Masco (MAS) 8-K Masco Corporation Reports Third Quarter Results and Increases Full-year Guidance

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 atwww.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 TTM1)		17.3	%		17.6	%		30	)bps

Other	9/30/2009			9/30/2008
Dividend Payments	$	139		$	251
Cash Paid for Share Repurchases2	$	11		$	160
Common Shares Repurchased2		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’ Equity3	$	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

Page 14