	 	594	 	532	 	
 	 	 	 	 	 	 	 	 	 	
Other income (expense), net	 	(50	)	(52	)	(159	)	(155	)	
Income from continuing operations before income taxes	 	152	 	160	 	435	 	377	 	
 	 	 	 	 	 	 	 	 	 	
Income tax benefit (expense)	 	403	 	(38	)	361	 	(91	)	
Income from continuing operations	 	555	 	122	 	796	 	286	 	
 	 	 	 	 	 	 	 	 	 	
Income (loss) from discontinued operations, net	 	1	 	(2	)	(2	)	(16	)	
Net income	 	556	 	120	 	794	 	270	 	
 	 	 	 	 	 	 	 	 	 	
Less: Net income attributable to noncontrolling interest	 	13	 	11	 	38	 	30	 	
Net income attributable to Masco Corporation	 	$	543	 	$	109	 	$	756	 	$	240	 	
 	 	 	 	 	 	 	 	 	 	
Income per common share attributable to Masco Corporation (diluted):	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	$	1.51	 	$	0.31	 	$	2.11	 	$	0.71	 	
Loss from discontinued operations, net	 	—	 	(0.01	)	(0.01	)	(0.04	)	
Net income	 	$	1.51	 	$	0.30	 	$	2.10	 	$	0.67	 	
 	 	 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	 	353	 	352	 	353	 	352	 	
 	 	 	 	 	 	 	 	 	 	
Amounts attributable to Masco Corporation:	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	$	542	 	$	111	 	$	758	 	$	256	 	
Income (loss) from discontinued operations, net	 	1	 	(2	)	(2	)	(16	)	
Net income attributable to Masco Corporation	 	$	543	 	$	109	 	$	756	 	$	240	 	
 
Historical information is available on our website.
 
1 

 
MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three Months and Nine Months Ended September 30, 2014 and 2013
(in millions, except per common share data)

 	 	Three Months Ended	 	Nine Months Ended	 	
 	 	September 30,	 	September 30,	 	
 	 	2014	 	2013	 	2014	 	2013	 	
Gross Profit and Operating Profit Reconciliations	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	2,232	 	$	2,150	 	$	6,457	 	$	6,175	 	
 	 	 	 	 	 	 	 	 	 	
Gross profit, as reported	 	$	611	 	$	607	 	$	1,819	 	$	1,724	 	
 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	28	 	6	 	32	 	23	 	
 	 	 	 	 	 	 	 	 	 	
Gross profit, as adjusted	 	$	639	 	$	613	 	$	1,851	 	$	1,747	 	
 	 	 	 	 	 	 	 	 	 	
Gross margin, as reported	 	27.4	%	28.2	%	28.2	%	27.9	%	
Gross margin, as adjusted	 	28.6	%	28.5	%	28.7	%	28.3	%	
 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	202	 	$	212	 	$	594	 	$	532	 	
 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	41	 	10	 	55	 	36	 	
 	 	 	 	 	 	 	 	 	 	
Operating profit, as adjusted	 	$	243	 	$	222	 	$	649	 	$	568	 	
 	 	 	 	 	 	 	 	 	 	
Operating margin, as reported	 	9.1	%	9.9	%	9.2	%	8.6	%	
Operating margin, as adjusted	 	10.9	%	10.3	%	10.1	%	9.2	%	
 	 	 	 	 	 	 	 	 	 	
Earnings Per Common Share Reconciliation	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes, as reported	 	$	152	 	$	160	 	$	435	 	$	377	 	
 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	41	 	10	 	55	 	36	 	
Gains from financial investments, net	 	—	 	—	 	(4	)	(8	)	
Loss (earnings) from equity investments, net	 	—	 	(6	)	2	 	(13	)	
Income from continuing operations before income taxes, as adjusted	 	193	 	164	 	488	 	392	 	
 	 	 	 	 	 	 	 	 	 	
Tax at 36% rate	 	(69	)	(59	)	(176	)	(141	)	
 	 	 	 	 	 	 	 	 	 	
Less: Net income attributable to noncontrolling interest	 	13	 	11	 	38	 	30	 	
 	 	 	 	 	 	 	 	 	 	
Net income, as adjusted	 	$	111	 	$	94	 	$	274	 	$	221	 	
 	 	 	 	 	 	 	 	 	 	
Income per common share, as adjusted	 	$	0.31	 	$	0.27	 	$	0.78	 	$	0.63	 	
 	 	 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	 	353	 	352	 	353	 	352	 	
 
2 

 

MASCO CORPORATION
Condensed Consolidated Balance Sheets and
Other Financial Data - Unaudited	 	
 	(dollars in millions)	

 	 	September 30,	 	December 31,	 	
 	 	2014	 	2013	 	
Balance Sheet	 	 	 	 	 	
Assets	 	 	 	 	 	
Current Assets:	 	 	 	 	 	
Cash and cash investments	 	$	1,282	 	$	1,223	 	
Short-term bank deposits	 	275	 	321	 	
Receivables	 	1,229	 	1,004	 	
Inventories	 	862	 	765	 	
Prepaid expenses and other	 	353	 	155	 	
Total Current Assets	 	4,001	 	3,468	 	
 	 	 	 	 	 	
Property and equipment, net	 	1,153	 	1,252	 	
Goodwill	 	1,891	 	1,903	 	
Other intangible assets, net	 	147	 	149	 	
Other assets	 	181	 	185	 	
Total Assets	 	$	7,373	 	$	6,957	 	
 	 	 	 	 	 	
Liabilities	 	 	 	 	 	
Current Liabilities:	 	 	 	 	 	
Accounts payable	 	$	1,020	 	$	902	 	
Notes payable	 	505	 	6	 	
Accrued liabilities	 	890	 	874	 	
Total Current Liabilities	 	2,415	 	1,782	 	
 	 	 	 	 	 	
Long-term debt	 	2,919	 	3,421	 	
Deferred income taxes and other	 	681	 	967	 	
Total Liabilities	 	6,015	 	6,170	 	
Equity	 	1,358	 	787	 	
Total Liabilities and Equity	 	$	7,373	 	$	6,957	 	

 

 	 	As of	 	
 	 	September 30,	 	September 30,	 	
 	 	2014	 	2013	 	
Other Financial Data	 	 	 	 	 	
Working Capital Days	 	 	 	 	 	
Receivable days	 	47	 	49	 	
Inventory days	 	52	 	49	 	
Payable days	 	71	 	70	 	
Working capital	 	$	1,071	 	$	1,002	 	
Working capital as a % of sales (LTM)	 	12.7	%	12.1	%	

3 

 

MASCO CORPORATION
Condensed Consolidated Statement of Cash Flows
and Other Data - Unaudited	(dollars in millions)	

 	 	Nine Months Ended	 	
 	 	September 30,	 	
 	 	2014	 	2013	 	
Cash Flows From (For) Operating Activities:	 	 	 	 	 	
Cash provided by operating activities	 	$	543	 	$	489	 	
Working capital changes	 	(237	)	(139	)	
Net cash from operating activities	 	306	 	350	 	
 	 	 	 	 	 	
Cash Flows From (For) Financing Activities:	 	 	 	 	 	
Purchase of Company common stock	 	(39	)	(35	)	
Issuance of Company common stock	 	1	 	—	 	
Cash dividends paid	 	(86	)	(81	)	
Dividend paid to noncontrolling interest	 	(34	)	(34	)	
Debt, net	 	(2	)	(202	)	
Credit Agreement costs	 	—	 	(4	)	
Net cash for financing activities	 	(160	)	(356	)	
 	 	 	 	 	 	
Cash Flows From (For) Investing Activities:	 	 	 	 	 	
Capital expenditures	 	(82	)	(88	)	
Other, net	 	22	 	67	 	
Net cash from investing activities	 	(60	)	(21	)	
 	 	 	 	 	 	
Effects of exchange rate changes on cash and cash investments	 	(27	)	(2	)	
 	 	 	 	 	 	
Cash and Cash Investments:	 	 	 	 	 	
Decrease for the year	 	59	 	(29	)	
At January 1	 	1,223	 	1,040	 	
At June 30	 	$	1,282	 	$	1,011	 	

 	 	As of September 30,	 	
 	 	2014	 	2013	 	
Liquidity	 	 	 	 	 	
Cash and cash investments	 	$	1,282	 	$	1,011	 	
Short-term bank deposits	 	275	 	277	 	
Total Liquidity	 	$	1,557	 	$	1,288	 	
 
4 

 
MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Nine Months Ended September 30, 2014 and 2013
(dollars in millions)

 	 	Three Months Ended	 	 	 	Nine Months Ended	 	 	 	
 	 	September 30,	 	 	 	September 30,	 	 	 	
 	 	2014	 	2013	 	Change	 	2014	 	2013	 	Change	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cabinets and Related Products	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	266	 	$	262	 	2	%	$	756	 	$	763	 	-1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) profit, as reported	 	$	(35	)	$	(2	)	 	 	$	(55	)	$	(4	)	 	 	
Operating margin, as reported	 	-13.2	%	-0.8	%	 	 	-7.3	%	-0.5	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	28	 	1	 	 	 	30	 	4	 	 	 	
Accelerated depreciation related to plant closures	 	—	 	2	 	 	 	1	 	6	 	 	 	
Operating (loss) profit, as adjusted	 	(7	)	1	 	 	 	(24	)	6	 	 	 	
Operating margin, as adjusted	 	-2.6	%	0.4	%	 	 	-3.2	%	0.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	7	 	9	 	 	 	25	 	28	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	—	 	$	10	 	 	 	$	1	 	$	34	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Plumbing Products	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	855	 	$	820	 	4	%	$	2,504	 	$	2,384	 	5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	141	 	$	118	 	 	 	$	399	 	$	306	 	 	 	
Operating margin, as reported	 	16.5	%	14.4	%	 	 	15.9	%	12.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	—	 	5	 	 	 	2	 	13	 	 	 	
Accelerated depreciation related to plant closures	 	—	 	1	 	 	 	—	 	2	 	 	 	
Operating profit, as adjusted	 	141	 	124	 	 	 	401	 	321	 	 	 	
Operating margin, as adjusted	 	16.5	%	15.1	%	 	 	16.0	%	13.5	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	16	 	15	 	 	 	46	 	45	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	157	 	$	139	 	 	 	$	447	 	$	366	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Installation and Other Services	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	398	 	$	370	 	8	%	$	1,117	 	$	1,039	 	8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	20	 	$	18	 	 	 	$	33	 	$	22	 	 	 	
Operating margin, as reported	 	5.0	%	4.9	%	 	 	3.0	%	2.1	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	—	 	1	 	 	 	1	 	1	 	 	 	
Operating profit, as adjusted	 	20	 	19	 	 	 	34	 	23	 	 	 	
Operating margin, as adjusted	 	5.0	%	5.1	%	 	 	3.0	%	2.2	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	6	 	7	 	 	 	19	 	21	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	26	 	$	26	 	 	 	$	53	 	$	44	 	 	 	
 
5 

 
MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Nine Months Ended September 30, 2014 and 2013
(dollars in millions)

 	 	Three Months Ended	 	 	 	Nine Months Ended	 	 	 	
 	 	September 30,	 	 	 	September 30,	 	 	 	
 	 	2014	 	2013	 	Change	 	2014	 	2013	 	Change	 	
Decorative Architectural Products	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	523	 	$	522	 	0	%	$	1,560	 	$	1,519	 	3	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	91	 	$	93	 	 	 	$	280	 	$	286	 	 	 	
Operating margin, as reported	 	17.4	%	17.8	%	 	 	17.9	%	18.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	—	 	—	 	 	 	—	 	1	 	 	 	
Operating profit, as adjusted	 	91	 	93	 	 	 	280	 	287	 	 	 	
Operating margin, as adjusted	 	17.4	%	17.8	%	 	 	17.9	%	18.9	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	4	 	4	 	 	 	12	 	12	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	95	 	$	97	 	 	 	$	292	 	$	299	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Specialty Products	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	190	 	$	176	 	8	%	$	520	 	$	470	 	11	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	20	 	$	16	 	 	 	$	39	 	$	26	 	 	 	
Operating margin, as reported	 	10.5	%	9.1	%	 	 	7.5	%	5.5	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	—	 	—	 	 	 	1	 	2	 	 	 	
Accelerated depreciation related to plant closures	 	—	 	—	 	 	 	—	 	4	 	 	 	
Operating profit, as adjusted	 	20	 	16	 	 	 	40	 	32	 	 	 	
Operating margin, as adjusted	 	10.5	%	9.1	%	 	 	7.7	%	6.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	5	 	5	 	 	 	14	 	14	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	25	 	$	21	 	 	 	$	54	 	$	46	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	2,232	 	$	2,150	 	4	%	$	6,457	 	$	6,175	 	5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported - segment	 	$	237	 	$	243	 	 	 	$	696	 	$	636	 	 	 	
General corporate expense, net (GCE)	 	(35	)	(31	)	 	 	(102	)	(104	)	 	 	
Operating profit, as reported	 	202	 	212	 	 	 	594	 	532	 	 	 	
Operating margin, as reported	 	9.1	%	9.9	%	 	 	9.2	%	8.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges - segment	 	28	 	7	 	 	 	34	 	21	 	 	 	
Accelerated depreciation - segment	 	—	 	3	 	 	 	1	 	12	 	 	 	
Rationalization charges - GCE	 	13	 	—	 	 	 	20	 	3	 	 	 	
Operating profit, as adjusted	 	243	 	222	 	 	 	649	 	568	 	 	 	
Operating margin, as adjusted	 	10.9	%	10.3	%	 	 	10.1	%	9.2	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization - segment	 	38	 	40	 	 	 	116	 	120	 	 	 	
Depreciation and amortization - non-operating	 	2	 	3	 	 	 	8	 	9	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	283	 	$	265	 	 	 	$	773	 	$	697	 	 	 	
 
6 

 
MASCO CORPORATION
North American and International Data - Unaudited
For the Three Months and Nine Months Ended September 30, 2014 and 2013
(dollars in millions)

 	 	Three Months Ended	 	 	 	Nine Months Ended	 	 	 	
 	 	September 30,	 	 	 	September 30,	 	 	 	
 	 	2014	 	2013	 	Change	 	2014	 	2013	 	Change	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
North American	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,818	 	$	1,756	 	4	%	$	5,217	 	$	5,031	 	4	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	182	 	$	193	 	 	 	$	527	 	$	518	 	 	 	
Operating margin, as reported	 	10.0	%	11.0	%	 	 	10.1	%	10.3	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	28	 	7	 	 	 	33	 	14	 	 	 	
Accelerated depreciation related to plant closures	 	—	 	3	 	 	 	1	 	8	 	 	 	
Operating profit, as adjusted	 	210	 	203	 	 	 	561	 	540	 	 	 	
Operating margin, as adjusted	 	11.6	%	11.6	%	 	 	10.8	%	10.7	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	28	 	30	 	 	 	86	 	90	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	238	 	$	233	 	 	 	$	647	 	$	630	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
International	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	414	 	$	394	 	5	%	$	1,240	 	$	1,144	 	8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	55	 	$	50	 	 	 	$	169	 	$	118	 	 	 	
Operating margin, as reported	 	13.3	%	12.7	%	 	 	13.6	%	10.3	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	 	—	 	—	 	 	 	1	 	7	 	 	 	
Accelerated depreciation related to plant closures	 	—	 	—	 	 	 	—	 	4	 	 	 	
Operating profit, as adjusted	 	55	 	50	 	 	 	170	 	129	 	 	 	
Operating margin, as adjusted	 	13.3	%	12.7	%	 	 	13.7	%	11.3	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	10	 	10	 	 	 	30	 	30	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	65	 	$	60	 	 	 	$	200	 	$	159	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	2,232	 	$	2,150	 	4	%	$	6,457	 	$	6,175	 	5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported - segment	 	$	237	 	$	243	 	 	 	$	696	 	$	636	 	 	 	
General corporate expense, net (GCE)	 	(35	)	(31	)	 	 	(102	)	(104	)	 	 	
Operating profit, as reported	 	202	 	212	 	 	 	594	 	532	 	 	 	
Operating margin, as reported	 	9.1	%	9.9	%	 	 	9.2	%	8.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges - segment	 	28	 	7	 	 	 	34	 	21	 	 	 	
Accelerated depreciation - segment	 	—	 	3	 	 	 	1	 	12	 	 	 	
Rationalization charges - GCE	 	13	 	—	 	 	 	20	 	3	 	 	 	
Operating profit, as adjusted	 	243	 	222	 	 	 	649	 	568	 	 	 	
Operating margin, as adjusted	 	10.9	%	10.3	%	 	 	10.1	%	9.2	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization - segment	 	38	 	40	 	 	 	116	 	120	 	 	 	
Depreciation and amortization - non-operating	 	2	 	3	 	 	 	8	 	9	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	 	$	283	 	$	265	 	 	 	$	773	 	$	697	 	 	 	
 
7