Third Quarter 2014 Earnings Presentation

MASCO CORPORATION

October 28, 2014

Safe Harbor Statement

Statements contained in this presentation 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 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 presentation speak only as of the date of this presentation. 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.

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Masco Q3 2014 Results

Topic

• Summary of Results Keith Allman

• Financial/Operations Review John Sznewajs

• Outlook Keith Allman

• Q&A

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Key Messages Today

New products and programs continue to drive top-line growth

Strong execution results in record sales for Delta and Hansgrohe

Margin expansion driven by consistent execution and strong operating leverage

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Masco Q3 2014 Results

Topic

• Summary of Results Keith Allman

• Financial/Operations Review John Sznewajs

• Outlook Keith Allman

• Q&A

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6

Another Quarter of Sales and Profit Growth

*See Appendix for GAAP reconciliation.

Quarter Highlights

• Consistent quarter of top- and bottom-line growth

• Q3 2013 revenue growth was 12%

• North American sales increased 4%; international sales increased 3% in local currency

($ in Millions)Third Quarter

2014

Revenue Change

$2,232 4%

Adjusted Operating Profit* Y-O-Y Change

$2439%

Adjusted Operating Margin* Y-O-Y Change

10.9%60 bps

Adjusted EPS* $0.31

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Focused Execution Fuels Operating Margin Expansion

* Please note dollars are in millions. See appendix for GAAP reconciliation.

Q3 2013 Op-erating Profit*

Net Volume / Mix

Net Price / Commodity

Net Total Cost Productivity

Q3 2014 Op-erating Profit*

$222

$229

$240 $243 $243

Y-O-Y Change inOperating Profit $21M

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P LU M B I N G P R O D U C T S

Wholesale/Trade Drives Growth

*Excluding business rationalization charges of $6 million in the third quarter of 2013. See appendix for GAAP reconciliation.

($ in Millions)Third Quarter

2014

Revenue Change

$855 4%

Operating ProfitY-O-Y Change*

$14114%

Operating MarginY-O-Y Change*

16.5%140 bps

Quarter Highlights

• Continued strength of wholesale/trade sales by Delta® and Brizo® brands and spas drives North America revenue growth

• International sales up 2% in local currency despite soft economic conditions

• Margin expansion driven by improved mix and lean initiatives

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D E C O RAT I V E A RC H I T E C T U RA L P R O D U C T S

New Products Continue to Gain Traction

($ in Millions)Third Quarter

2014

Revenue Change

$523 --%

Operating ProfitY-O-Y Change

$91(2%)

Operating MarginY-O-Y Change

17.4%(40) bps

Quarter Highlights

• Challenging comparison to Q3 2013 when revenue growth was 9% due to strong product introductions

• Continued growth from Behr Pro®, Behr Marquee® and builders’ hardware introductions

• Sales impacted by timing of inventory replenishment

• Margins impacted by growth investments and mix

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C A B I N E T S A N D R E L AT E D P R O D U C T S

Executing Revenue and Profit Initiatives to Drive Performance

*Excluding business rationalization charges of $28 million and $3 million in the third quarters of 2014 and 2013, respectively. See appendix for GAAP reconciliation.

($ in Millions)Third Quarter

2014

Revenue Change

$266 2%

Adjusted Operating Loss* Y-O-Y Change

($7)(N/M)

Adjusted Operating Margin* Y-O-Y Change

(2.6%)(300) bps

Quarter Highlights• Sales growth in dealer channel offset by lower sales at home centers• Restored Merillat® lead times• Incremental and other one-time costs of ~$8 million in Q3 related to ERP

associated inefficiencies• Incurred rationalization charges of $28 million associated with the closure

of two mothballed facilities

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I N S TA L L AT I O N A N D O T H E R S E RV I C E S

Capitalizing on New Construction and Commercial Growth

($ in Millions)Third Quarter

2014

Revenue Change

$398 8%

Operating ProfitY-O-Y Change*

$205%

Operating MarginY-O-Y Change*

5.0%(10) bps

Quarter Highlights

• Sales growth driven by improvement in new home construction, commercial, retrofit and distribution channels

• Profitability growth driven by increased volume

• Margins impacted by $4 million of medical and benefit costs

*Excluding business rationalization charges of $1 million in the third quarter of 2013. See appendix for GAAP reconciliation.

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O T H E R S P E C I A LT Y P R O D U C T S

Positive Repair and Remodel Mix Sales Drives Growth

($ in Millions)Third Quarter

2014

Revenue Change

$190 8%

Operating ProfitY-O-Y Change

$2025%

Operating MarginY-O-Y Change

10.5%140 bps

Quarter Highlights

• Higher mix of repair and remodel activity drives sales and profit

• Continued momentum in international windows

Strong Balance Sheet

Balance Sheet Liquidity as of 9/30/2014

Cash and cash investments $1.3B

Short-term bank deposits $0.3B

Total $1.6B

Q3 2014 Accomplishments

• As a result of the continued profitability of U.S. operations, a $466 million ($1.32 per share) net tax benefit was recorded primarily due to the release of the valuation allowance

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Masco Q3 2014 Results

Topic

• Summary of Results Keith Allman

• Financial/Operations Review John Sznewajs

• Outlook Keith Allman

• Q&A

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I N S U M M A RY

Driving Improved Performance

● Maintain focus on continued strong operating leverage and free cash flow generation

● Position Cabinet business for improved performance

● Execute capital allocation strategy with a strengthened balance sheet

● Continue to drive strategic priorities

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ImprovedPerformance

Q&A

Appendix

Appendix – Profit Reconciliation – Third Quarter

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($ in Millions) Q3 2014   Q3 2013

       

Sales $ 2,232   $ 2,150

       

Gross Profit – As Reported $ 611   $ 607

       

Rationalization charges 28   6

       

Gross Profit – As Adjusted $ 639   $ 613

       

Gross Margin - As Reported 27.4%   28.2%

Gross Margin - As Adjusted 28.6%   28.5%

       

Operating Profit – As Reported $ 202   $ 212

       Rationalization charges 41   10        

Operating Profit – As Adjusted $ 243   $ 222

       

Operating Margin - As Reported 9.1%   9.9%

Operating Margin - As Adjusted 10.9%   10.3%

Appendix – EPS Reconciliation – Third Quarter

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(in Millions, Except per Common Share Data) Q3 2014   Q3 2013

       

Income from Continuing Operations before Income Taxes – As Reported $ 152   $ 160

Rationalization charges 41   10

Gains from financial investments, net -   -

Earnings from equity investments, net -   (6)

       

Income from Continuing Operations before Income Taxes – As Adjusted $ 193   $ 164

Tax at 36% rate (69)   (59)

Less: Net income attributable to non-controlling interest 13   11

       

Net Income, as Adjusted $ 111   $ 94

       

Income per Common Share, as Adjusted $ 0.31   $ 0.27

       

Average Diluted Shares Outstanding 353   352

($ in Millions) 2014 Estimate 2013 Actual

Rationalization Charges1,

3

~ $58 $48

Tax Rate4 ~ 36% 26%

Interest Expense ~ $225 $235

General Corp. Expense2 ~ $140 $134

Capital Expenditures ~ $125 $126

Depreciation & Amortization3

~ $170 $186

Shares Outstanding5 353 million 352 million

2014 Guidance Estimates

1. Based on 2014 business plans.

2. Includes rationalization expenses of $20M and $3M for the years ended December 31, 2014 and 2013, respectively.

3. Includes accelerated depreciation of $13M for the year ended December 31, 2013 and estimated accelerated depreciation for the year ended December 31, 2014 of ~$29M. Such expenses are also included in the rationalization charges.

4. Excludes $517 million release of the valuation allowance in the third quarter 2014.

5. 2014 shares outstanding does not reflect potential Q4 2014 share repurchases.

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2013 Segment Mix*

R&R = % of sales to repair and remodel channelsNC = % of sales to new construction channels NA = % of sales within North AmericaInt’l = % of sales outside North America *Based on Company estimates.

Business Segment

PlumbingProducts

Installation andOther Services

DecorativeArchitecturalProducts

$3.2B

$1.4B

$1.9B

Revenue 2013 % of Total

39%

23%

17%

$8.2B 100%Total Company

Other SpecialtyProducts $0.7B 9%

R&R% vs. NC NA% vs. Int’l

82% 59%

99% 100%

18% 100%

74% 76%

72% 81%

Cabinets andRelated Products $1.0B 12% 57% 93%

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2013 International Revenue Split*

*Based on Company estimates.

International Sales Accounted for ~20% of Total 2013 Masco Sales

23%

7%

6%

31%

9%

14%

10%

UKNorthern EuropeSouthern EuropeCentral EuropeEastern EuropeEmerging marketsOther

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