Exhibit 99

 

		FOR IMMEDIATE RELEASE

Investor / Media Contact

Maria Duey

Vice President – Investor Relations and Communications

313.792.5500

maria_duey@mascohq.com

MASCO CORPORATION REPORTS THIRD

QUARTER 2011 RESULTS

2011 Third Quarter Commentary

 

•

Sales increased three percent to $2.0 billion compared to the third quarter of 2010.

 

•

Results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, compared to the third quarter of 2010 were as follows:

 

•

Gross profit margins were 25.1 percent compared to 26.9 percent.

 

•

Operating profit margins were 6.1 percent compared to 7.2 percent.

 

•

Income was $.08 per common share compared to $.11 per common share.

 

•

Income (loss), as reported, was $.10 per common share compared to $(.02) per common share for the third quarter of 2010.

 

•

Working capital as a percent of sales improved to 14.8 percent at September 30, 2011, compared to 16.2 percent at September 30, 2010.

 

•

We retired approximately $60 million in zero coupon notes.

 

•

We ended the third quarter of 2011 with over $1.6 billion of cash.

Taylor, Mich., (October 24, 2011) – Masco Corporation (NYSE: MAS) today reported that net sales for the third quarter ended September 30, 2011 increased three percent to $2.0 billion compared to the third quarter of 2010. North American sales were flat and International sales increased 12 percent. In local currencies, International sales increased four percent compared with the third quarter of 2010.

Income was $.08 per common share and $.11 per common share for the third quarters of 2011 and 2010, respectively, excluding the items in Exhibit A and with a normalized tax rate of 36 percent. As reported, income (loss) was $.10 per common share and $(.02) per common share for the third quarters ended September 30, 2011 and 2010, respectively.

Income for the three months ended September 30, 2011 included $19 million of pre-tax gains ($.03 per common share, after tax) related to distributions from private equity funds. Income for the three months ended September 30, 2010 included $3 million of pre-tax losses ($.01 per common share, after tax) related to the sale of financial investments.

 

1

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Income also included the impact of mark-to-market changes on certain metal commodity hedges aggregating $10 million of pre-tax losses ($.02 per common share, after tax) and $4 million of pre-tax gains ($.01 per common share, after tax), for the three month periods ended September 30, 2011 and 2010, respectively.

“Our sales increased three percent compared to third quarter 2010, reflecting strong sales of plumbing-related products driven by share gains of our Hansgrohe and Delta brands, share gains in our Installation segment and foreign currency translation. The third quarter of 2011 was negatively impacted by continued depressed conditions in new home construction and by the deferral of “big ticket” repair and remodel activity,” said Masco’s President and CEO Tim Wadhams. “We have continued to take aggressive steps to address these challenging market dynamics and further reduce our cost structure. In October, we closed multiple facilities and reduced headcount in those businesses most affected by these economic conditions. In addition, we identified four businesses within the Installation and other Services segment for divestiture. These businesses were focused on noncore diversified products which include framing, commercial drywall installation, and millwork.”

We continue to focus on the rationalization of our businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the third quarters of 2011 and 2010, we incurred costs and charges of $13 million pre-tax ($.02 per common share, after tax) and $39 million pre-tax ($.07 per common share, after tax), respectively, related to these initiatives.

Outlook 2011

“The foreclosure process, credit availability, declining home values, and consumer confidence continue to dampen the U.S. economy and hinder any housing recovery. We continue to believe that housing start levels in 2011 will be flat with 2010. Longer-term, however, we are confident about the fundamentals for the new home construction and home improvement markets and we are optimistic about the future,” said Tim Wadhams. “We continue to focus on the things we can control, including managing our cost structure and business portfolio, and launching exciting new programs in paint, plumbing, cabinets and builder hardware. In addition, we are funding global initiatives in our paint and plumbing businesses. We expect that improvements in our markets and in consumer spending, together with the changes we are driving across Masco and our financial strength, will create significant value for our shareholders in the future.”

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 2011 third quarter supplemental material, including a presentation in PDF format, will be distributed after the market closes on October 24, 2011 and will be available on the Company’s Web site at www.masco.com.

 

2

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A conference call regarding items contained in this release is scheduled for Tuesday, October 25, 2011 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 (719) 457-1529 (confirmation #7673584). 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 #7673584) approximately two hours after the end of the call and will continue through November 1, 2011.

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 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,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” 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, shifts in consumer preferences and purchasing practices, and our ability to achieve cost savings through the Masco Business System and other initiatives. 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. 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 Web site at www.masco.com.

 

3

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MASCO CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS—UNAUDITED

For the Three Months and Nine Months Ended September 30, 2011 and 2010

(In Millions, Except Per Common Share Data)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Net sales		$	2,006			$	1,957			$	5,800			$	5,857
Cost of Sales			1,511				1,463				4,348				4,325
Gross profit			495				494				1,452				1,532
Selling, general and administrative expenses			393				392				1,238				1,233
Operating profit			102				102				214				299
Other income (expense), net			(41	)			(64	)			(116	)			(223	)
Income before income taxes			61				38				98				76
Income tax expense			12				31				63				53
Net income (loss)			49				7				35				23
Less: Net income attributable to non-controlling interest			13				12				37				32
Net income (loss) attributable to Masco Corporation		$	36			$	(5	)		$	(2	)		$	(9	)
Income (loss) per common share attributable to Masco Corporation (diluted):
Net income (loss) attributable to Masco Corporation		$	0.10			$	(0.02	)		$	(0.01	)		$	(0.03	)
Average diluted common shares outstanding			348				349				348				349
Amounts attributable to Masco Corporation:
Net income (loss) attributable to Masco Corporation		$	36			$	(5	)		$	(2	)		$	(9	)

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Masco Corporation

Key Financial Data As Reported—Unaudited

Q3—2011 and 2010

(In Millions, Except Earnings Per Share)

 

 

Sales & Earnings		9/30/2011				9/30/2010				Change
Net Sales		$	2,006			$	1,957				3	%
Operating Profit		$	102			$	102				N/A
Operating Profit % of Net Sales			5.1	%			5.2	%			(10	)bps
Other Income (Expense), Net		$	(41	)		$	(64	)		$	23
Income Tax Expense		$	12			$	31				N/A
Income (Loss) Attributable to Masco Corporation		$	36			$	(5	)			N/A
Diluted EPS		$	0.10			$	(0.02	)			N/A
Operating Expenses		9/30/2011				9/30/2010				Change
Cost of Sales		$	1,511			$	1,463				3	%
Gross Margin			24.7	%			25.2	%			(50	)bps
SG&A Expenses (Including GCE)		$	393			$	392				0	%
SG&A as a % of net sales			19.6	%			20.0	%			40	bps
General Corporate Expense (GCE)		$	27			$	27				0	%
General Corp Expense as a % of net sales			1.3	%			1.4	%			10	bps
Business Segments		9/30/2011				9/30/2010				Change
Cabinets and Related Products:
Net Sales		$	307			$	357				-14	%
Operating Loss		$	(34	)		$	(61	)			N/A
Operating Loss % of Net Sales			-11.1	%			-17.1	%			600	bps
Plumbing Products:
Net Sales		$	768			$	686				12	%
Operating Profit		$	91			$	97				N/A
Operating Profit % of Net Sales			11.8	%			14.1	%			(230	)bps
Installation and Other Services:
Net Sales		$	315			$	292				8	%
Operating Loss		$	(27	)		$	(22	)			N/A
Operating Loss % of Net Sales			-8.6	%			-7.5	%			(110	)bps
Decorative Architectural Products:
Net Sales		$	455			$	463				-2	%
Operating Profit		$	88			$	104				N/A
Operating Profit % of Net Sales			19.3	%			22.5	%			(320	)bps
Other Specialty Products:
Net Sales		$	161			$	159				1	%
Operating Profit		$	12			$	11				N/A
Operating Profit % of Net Sales			7.5	%			6.9	%			60	bps
Total Segment Reported:
Net Sales		$	2,006			$	1,957				3	%
Operating Profit		$	130			$	129				N/A
Operating Profit % of Net Sales			6.5	%			6.6	%			(10	)bps

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Masco Corporation

Key Financial Data As Reported—Unaudited

Q3—2011 and 2010

(In Millions, Except Earnings Per Share)

 

 

Business Regions		9/30/2011				9/30/2010				Change
North America
Net Sales		$	1,524			$	1,528				0	%
Operating Profit		$	80			$	79				N/A
Operating Profit % of Net Sales			5.2	%			5.2	%			—	bps
International, principally Europe
Net Sales		$	482			$	429				12	%
Operating Profit		$	50			$	50				N/A
Operating Profit % of Net Sales			10.4	%			11.7	%			(130	)bps

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Masco Corporation

Key Financial Data As Reported—Unaudited

Year-to-date September 30, 2011 and 2010

(In Millions, Except Earnings Per Share)

 

 

Sales & Earnings		9/30/2011				9/30/2010				Change
Net Sales		$	5,800			$	5,857				-1	%
Operating Profit		$	214			$	299				N/A
Operating Profit % of Net Sales			3.7	%			5.1	%			(140	)bps
Other Income (Expense), Net		$	(116	)		$	(223	)		$	107
Income Tax Expense		$	63			$	53				N/A
(Loss) Attributable to Masco Corporation		$	(2	)		$	(9	)			N/A
Diluted EPS		$	(0.01	)		$	(0.03	)			N/A

 

Operating Expenses		9/30/2011				9/30/2010				Change
Cost of Sales		$	4,348			$	4,325				1	%
Gross Margin			25.0	%			26.2	%			(120	)bps
SG&A Expenses (Including GCE)		$	1,238			$	1,233				0	%
SG&A as a % of net sales			21.3	%			21.1	%			(20	)bps
General Corporate Expense (GCE)		$	95			$	84				13	%
General Corp Expense as a % of net sales			1.6	%			1.4	%			(20	)bps

 

Business Segments		9/30/2011				9/30/2010				Change
Cabinets and Related Products:
Net Sales		$	944			$	1,160				-19	%
Operating Loss		$	(111	)		$	(113	)			N/A
Operating Loss % of Net Sales			-11.8	%			-9.7	%			(210	)bps
Plumbing Products:
Net Sales		$	2,239			$	2,031				10	%
Operating Profit		$	270			$	267				N/A
Operating Profit % of Net Sales			12.1	%			13.1	%			(100	)bps
Installation and Other Services:
Net Sales		$	863			$	874				-1	%
Operating Loss		$	(93	)		$	(87	)			N/A
Operating Loss % of Net Sales			-10.8	%			-10.0	%			(80	)bps
Decorative Architectural Products:
Net Sales		$	1,322			$	1,357				-3	%
Operating Profit		$	247			$	300				N/A
Operating Profit % of Net Sales			18.7	%			22.1	%			(340	)bps
Other Specialty Products:
Net Sales		$	432			$	435				-1	%
Operating (Loss) Profit		$	2			$	16				N/A
Operating Profit % of Net Sales			0.5	%			3.7	%			(320	)bps
Total Segment Reported:
Net Sales		$	5,800			$	5,857				-1	%
Operating Profit		$	315			$	383				N/A
Operating Profit % of Net Sales			5.4	%			6.5	%			(110	)bps

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Masco Corporation

Key Financial Data As Reported—Unaudited

Year-to-date September 30, 2011 and 2010

(In Millions, Except Earnings Per Share)

 

 

Business Regions		9/30/2011				9/30/2010				Change
North America
Net Sales		$	4,420			$	4,617				-4	%
Operating Profit		$	178			$	257				N/A
Operating Profit % of Net Sales			4.0	%			5.6	%			(160	)bps
International, principally Europe
Net Sales		$	1,380			$	1,240				11	%
Operating Profit		$	137			$	126				N/A
Operating Profit % of Net Sales			9.9	%			10.2	%			(30	)bps
Working Capital		9/30/2011				9/30/2010
Receivable Days			48				49				(1	)
Inventory Days			56				53				3
Payable Days			62				51				11
Working Capital (Receivables+Inventory-Payables)		$	1,117			$	1,258				-11	%
Working Capital as a % of Sales (As Reported TTM1)			14.8	%			16.2	%			(140	)bps
Other		9/30/2011				9/30/2010
Dividend Payments			$80			$	81
Cash Paid for Share Repurchases2			$30			$	45
Common Shares Repurchased2			2				3
CAPEX			$106			$	88
Depreciation and Amortization			$188			$	209
Average diluted common shares outstanding			348				349
Balance Sheet Information
Long-Term Debt		$	3,224			$	4,036
Notes Payable		$	806			$	66
Total Debt		$	4,030			$	4,102
Shareholders’ Equity		$	1,487			$	2,700
Debt to Capital			73	%			60	%
Cash		$	1,610			$	1,537

¹ - Trailing Twelve Months

² - Common shares were repurchased to offset the effect of stock award grants in the first quarters of 2011 and 2010.

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MASCO CORPORATION

Reconciliations—Exhibit A—UNAUDITED

For the Three Months Ended September 30, 2011 and 2010

(In Millions, Except Per Common Share Data)

Gross Profit and Operating Profit Reconciliations

 

		Three Months Ended September 30,
		2011				2010
Sales		$	2,006			$	1,957
Gross profit, as reported		$	495			$	494
Rationalization charges			8				32
Gross profit, as adjusted		$	503			$	526
Gross margin, as reported			24.7	%			25.2	%
Gross margin, as adjusted			25.1	%			26.9	%
Operating profit, as reported		$	102			$	102
Rationalization charges			13				39
Impairment of intangible assets			7				—
Litigation charge			1				—
Operating profit, as adjusted		$	123			$	141
Operating margin, as reported			5.1	%			5.2	%
Operating margin, as adjusted			6.1	%			7.2	%
Earnings Per Common Share Reconciliation
		Three Months Ended September 30,
		2011				2010
Income before income taxes—as reported		$	61			$	38
Rationalization charges			13				39
Impairment of intangible assets			7				—
Litigation charge			1				—
(Gains) losses from financial investments			(19	)			3
Impairment of financial investments			—				—
Income before income taxes—as adjusted		$	63			$	80
Tax at 36% rate			(23	)			(29	)
Less: Net income attributable to non-controlling interest			(13	)			(12	)
Net income—as adjusted		$	27			$	39
Earnings per common share—as adjusted		$	0.08			$	0.11
Shares outstanding			348				349

The Company believes that certain non-GAAP performance measures and ratios used in managing the business may provide 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.

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Masco Corporation—3rd Quarter 2011

 

Page
1		Condensed Consolidated Statements of Operations—2011 & 2010 by Quarter—Unaudited
2		Notes to Condensed Consolidated Statements of Operations—2011 & 2010 by Quarter—Unaudited
3		2011 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and
		Other Initiatives—Unaudited
4		2011 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and
		Other Initiatives—Unaudited
5		2011 Costs and Charges for Business Rationalizations and Other Initiatives—Unaudited
6		2010 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and
		Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited
7		2010 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and
		Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited
8		2010 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges
		for Goodwill and Other Intangible Assets—Unaudited
9		Other Income (Expense), Net—2011 & 2010 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

 

Index

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MASCO CORPORATION

Condensed Consolidated Statements of Operations

2011 & 2010—by Quarter—Unaudited

(dollars in millions, except per share data)

 

				2011																2010
				Year		Qtr. 4		Qtr. 3				Qtr. 2				Qtr. 1				Year				Qtr. 4				Qtr. 3				Qtr. 2				Qtr. 1
		Net Sales						$	2,006			$	2,022			$	1,772			$	7,592			$	1,735			$	1,957			$	2,048			$	1,852
		Cost of Sales							1,511				1,490				1,347				5,752				1,427				1,463				1,502				1,360
		Gross Profit							495				532				425				1,840				308				494				546				492
		(Gross Margin as a % of Sales)							24.7	%			26.3	%			24.0	%			24.2	%			17.8	%			25.2	%			26.7	%			26.6	%
		SG&A Expense (before lines 1, 2, 3)							358				400				372				1,508				359				365				400				384
		(S,G&A Expense as a % of Sales)							17.8	%			19.8	%			21.0	%			19.9	%			20.7	%			18.7	%			19.5	%			20.7	%
		Operating Profit (before lines 1, 2, 3)							137				132				53				332				(51	)			129				146				108
		(Operating Margin as a % of Sales)							6.8	%			6.5	%			3.0	%			4.4	%			-2.9	%			6.6	%			7.1	%			5.8	%
1		General Corporate Expense (GCE), Net							27				36				32				110				26				27				27				30
		S,G&A Expense as a % of Sales (including lines 1, 2, 3)							19.6	%			21.8	%			22.8	%			30.8	%			63.7	%			20.0	%			20.8	%			22.4	%
2		Charge for Litigation Settlement							1				5				—				—				—				—				—				—
3		Impairment Charges for Goodwill and Other Intangible Assets							7				—				—				721				721				—				—				—
		Operating Profit (Loss) per F/S						$	102			$	91			$	21			$	(499	)		$	(798	)		$	102			$	119			$	78
		Income (Loss) Per Common Share Attributable to Masco Corporation (Diluted):
		Net Income (Loss)						$	0.10			$	0.02			$	(0.13	)		$	(3.00	)		$	(2.96	)		$	(0.02	)		$	0.01			$	(0.02	)

Please see page 2 for Notes.

 

Page 1

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MASCO CORPORATION

Notes To Condensed Consolidated Statements of Operations

2011 & 2010—by Quarter—Unaudited

Notes:

 

-	Data exclude discontinued operations.

 

-

Operating results for the first, second and third quarters of 2011 include costs and charges related to business rationalizations and other initiatives of $32 million pre-tax ($.06 per common share, after tax), $15 million pre-tax ($.03 per common share, after tax) and $13 million pre-tax ($.02 per common share, after tax), respectively.

 

-	Operating results for the second and third quarters of 2011 include mark-to-market losses on certain metal commodity hedges of $1 million pre-tax and $10 million pre-tax ($.02 per common share, after tax), respectively.

 

-	Operating results for the third quarter of 2011 include an impairment charge for intangible assets of $7 million pre-tax ($.01 per common share, after tax).

 

-	Operating results for the second and third quarters of 2011 include litigation settlement expenses of $5 million pre-tax ($.01 per common share, after tax) and $1 million pre-tax, respectively.

 

-	Net income (loss) for the first, second and third quarters of 2011 include income from financial investments of $17 million pre-tax ($.03 per common share, after tax), $33 million, pre-tax ($.06 per common share, after tax) and $19 million pre-tax ($.03 per common share, after tax), respectively.

 

-	Operating results for the fourth quarter of 2010 include non-cash impairment charges for goodwill and other intangible assets of $721 million pre-tax ($1.70 per common share, after tax).

 

-

Operating results for the first, second, third and fourth quarters of 2010 include costs and charges related to business rationalizations and other initiatives of $14 million pre-tax ($.03 per common share, after tax), $51 million pre-tax ($.09 per common share, after tax), $39 million pre-tax ($.07 per common share, after tax), and $104 million pre-tax ($.19 per common share, after tax), respectively.

 

-

Operating results for the first, second, third and fourth quarters of 2010 include mark-to-market gains(losses) on certain metal commodity hedges of $1 million pre-tax, ($2) million pre-tax, $4 million pre-tax ($.01 per common share, after tax), and $4 million pre-tax ($.01 per common share, after tax), respectively.

 

-	Net income (loss) for the second and fourth quarters of 2010 include non-cash impairment charges for financial investments of $33 million pre-tax ($.06 per common share, after tax) and $1 million pre-tax respectively.

 

-	Net income (loss) for the second, third and fourth quarters of 2010 include income (loss) from financial investments of $1 million pre-tax, ($3) million pre-tax ($.01 per common, after tax) and $11 million pre-tax ($.02 per common share, after tax), respectively.

 

Page 2

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MASCO CORPORATION

Quarterly Segment Data—2011

Excluding Costs and Charges for Business Rationalizations and Other Initiatives

and Impairment Charges for Other Intangible Assets—Unaudited

(dollars in millions)

 

		Year		Qtr. 4		Qtr. 3				Qtr. 2				Qtr. 1
Net Sales:
-  Cabinets and Related Products						$	307			$	330			$	307
-  Plumbing Products							768				761				710
-  Installation and Other Services							315				294				254
-  Decorative Architectural Products							455				492				375
-  Other Specialty Products							161				145				126
-  Total						$	2,006			$	2,022			$	1,772
-  North America						$	1,524			$	1,563			$	1,333
-  International, principally Europe							482				459				439
-  Total, as above						$	2,006			$	2,022			$	1,772
Operating (Loss) Profit:
-  Cabinets and Related Products						$	(27	)		$	(21	)		$	(29	)
-  Plumbing Products							92				100				90
-  Installation and Other Services							(18	)			(24	)			(38	)
-  Decorative Architectural Products							88				90				70
-  Other Specialty Products							14				—				(10	)
-  Total						$	149			$	145			$	83
-  North America						$	98			$	100			$	41
-  International, principally Europe							51				45				42
-  Total, as above						$	149			$	145			$	83
General Corporate Expense (GCE), Net							26				34				30
Charge for Litigation Settlement							1				5				—
Operating Profit (after GCE and Adjustments)							122				106				53
Other Income (Expense), Net							(41	)			(33	)			(42	)
Income before Income Taxes						$	81			$	73			$	11
Margins:
-  Cabinets and Related Products							-8.8	%			-6.4	%			-9.4	%
-  Plumbing Products							12.0	%			13.1	%			12.7	%
-  Installation and Other Services							-5.7	%			-8.2	%			-15.0	%
-  Decorative Architectural Products							19.3	%			18.3	%			18.7	%
-  Other Specialty Products							8.7	%			0.0	%			-7.9	%
-  Total							7.4	%			7.2	%			4.7	%
-  North America							6.4	%			6.4	%			3.1	%
-  International, principally Europe							10.6	%			9.8	%			9.6	%
-  Total, as above							7.4	%			7.2	%			4.7	%

   Notes:

-  Data exclude discontinued operations.

-  Operating (loss) profit and margins by segment and geographic area are before general corporate expense.

-  See 2011 Costs and Charges for Business Rationalizations and Other Initiatives—page 5.

 

Page 3

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MASCO CORPORATION

Quarterly Segment Data—2011

Including Costs and Charges for Business Rationalizations and Other Initiatives

and Impairment Charges for Other Intangible Assets—Unaudited

(dollars in millions)

 

		Year		Qtr. 4		Qtr. 3				Qtr. 2				Qtr. 1
Net Sales:
-  Cabinets and Related Products						$	307			$	330			$	307
-  Plumbing Products							768				761				710
-  Installation and Other Services							315				294				254
-  Decorative Architectural Products							455				492				375
-  Other Specialty Products							161				145				126
-  Total						$	2,006			$	2,022			$	1,772
-  North America						$	1,524			$	1,563			$	1,333
-  International, principally Europe							482				459				439
-  Total, as above						$	2,006			$	2,022			$	1,772
Operating (Loss) Profit:
-  Cabinets and Related Products						$	(34	)		$	(27	)		$	(50	)
-  Plumbing Products							91				95				84
-  Installation and Other Services							(27	)			(26	)			(40	)
-  Decorative Architectural Products							88				90				69
-  Other Specialty Products							12				—				(10	)
-  Total						$	130			$	132			$	53
-  North America						$	80			$	87			$	11
-  International, principally Europe							50				45				42
-  Total, as above						$	130			$	132			$	53
General Corporate Expense (GCE), Net							27				36				32
Charge for Litigation Settlement							1				5				—
Operating Profit (after GCE and Adjustments)							102				91				21
Other Income (Expense), Net							(41	)			(33	)			(42	)
Income (Loss) before Income Taxes						$	61			$	58			$	(21	)
Margins:
-  Cabinets and Related Products							-11.1	%			-8.2	%			-16.3	%
-  Plumbing Products							11.8	%			12.5	%			11.8	%
-  Installation and Other Services							-8.6	%			-8.8	%			-15.7	%
-  Decorative Architectural Products							19.3	%			18.3	%			18.4	%
-  Other Specialty Products							7.5	%			0.0	%			-7.9	%
-  Total							6.5	%			6.5	%			3.0	%
-  North America							5.2	%			5.6	%			0.8	%
-  International, principally Europe							10.4	%			9.8	%			9.6	%
-  Total, as above							6.5	%			6.5	%			3.0	%

   Notes:

-  Data exclude discontinued operations.

-  Operating (loss) profit and margins by segment and geographic area are before general corporate expense.

-  See 2011 Costs and Charges for Business Rationalizations and Other Initiatives—page 5.

 

Page 4

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MASCO CORPORATION

Quarterly Segment Data—2011

Costs and Charges for Business Rationalizations and Other Initiatives

and Impairment Charges for Other Intangible Assets—Unaudited

(in millions)

 

		Year		Qtr. 4		Qtr. 3				Qtr. 2				Qtr. 1
Business Rationalizations & Other Initiatives
-  Cabinets and Related Products						$	7			$	6			$	21
-  Plumbing Products							1				5				6
-  Installation and Other Services							2				2				2
-  Decorative Architectural Products							—				—				1
-  Other Specialty Products							2				—				—
-  Total						$	12			$	13			$	30
-  North America						$	11			$	13			$	30
-  International, principally Europe							1				—				—
-  Total, as above						$	12			$	13			$	30
General Corporate Expense (GCE), Net							1				2				2
-  Total						$	13			$	15			$	32
Other Intangible Assets Impairment
-  Cabinets and Related Products						$	—			$	—			$	—
-  Plumbing Products							—				—				—
-  Installation and Other Services							7				—				—
-  Decorative Architectural Products							—				—				—
-  Other Specialty Products							—				—				—
-  Total						$	7			$	—			$	—
-  North America						$	7			$	—			$	—
-  International, principally Europe							—				—				—
-  Total, as above						$	7			$	—			$	—

Notes:

-	Data exclude discontinued operations.

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

 

Page 5

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MASCO CORPORATION

Quarterly Segment Data—2010

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		$	1,464			$	304			$	357			$	400			$	403
-  Plumbing Products			2,692				661				686				682				663
-  Installation and Other Services			1,147				273				292				309				273
-  Decorative Architectural Products			1,693				336				463				505				389
-  Other Specialty Products			596				161				159				152				124
-  Total		$	7,592			$	1,735			$	1,957			$	2,048			$	1,852
-  North America		$	5,929			$	1,312			$	1,528			$	1,659			$	1,430
-  International, principally Europe			1,663				423				429				389				422
-  Total, as above		$	7,592			$	1,735			$	1,957			$	2,048			$	1,852
Operating (Loss) Profit:
-  Cabinets and Related Products		$	(71	)		$	(46	)		$	(27	)		$	6			$	(4	)
-  Plumbing Products			347				70				100				92				85
-  Installation and Other Services			(106	)			(25	)			(20	)			(21	)			(40	)
-  Decorative Architectural Products			350				50				104				109				87
-  Other Specialty Products			19				3				11				11				(6	)
-  Total		$	539			$	52			$	168			$	197			$	122
-  North America		$	373			$	21			$	116			$	160			$	76
-  International, principally Europe			166				31				52				37				46
-  Total, as above		$	539			$	52			$	168			$	197			$	122
General Corporate Expense (GCE), Net			109				25				27				27				30
Operating Profit (after GCE and Adjustments)			430				27				141				170				92
Other Income (Expense), Net			(278	)			(55	)			(64	)			(103	)			(56	)
(Loss) Income before Income Taxes		$	152			$	(28	)		$	77			$	67			$	36
Margins:
-  Cabinets and Related Products			-4.8	%			-15.1	%			-7.6	%			1.5	%			-1.0	%
-  Plumbing Products			12.9	%			10.6	%			14.6	%			13.5	%			12.8	%
-  Installation and Other Services			-9.2	%			-9.2	%			-6.8	%			-6.8	%			-14.7	%
-  Decorative Architectural Products			20.7	%			14.9	%			22.5	%			21.6	%			22.4	%
-  Other Specialty Products			3.2	%			1.9	%			6.9	%			7.2	%			-4.8	%
-  Total			7.1	%			3.0	%			8.6	%			9.6	%			6.6	%
-  North America			6.3	%			1.6	%			7.6	%			9.6	%			5.3	%
-  International, principally Europe			10.0	%			7.3	%			12.1	%			9.5	%			10.9	%
-  Total, as above			7.1	%			3.0	%			8.6	%			9.6	%			6.6	%

   Notes:

-  Data exclude discontinued operations.

-  Operating (loss) profit and margins by segment and geographic area are before general corporate expense.

-  See 2010 Costs and Charges for Business Rationalizations and Other Initiatives—page 8.

 

Page 6

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MASCO CORPORATION

Quarterly Segment Data—2010

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		$	1,464			$	304			$	357			$	400			$	403
-  Plumbing Products			2,692				661				686				682				663
-  Installation and Other Services			1,147				273				292				309				273
-  Decorative Architectural Products			1,693				336				463				505				389
-  Other Specialty Products			596				161				159				152				124
-  Total		$	7,592			$	1,735			$	1,957			$	2,048			$	1,852
-  North America		$	5,929			$	1,312			$	1,528			$	1,659			$	1,430
-  International, principally Europe			1,663				423				429				389				422
-  Total, as above		$	7,592			$	1,735			$	1,957			$	2,048			$	1,852
Operating (Loss) Profit:
-  Cabinets and Related Products		$	(250	)		$	(137	)		$	(61	)		$	(37	)		$	(15	)
-  Plumbing Products			331				64				97				86				84
-  Installation and Other Services			(834	)			(747	)			(22	)			(23	)			(42	)
-  Decorative Architectural Products			345				45				104				109				87
-  Other Specialty Products			19				3				11				11				(6	)
-  Total		$	(389	)		$	(772	)		$	129			$	146			$	108
-  North America		$	(543	)		$	(800	)		$	79			$	114			$	64
-  International, principally Europe			154				28				50				32				44
-  Total, as above		$	(389	)		$	(772	)		$	129			$	146			$	108
General Corporate Expense (GCE), Net			110				26				27				27				30
Operating Profit (after GCE and Adjustments)			(499	)			(798	)			102				119				78
Other Income (Expense), Net			(278	)			(55	)			(64	)			(103	)			(56	)
(Loss) Income before Income Taxes		$	(777	)		$	(853	)		$	38			$	16			$	22
Margins:
-  Cabinets and Related Products			-17.1	%			-45.1	%			-17.1	%			-9.3	%			-3.7	%
-  Plumbing Products			12.3	%			9.7	%			14.1	%			12.6	%			12.7	%
-  Installation and Other Services			-72.7	%			-273.6	%			-7.5	%			-7.4	%			-15.4	%
-  Decorative Architectural Products			20.4	%			13.4	%			22.5	%			21.6	%			22.4	%
-  Other Specialty Products			3.2	%			1.9	%			6.9	%			7.2	%			-4.8	%
-  Total			-5.1	%			-44.5	%			6.6	%			7.1	%			5.8	%
-  North America			-9.2	%			-61.0	%			5.2	%			6.9	%			4.5	%
-  International, principally Europe			9.3	%			6.6	%			11.7	%			8.2	%			10.4	%
-  Total, as above			-5.1	%			-44.5	%			6.6	%			7.1	%			5.8	%

   Notes:

-  Data exclude discontinued operations.

-  Operating (loss) profit and margins by segment and geographic area are before general corporate expense.

-  See 2010 Costs and Charges for Business Rationalizations and Other Initiatives—page 8.

 

Page 7

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MASCO CORPORATION

Quarterly Segment Data—2010

Costs and Charges for Business Rationalizations and Other Initiatives

and Impairment Charges for Goodwill and Other Intangible Assets—Unaudited

(in millions)

 

		Year				Qtr. 4				Qtr. 3				Qtr. 2				Qtr. 1
Business Rationalizations & Other Initiatives
-  Cabinets and Related Products		$	179			$	91			$	34			$	43			$	11
-  Plumbing Products			15				5				3				6				1
-  Installation and Other Services			8				2				2				2				2
-  Decorative Architectural Products			5				5				—				—				—
-  Other Specialty Products			—				—				—				—				—
-  Total		$	207			$	103			$	39			$	51			$	14
-  North America		$	195			$	100			$	37			$	46			$	12
-  International, principally Europe			12				3				2				5				2
-  Total, as above		$	207			$	103			$	39			$	51			$	14
General Corporate Expense (GCE), Net			1				1				—				—				—
-  Total		$	208			$	104			$	39			$	51			$	14
Goodwill and Other Intangible Assets Impairment
-  Cabinets and Related Products		$	—			$	—			$	—			$	—			$	—
-  Plumbing Products			1				1				—				—				—
-  Installation and Other Services			720				720				—				—				—
-  Decorative Architectural Products			—				—				—				—				—
-  Other Specialty Products			—				—				—				—				—
-  Total		$	721			$	721			$	—			$	—			$	—
-  North America		$	721			$	721			$	—			$	—			$	—
-  International, principally Europe			—				—				—				—				—
-  Total, as above		$	721			$	721			$	—			$	—			$	—

Notes:

-	Data exclude discontinued operations.

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

 

Page 8

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MASCO CORPORATION

Other Income (Expense), Net

2011 & 2010—by Quarter—Unaudited

(in millions)

 

		2011																2010
		Year		Qtr. 4		Qtr. 3				Qtr. 2				Qtr. 1				Year				Qtr. 4				Qtr. 3				Qtr. 2				Qtr. 1
Interest Expense						$	(63	)		$	(64	)		$	(63	)		$	(251	)		$	(63	)		$	(63	)		$	(67	)		$	(58	)
Income from Cash and Cash Investments							2				1				2				6				2				2				1				1
Other Interest Income							1				—				—				1				—				—				—				1
Realized Gains (Losses) from Financial Investments, Net							19				33				17				9				11				(3	)			1				—
Impairment Charges for Financial Investments							—				—				—				(34	)			(1	)			—				(33	)			—
Other, Net							—				(3	)			2				(9	)			(4	)			—				(5	)			—
Total Other Income (Expense), Net						$	(41	)		$	(33	)		$	(42	)		$	(278	)		$	(55	)		$	(64	)		$	(103	)		$	(56	)

Notes:

-	Data exclude discontinued operations.

-	Other, Net, in 2011 includes currency gains (losses) of $2 million, $(3) million, and $1 million for the first, second, and third quarters, respectively.

-	Other, Net, in 2010 includes currency (losses) gains of ($1) million, ($5) million, $4 million and $—for the first, second, third and fourth quarters, respectively.

 

Page 9

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MASCO CORPORATION

Condensed Consolidated Balance Sheets—Unaudited

(in millions)

 

		September 30, 2011				December 31, 2010
Assets
Current Assets:
Cash and Cash Investments		$	1,610			$	1,715
Receivables			1,133				888
Inventories			850				732
Prepaid Expenses and Other			118				129
Total Current Assets			3,711				3,464
Property and Equipment, Net			1,656				1,737
Goodwill			2,387				2,383
Other Intangible Assets, Net			256				269
Other Assets			202				287
Total Assets		$	8,212			$	8,140
Liabilities
Current Liabilities:
Notes Payable		$	806			$	66
Accounts Payable			866				602
Accrued Liabilities			813				819
Total Current Liabilities			2,485				1,487
Long-Term Debt			3,224				4,032
Deferred Income Taxes and Other			1,016				1,039
Total Liabilities			6,725				6,558
Shareholders’ Equity			1,487				1,582
Total Liabilities and Shareholders’ Equity		$	8,212			$	8,140

 

Page 10

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MASCO CORPORATION

GAAP Reconciliation of Sales Growth

Excluding the Effect of Acquisitions and Currency Translation—Unaudited

(dollars in millions)

 

		Three Months Ended September 30,
		2011				2010				% D
Net Sales, As Reported		$	2,006			$	1,957				3	%
-  Acquisitions			—				—
-  Currency Translation			(40	)			—
Net Sales, Excluding Acquisitions and Currency Translation		$	1,966			$	1,957				0	%
North America Net Sales, As Reported		$	1,524			$	1,528				0	%
-  Acquisitions			—				—
-  Currency Translation			(3	)			—
North America Net Sales, Excluding Acquisitions and Currency Translation		$	1,521			$	1,528				0	%
International Net Sales, As Reported		$	482			$	429				12	%
-  Acquisitions			—				—
-  Currency Translation			(37	)			—
International Net Sales, Excluding Acquisitions and Currency Translation		$	445			$	429				4	%
		Nine Months Ended September 30,
		2011				2010				% D
As Reported		$	5,800			$	5,857				-1	%
-  Acquisitions			—				—
-  Currency Translation			(94	)			—
Net Sales, Excluding Acquisitions and Currency Translation		$	5,706			$	5,857				-3	%
North America Net Sales, As Reported		$	4,420			$	4,617				-4	%
-  Acquisitions			—				—
-  Currency Translation			(10	)			—
North America Net Sales, Excluding Acquisitions and Currency Translation		$	4,410			$	4,617				-4	%
International Net Sales, As Reported		$	1,380			$	1,240				11	%
-  Acquisitions			—				—
-  Currency Translation			(84	)			—
International Net Sales, Excluding Acquisitions and Currency Translation		$	1,296			$	1,240				5	%

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 impacting growth.

-

The Company also presents information comparing results of International operations from one period to another using constant exchange rates. 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 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

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MASCO CORPORATION

GAAP Reconciliation of Operating Profit and Margins—Unaudited

(dollars in millions)

 

		Three Months Ended September 30,
		2011								2010
		$				Margin				$				Margin
Operating Profit, As Reported		$	102				5.1	%		$	102				5.2	%
Business Rationalizations and Other Initiatives			13								39
Impairment Charges for Intangible Assets			7								—
Charge for Litigation Settlement			1								—
Operating Profit, As Reconciled		$	123				6.1	%		$	141				7.2	%

 

		Nine Months Ended September 30,
		2011								2010
		$				Margin				$				Margin
Operating (Loss) Profit, As Reported		$	214				3.7	%		$	299				5.1	%
Business Rationalizations and Other Initiatives			60								104
Impairment Charges for Intangible Assets			7								—
Charge for Litigation Settlement, after tax			6								—
Operating Profit, As Reconciled		$	287				4.9	%		$	403				6.9	%

Notes:

-	Data exclude discontinued operations.

-

The Company believes that certain non-GAAP performance measures and ratios used in managing the business may provide 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