Masco (MAS) 8-K Masco Corporation Reports Second Quarter Results

FOR IMMEDIATE RELEASE

Investor / Media Contact
Maria Duey
Vice President — Investor Relations and Communications
313.792.5500
maria_duey@mascohq.com

MASCO CORPORATION REPORTS SECOND QUARTER RESULTS

     2010 Second Quarter Commentary

• Sales increased two percent to $2.0 billion.

• Operating performance improved in the second quarter of 2010. Excluding charges for business rationalizations and the impairment of financial assets, and with a normalized tax rate of 36 percent, our key financial measures were as follows, compared to the second quarter of 2009:

• Gross profit margins were 28.4 percent compared to 27.4 percent

• Operating profit margins were 8.3 percent compared to 7.3 percent

• Income, as adjusted, would have been $.16 per common share compared to $.17

• Income from continuing operations, as reported, was $.01 per common share compared to $.19 per common share in the second quarter of 2009.

• We retired $59 million of 5.875 percent debt due 2012.

• We entered into a new $1.25 billion revolving credit facility that expires in January 2014 (which replaced the previous credit agreement).

• Our working capital, as a percent of sales, was 16.1 percent at June 30, 2010 compared to 17.8 percent at June 30, 2009.

• We had $1.4 billion of cash at June 30, 2010.

Taylor, Mich., (July 26, 2010) —Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the quarter ended June 30, 2010 increased two percent to $2.0 billion. North American sales and International sales each increased two percent. In local currencies, International sales increased eight percent compared with the second quarter of 2009.

The second quarter of 2010 results were positively affected by increased sales volume of plumbing products, windows and paints and stains, and a more favorable product mix of paints and stains. Second quarter 2010 results were also positively affected by the benefits associated with business rationalizations and other cost savings initiatives. Such increases were partially offset by lower sales volume of cabinets and the negative impact of a competitive pricing environment.

Income from continuing operations, as reported, was $.01 per common share in the second quarter of 2010 compared to income from continuing operations of $.19 per common share in the second quarter of 2009.

1

We continue to focus on the rationalization of our businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the second quarters of 2010 and 2009, we incurred costs and charges of $51 million pre-tax ($.09 per common share, after tax) and $22 million pre-tax ($.04 per common share, after tax), respectively, related to these initiatives.

During the second quarter of 2010, we also recognized non-cash, pre-tax impairment charges for financial investments aggregating $33 million ($.06 per common share, after tax). During the second quarter of 2009, we recognized non-cash, pre-tax impairment charges for financial investments aggregating $7 million ($.01 per common share, after tax).

“We had a solid second quarter in terms of operating performance,” said Masco’s CEO Tim Wadhams. “If we exclude charges for business rationalizations and financial assets, and normalize our tax rate at 36 percent, many of our key measures show nice improvement compared to second quarter of 2009. Gross margins and operating margins would have exceeded 28 percent and eight percent, respectively, the highest levels achieved on an adjusted basis, since 2008. In addition, EPS for second quarter of 2010, adjusted for the items above, would have approximated $.16 per common share. Second quarter of 2010 also includes additional interest expense and a change in currency transaction impact from gains to losses which, in aggregate, reduced earnings by $.05 per common share compared to second quarter of 2009. Innovative new products drove market share gains and we continued to drive strong incremental margins in the quarter. We are proud of the Masco Team, worldwide, as we continue to focus on strengthening our leadership brands and enhancing customer experience with our products and services through innovation and quality while continuing to drive lean principles to improve our execution,” said Tim Wadhams.

We retired $59 million of 5.875 percent debt due 2012 that was purchased in open-market transactions.

Outlook 2010

“After a relatively slow start to the year, we were encouraged that March and April 2010 sales were up high single digits compared to 2009. Since then, economic activity related to our markets, particularly consumer spending and new home building has slowed and our business has slowed,” said Tim Wadhams.

Although we continue to be concerned about foreclosure activity and access to financing, we believe that housing starts will improve in 2010 from 554,000 units in 2009, but currently believe that the increase will be in a range of 575,000 to 625,000 units. This is a reduction of our previous expectation that 2010 housing starts would increase to a range of 600,000 to 700,000 units. In addition, we anticipate that expenditures on repair and remodel activity will be challenged in the second half of 2010 and expect that big-ticket items will continue to be deferred, in the short-term, until general economic conditions, unemployment, consumer confidence, credit availability and home prices improve.

2

We are confident that the long-term fundamentals for the new home construction and home improvement markets are positive. We believe that our strong financial position, together with our current strategy of investing in leadership brands (including: KraftMaid and Merillat cabinets, Delta and Hansgrohe faucets, Behr paint and Milgard windows), our continued focus on innovation and our commitment to lean principles will allow us 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 2010 second quarter supplemental material, including a presentation in PDF format, will be distributed after the market closes on July 26, 2010 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, July 27, 2010 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) 312-0705 (confirmation #1803847). 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 #1803847) approximately two hours after the end of the call and will continue through August 3, 2010.

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. See the exhibit that is included as part of this earnings release for a reconciliation of the non-GAAP performance measures contained herein. 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 Six Months Ended June 30, 2010 and 2009
(In Millions, Except Per Common Share Data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Net sales	$	2,048		$	2,013		$	3,900		$	3,810
Cost of sales		1,502			1,470			2,862			2,854
Gross profit		546			543			1,038			956
Selling, general and administrative expenses		427			427			841			834
Charge for defined-benefit plan curtailment		—			—			—			8
Operating profit		119			116			197			114
Other income (expense), net		(103	)		(49	)		(159	)		(108	)
Income from continuing operations before income taxes		16			67			38			6
Income tax expense (benefit)		4			(8	)		22			9
Income (loss) from continuing operations		12			75			16			(3	)
Loss from discontinued operations, net		—			(12	)		—			(8	)
Net income (loss)		12			63			16			(11	)
Less: Net income attributable to non-controlling interest		9			8			20			15
Net income (loss) attributable to Masco Corporation	$	3		$	55		$	(4	)	$	(26	)
Earnings (loss) per common share attributable to Masco Corporation (diluted):
Income (loss) from continuing operations	$	0.01		$	0.19		$	(0.02	)	$	(0.06	)
Loss from discontinued operations, net		—			(0.03	)		—			(0.02	)
Net income (loss) attributable to Masco Corporation	$	0.01		$	0.15		$	(0.02	)	$	(0.08	)
Average diluted common shares outstanding		349			350			349			351
Amounts attributable to Masco Corporation:
Income (loss) from continuing operations	$	3		$	67		$	(4	)	$	(18	)
Loss from discontinued operations, net		—			(12	)		—			(8	)
Net income (loss) attributable to Masco Corporation	$	3		$	55		$	(4	)	$	(26	)

Page 1

MASCO CORPORATION
Gross Profit Margin and Operating Profit Margin Reconciliation
For the Three Months Ended June 30, 2010 and 2009
(In Millions, Except Per Common Share Data)

	Three Months Ended
	June 30,
	2010			2009
Sales	$	2,048		$	2,013
Gross profit, as reported	$	546		$	543
Rationalization charges		36			9
Gross profit, as adjusted	$	582		$	552
Gross margin, as reported		26.7	%		27.0	%
Gross margin, as adjusted		28.4	%		27.4	%
Operating profit, as reported	$	119		$	116
Rationalization charges		51			22
One-time corporate charges					8
Operating profit, as adjusted	$	170		$	146
Operating margin, as reported		5.8	%		5.8	%
Operating margin, as adjusted		8.3	%		7.3	%

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 2

MASCO CORPORATION
EPS Reconciliation
For the Three Months Ended June 30, 2010 and 2009
(In Millions, Except Per Common Share Data)

	Three Months Ended
	June 30,
	2010			2009
Income from continuing operations before income taxes	$	16		$	67
Rationalization charges		51			22
One-time corporate charges		—			8
Impairment of Financial Investments		33			7
Income from continuing operations before income taxes — as adjusted		100			104
Tax at 36% rate		(36	)		(37	)
Less: Net income attributable to non-controlling interest		(9	)		(8	)
Net Income — as adjusted	$	55		$	59
Earnings per common share — as adjusted	$	0.16	(1)	$	0.17
Shares outstanding		349			350

⁽¹⁾ 2Q 2010 EPS includes increased interest expense and currency losses compared to 2Q 2009 interest expense and currency gains.

	2010			2009		Change
Interest expense	$	67		$	57	$	(10	)
Currency (losses) gains		(5	)		11		(16	)
Total							(26	)
Tax at 36% normalized rate							9
Impact on 2010 versus 2009						$	(17	)
Reduction in EPS 2Q-2010 compared to 2Q-2009						$	(0.05	)

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 3

Masco Corporation
Key Financial Data As Reported — Unaudited
Q2 — 2010 and 2009(In Millions, Except Earnings Per Share)

Sales & Earnings	6/30/2010			6/30/2009			Change
Net Sales	$	2,048		$	2,013			2	%
Operating Profit	$	119		$	116			N/A
Operating Profit % of Net Sales		5.8	%		5.8	%		—		bps
Other Income (Expense), Net	$	(103	)	$	(49	)	$	(54	)
Income Tax Expense (Benefit)	$	4		$	(8	)		N/A
Income From Continuing Operations Attributable to Masco Corporation	$	3		$	67			N/A
Diluted EPS from Continuing Operations	$	0.01		$	0.19			N/A

Operating Expenses	6/30/2010			6/30/2009			Change
Cost of Sales	$	1,502		$	1,470		$	32
Gross Margin		26.7	%		27.0	%		(30	)	bps
SG&A Expenses (Including GCE)	$	427		$	427		$	—
SG&A as a % of net sales		20.8	%		21.2	%		40		bps
General Corporate Expense (GCE)	$	27		$	27		$	—
General Corp Expense as a % of net sales		1.3	%		1.3	%		—		bps

Business Segments	6/30/2010			6/30/2009			Change
Cabinets and Related Products:
Net Sales	$	400		$	419			-5	%
Operating (Loss)	$	(37	)	$	(12	)		N/A
Operating (Loss) % of Net Sales		-9.3	%		-2.9	%		(640	)	bps
Plumbing Products:
Net Sales	$	682		$	631			8	%
Operating Profit	$	86		$	74			N/A
Operating Profit % of Net Sales		12.6	%		11.7	%		90		bps
Installation and Other Services:
Net Sales	$	309		$	312			-1	%
Operating (Loss)	$	(23	)	$	(34	)		N/A
Operating (Loss) % of Net Sales		-7.4	%		-10.9	%		350		bps
Decorative Architectural Products:
Net Sales	$	505		$	505			0	%
Operating Profit	$	109		$	116			N/A
Operating Profit % of Net Sales		21.6	%		23.0	%		(140	)	bps
Other Specialty Products:
Net Sales	$	152		$	146			4	%
Operating Profit	$	11		$	7			N/A
Operating Profit % of Net Sales		7.2	%		4.8	%		240		bps
Total Segment Reported:
Net Sales	$	2,048		$	2,013			2	%
Operating Profit	$	146		$	151			N/A
Operating Profit % of Net Sales		7.1	%		7.5	%		(40	)	bps
Change in Key Retailer Sales		0	%		-7	%

Page 4

Masco Corporation
Key Financial Data As Reported — Unaudited
Q2 — 2010 and 2009(In Millions, Except Earnings Per Share)

Business Regions	6/30/2010			6/30/2009			Change
North America
Net Sales	$	1,659		$	1,630			2	%
Operating Profit	$	114		$	119			N/A
Operating Profit % of Net Sales		6.9	%		7.3	%		(40	)	bps
International, principally Europe
Net Sales	$	389		$	383			2	%
Operating Profit	$	32		$	32			N/A
Operating Profit % of Net Sales		8.2	%		8.4	%		(20	)	bps
Other	6/30/2010			6/30/2009
Dividend Payments	$	27		$	27
Cash Paid for Share Repurchases	$	—		$	—
Common Shares Repurchased		—			—
CAPEX	$	36		$	23
Depreciation and Amortization	$	77		$	66
Average diluted common shares outstanding		349			350

Page 5

Masco Corporation
Key Financial Data As Reported — Unaudited
Year-to-Date June 30, 2010 and 2009(In Millions, Except Earnings Per Share and Working Capital Days)

Sales & Earnings	6/30/2010				6/30/2009			Change
Net Sales	$	3,900			$	3,810			2	%
Operating Profit	$	197			$	114			N/A
Operating Profit % of Net Sales		5.1	%			3.0	%		210		bps
Other Income (Expense), Net	$	(159	)	��	$	(108	)	$	(51	)
Income Tax Expense	$	22			$	9			N/A
(Loss) From Continuing Operations Attributable to Masco Corporation	$	(4	)		$	(18	)		N/A
Diluted EPS from Continuing Operations	$	(0.02	)		$	(0.06	)		N/A

Operating Expenses	6/30/2010			6/30/2009			Change
Cost of Sales	$	2,862		$	2,854		$	8
Gross Margin		26.6	%		25.1	%		150		bps
SG&A Expenses (Including GCE)	$	841		$	842		$	(1	)
SG&A as a % of net sales		21.6	%		22.1	%		50		bps
General Corporate Expense (GCE)	$	57		$	60		$	(3	)
General Corp Expense as a % of net sales		1.5	%		1.6	%		(10	)	bps

Business Segments	6/30/2010			6/30/2009			Change
Cabinets and Related Products:
Net Sales	$	803		$	814			-1	%
Operating (Loss)	$	(52	)	$	(40	)		N/A
Operating (Loss) % of Net Sales		-6.5	%		-4.9	%		(160	)	bps
Plumbing Products:
Net Sales	$	1,345		$	1,215			11	%
Operating Profit	$	170		$	109			N/A
Operating Profit % of Net Sales		12.6	%		9.0	%		360		bps
Installation and Other Services:
Net Sales	$	582		$	629			-7	%
Operating (Loss)	$	(65	)	$	(70	)		N/A
Operating (Loss) % of Net Sales		-11.2	%		-11.1	%		(10	)	bps
Decorative Architectural Products:
Net Sales	$	894		$	891			0	%
Operating Profit	$	196		$	191			N/A
Operating Profit % of Net Sales		21.9	%		21.4	%		50		bps
Other Specialty Products:
Net Sales	$	276		$	261			6	%
Operating Profit	$	5		$	—			N/A
Operating Profit % of Net Sales		1.8	%		0.0	%		180		bps
Total Segment Reported:
Net Sales	$	3,900		$	3,810			2	%
Operating Profit	$	254		$	190			N/A
Operating Profit % of Net Sales		6.5	%		5.0	%		150		bps
Change in Key Retailer Sales		1	%		-9	%

Page 6

Masco Corporation
Key Financial Data As Reported — Unaudited
Year-to-Date June 30, 2010 and 2009(In Millions, Except Earnings Per Share and Working Capital Days)

Business Regions	6/30/2010			6/30/2009			Change
North America
Net Sales	$	3,089		$	3,064			1	%
Operating Profit	$	178		$	138			N/A
Operating Profit % of Net Sales		5.8	%		4.5	%		130		bps
International, principally Europe
Net Sales	$	811		$	746			9	%
Operating Profit	$	76		$	52			N/A
Operating Profit % of Net Sales		9.4	%		7.0	%		240		bps

Working Capital	6/30/2010			6/30/2009			Change
Receivable Days		50			52			(2	)
Inventory Days		55			52			3
Payable Days		51			46			5
Working Capital (Receivables+Inventory-Payables)	$	1,268		$	1,485		$	(217	)
Working Capital as a % of Sales (As Reported TTM1)		16.1	%		17.8	%		170		bps
Other	6/30/2010			6/30/2009
Dividend Payments	$	54		$	112
Cash Paid for Share Repurchases2	$	45		$	11
Common Shares Repurchased2		3			2
CAPEX	$	62		$	50
Depreciation and Amortization	$	137		$	128
Return on Invested Capital (As Reported TTM1)		1.6	%		-1.9	%
Return on Invested Capital (As Reconciled TTM1)		4.5	%		2.8	%
Average diluted common shares outstanding		349			351
Balance Sheet Information	6/30/2010			12/31/2009
Long-Term Debt	$	4,038		$	3,604
Notes Payable	$	66		$	364
Total Debt	$	4,104		$	3,968
Shareholders’ Equity	$	2,608		$	2,817
Debt to Capital		61	%		58	%
Cash	$	1,384		$	1,413

1	- Trailing twelve months.
2	- Common shares were repurchased to offset the effect of stock award grants in the first quarters of 2010 and 2009.

Page 7

Masco Corporation — 2nd Quarter 2010

Page
1	Condensed Consolidated Statements of Operations - 2010 & 2009 by Quarter - Unaudited
2	Notes to Condensed Consolidated Statements of Operations - 2010 & 2009 by Quarter - Unaudited
3	2010 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives - Unaudited
4	2010 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives - Unaudited
5	2010 Costs and Charges for Business Rationalizations and Other Initiatives - Unaudited
6	2009 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited
7	2009 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited
8	2009 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets - Unaudited
9	Other Income (Expense), Net - 2010 & 2009 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 (Loss) and Margins - Unaudited
13	Operating (Loss) Profit and Shareholders’ Equity - Unaudited

Index

MASCO CORPORATION
Condensed Consolidated Statements of Operations
2010 & 2009 — by Quarter — Unaudited
(dollars in millions, except per share data)

		2010									2009
		Year	Qtr. 4	Qtr. 3	Qtr. 2			Qtr. 1			Year			Qtr. 4			Qtr. 3			Qtr. 2			Qtr. 1
	Net Sales				$	2,048		$	1,852		$	7,792		$	1,898		$	2,084		$	2,013		$	1,797
	Cost of Sales					1,502			1,360			5,774			1,403			1,517			1,470			1,384
	Gross Profit					546			492			2,018			495			567			543			413
	(Gross Margin as a % of Sales)					26.7	%		26.6	%		25.9	%		26.1	%		27.2	%		27.0	%		23.0	%
	SG&A Expense (before lines 1, 2, 3, 4)					400			384			1,546			386			386			400			374
	(S,G&A Expense as a % of Sales)					19.5	%		20.7	%		19.8	%		20.3	%		18.5	%		19.9	%		20.8	%
	Operating Profit (before lines 1, 2, 3, 4)					146			108			472			109			181			143			39
	(Operating Margin as a % of Sales)								5.8	%		6.1	%		5.7	%		8.7	%		7.1	%		2.2	%
1	General Corporate Expense (GCE), Net					27			30			140			44			36			27			33
	S,G&A Expense as a % of Sales (including lines 1,2,3,4)					20.8	%		22.4	%		25.2	%		36.5	%		20.6	%		21.2	%		23.1	%
2	Charge for Defined-Benefit Plan Curtailment					—			—			8			—			—			—			8
3	Charge for Litigation Settlement					—			—			7			—			7			—			—
4	Impairment Charges for Goodwill and Other Intangible Assets					—			—			262			262			—			—			—
	Operating Profit (Loss) per F/S				$	119		$	78		$	55		$	(197	)	$	138		$	116		$	(2	)
	(Loss) Income Per Common Share Attributable to Masco Corporation (Diluted):
	(Loss) Income from Continuing Operations				$	0.01		$	(0.02	)	$	(0.41	)	$	(0.49	)	$	0.14		$	0.19		$	(0.24	)
	(Loss) Income from Discontinued Operations, Net					—			—			(0.12	)		(0.03	)		(0.06	)		(0.03	)		0.01
	Net (Loss) Income				$	0.01		$	(0.02	)	$	(0.53	)	$	(0.53	)	$	0.08		$	0.15		$	(0.23	)
	Please see page 2 for Notes.

Page 1

MASCO CORPORATION
Notes To Condensed Consolidated Statements of Operations
2010 & 2009 — by Quarter — Unaudited

Notes:

- Data exclude discontinued operations.

- Operating results for the second quarter of 2010 include costs and charges related to business rationalizations and other initiatives of $51 million pre-tax ($.09 per common share, after tax).

- Operating results for the second quarter of 2010 include non-cash impairment charges for financial investments of $33 million pre-tax ($.06 per common share, after tax).

- Operating results for the first quarter of 2010 include costs and charges related to business rationalizations and other initiatives of $14 million pre-tax ($.03 per common share, after tax).

- Operating results for the fourth quarter of 2009 include non-cash impairment charges for goodwill and other intangible assets of $262 million pre-tax ($.51 per common share, after tax).

- Operating results for the first, second, third and fourth 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), $21 million pre-tax ($.04 per common share, after tax), and $27 million pre-tax ($.05 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 fourth quarter of 2009 include loss of $19 million pre-tax ($.04 per common share, after tax) on the disposition of a European business unit in the Plumbing Products segment.

- (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.

Page 2

MASCO CORPORATION
Quarterly Segment Data — 2010
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				$	400		$	403
- Plumbing Products					682			663
- Installation and Other Services					309			273
- Decorative Architectural Products					505			389
- Other Specialty Products					152			124
-Total				$	2,048		$	1,852
- North America				$	1,659		$	1,430
- International, principally Europe					389			422
-Total, as above				$	2,048		$	1,852
Operating (Loss) Profit:
- Cabinets and Related Products				$	6		$	(4	)
- Plumbing Products					92			85
- Installation and Other Services					(21	)		(40	)
- Decorative Architectural Products					109			87
- Other Specialty Products					11			(6	)
-Total				$	197		$	122
- North America				$	160		$	76
- International, principally Europe					37			46
-Total, as above				$	197		$	122
General Corporate Expense (GCE), Net					27			30
Loss on Corporate Fixed Assets, Net					—			—
Charge for Litigation Settlement					—			—
Operating Profit (after GCE and Adjustments)					170			92
Other Income (Expense), Net					(103	)		(56	)
Income from Continuing Operations before
Income Taxes				$	67		$	36
Margins:
- Cabinets and Related Products					1.5	%		-1.0	%
- Plumbing Products					13.5	%		12.8	%
- Installation and Other Services					-6.8	%		-14.7	%
- Decorative Architectural Products					21.6	%		22.4	%
- Other Specialty Products					7.2	%		-4.8	%
-Total					9.6	%		6.6	%
- North America					9.6	%		5.3	%
- International, principally Europe					9.5	%		10.9	%
-Total, as above					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 5.

Page 3

MASCO CORPORATION
Quarterly Segment Data — 2010
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				$	400		$	403
- Plumbing Products					682			663
- Installation and Other Services					309			273
- Decorative Architectural Products					505			389
- Other Specialty Products					152			124
-Total				$	2,048		$	1,852
- North America				$	1,659		$	1,430
- International, principally Europe					389			422
-Total, as above				$	2,048		$	1,852
Operating (Loss) Profit:
- Cabinets and Related Products				$	(37	)	$	(15	)
- Plumbing Products					86			84
- Installation and Other Services					(23	)		(42	)
- Decorative Architectural Products					109			87
- Other Specialty Products					11			(6	)
-Total				$	146		$	108
- North America				$	114		$	64
- International, principally Europe					32			44
-Total, as above				$	146		$	108
General Corporate Expense (GCE), Net					27			30
Loss on Corporate Fixed Assets, Net					—			—
Charge for Litigation Settlement					—			—
Operating Profit (after GCE and Adjustments)					119			78
Other Income (Expense), Net					(103	)		(56	)
Income from Continuing Operations before Income Taxes				$	16		$	22
Margins:
- Cabinets and Related Products					-9.3	%		-3.7	%
- Plumbing Products					12.6	%		12.7	%
- Installation and Other Services					-7.4	%		-15.4	%
- Decorative Architectural Products					21.6	%		22.4	%
- Other Specialty Products					7.2	%		-4.8	%
-Total					7.1	%		5.8	%
- North America					6.9	%		4.5	%
- International, principally Europe					8.2	%		10.4	%
-Total, as above					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 5.

Page 4

MASCO CORPORATION
Quarterly Segment Data — 2010
Costs and Charges for Business Rationalizations and Other Initiatives
(in millions)

	Year	Qtr. 4	Qtr. 3	Qtr. 2		Qtr. 1
Business Rationalizations & Other Initiatives
- Cabinets and Related Products				$	43	$	11
- Plumbing Products					6		1
- Installation and Other Services					2		2
- Decorative Architectural Products					—		—
- Other Specialty Products					—		—
-Total				$	51	$	14
- North America				$	46	$	12
- International, principally Europe					5		2
-Total, as above				$	51	$	14
General Corporate Expense (GCE), Net					—		—
-Total				$	51	$	14

	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

MASCO CORPORATION
Quarterly Segment Data — 2009
Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
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	$	1,674		$	426		$	434		$	419		$	395
- Plumbing Products		2,564			671			678			631			584
- Installation and Other Services		1,256			295			332			312			317
- Decorative Architectural Products		1,714			349			474			505			386
- Other Specialty Products		584			157			166			146			115
-Total	$	7,792		$	1,898		$	2,084		$	2,013		$	1,797
- North America	$	6,135		$	1,441		$	1,630		$	1,630		$	1,434
- International, principally Europe		1,657			457			454			383			363
-Total, as above	$	7,792		$	1,898		$	2,084		$	2,013		$	1,797
Operating (Loss) Profit:
- Cabinets and Related Products	$	(21	)	$	9		$	(9	)	$	(2	)	$	(19	)
- Plumbing Products		295			80			99			78			38
- Installation and Other Services		(107	)		(25	)		(27	)		(27	)		(28	)
- Decorative Architectural Products		376			62			123			116			75
- Other Specialty Products		27			8			16			8			(5	)
-Total	$	570		$	134		$	202		$	173		$	61
- North America	$	394		$	75		$	139		$	141		$	39
- International, principally Europe		176			59			63			32			22
-Total, as above	$	570		$	134		$	202		$	173		$	61
General Corporate Expense (GCE), Net		136			42			36			27			31
Accelerated Stock Compensation Expense		6			—			—			6			—
Loss on Corporate Fixed Assets, Net		2			—			—			2			—
Charge for Litigation Settlement		7			—			7			—			—
Charge for Defined-Benefit Plan Curtailment		8			—			—			—			8
Operating Profit (after GCE and Adjustments)		411			92			159			138			22
Other Income (Expense), Net		(206	)		(49	)		(49	)		(49	)		(59	)
Income (Loss) from Continuing Operations before Income Taxes	$	205		$	43		$	110		$	89		$	(37	)
Margins:
- Cabinets and Related Products		-1.3	%		2.1	%		-2.1	%		-0.5	%		-4.8	%
- Plumbing Products		11.5	%		11.9	%		14.6	%		12.4	%		6.5	%
- Installation and Other Services		-8.5	%		-8.5	%		-8.1	%		-8.7	%		-8.8	%
- Decorative Architectural Products		21.9	%		17.8	%		25.9	%		23.0	%		19.4	%
- Other Specialty Products		4.6	%		5.1	%		9.6	%		5.5	%		-4.3	%
-Total		7.3	%		7.1	%		9.7	%		8.6	%		3.4	%
- North America		6.4	%		5.2	%		8.5	%		8.7	%		2.7	%
- International, principally Europe		10.6	%		12.9	%		13.9	%		8.4	%		6.1	%
-Total, as above		7.3	%		7.1	%		9.7	%		8.6	%		3.4	%

	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 8.

Page 6

MASCO CORPORATION
Quarterly Segment Data — 2009
Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
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	$	1,674		$	426		$	434		$	419		$	395
- Plumbing Products		2,564			671			678			631			584
- Installation and Other Services		1,256			295			332			312			317
- Decorative Architectural Products		1,714			349			474			505			386
- Other Specialty Products		584			157			166			146			115
-Total	$	7,792		$	1,898		$	2,084		$	2,013		$	1,797
- North America	$	6,135		$	1,441		$	1,630		$	1,630		$	1,434
- International, principally Europe		1,657			457			454			383			363
-Total, as above	$	7,792		$	1,898		$	2,084		$	2,013		$	1,797
Operating (Loss) Profit:
- Cabinets and Related Products	$	(64	)	$	(8	)	$	(16	)	$	(12	)	$	(28	)
- Plumbing Products		237			35			93			74			35
- Installation and Other Services		(131	)		(27	)		(34	)		(34	)		(36	)
- Decorative Architectural Products		375			62			122			116			75
- Other Specialty Products		(199	)		(215	)		16			7			(7	)
-Total	$	218		$	(153	)	$	181		$	151		$	39
- North America	$	93		$	(168	)	$	123		$	119		$	19
- International, principally Europe		125			15			58			32			20
-Total, as above	$	218		$	(153	)	$	181		$	151		$	39
General Corporate Expense (GCE), Net		140			44			36			27			33
Accelerated Stock Compensation Expense		6			—			—			6			—
Loss on Corporate Fixed Assets, Net		2			—			—			2			—
Charge for Litigation Settlement		7			—			7			—			—
Charge for Defined-Benefit Plan Curtailment		8			—			—			—			8
Operating (Loss) Profit (after GCE and Adjustments)		55			(197	)		138			116			(2	)
Other Income (Expense), Net		(206	)		(49	)		(49	)		(49	)		(59	)
Income (Loss) from Continuing Operations before Income Taxes	$	(151	)	$	(246	)	$	89		$	67		$	(61	)
Margins:
- Cabinets and Related Products		-3.8	%		-1.9	%		-3.7	%		-2.9	%		-7.1	%
- Plumbing Products		9.2	%		5.2	%		13.7	%		11.7	%		6.0	%
- Installation and Other Services		-10.4	%		-9.2	%		-10.2	%		-10.9	%		-11.4	%
- Decorative Architectural Products		21.9	%		17.8	%		25.7	%		23.0	%		19.4	%
- Other Specialty Products		-34.1	%		-136.9	%		9.6	%		4.8	%		-6.1	%
-Total		2.8	%		-8.1	%		8.7	%		7.5	%		2.2	%
- North America		1.5	%		-11.7	%		7.5	%		7.3	%		1.3	%
- International, principally Europe		7.5	%		3.3	%		12.8	%		8.4	%		5.5	%
-Total, as above		2.8	%		-8.1	%		8.7	%		7.5	%		2.2	%

	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 8.

Page 7

MASCO CORPORATION
Quarterly Segment Data — 2009
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	$	43	$	17	$	7	$	10	$	9
- Plumbing Products		19		6		6		4		3
- Installation and Other Services		24		2		7		7		8
- Decorative Architectural Products		1		—		1		—		—
- Other Specialty Products		3		—		—		1		2
-Total	$	90	$	25	$	21	$	22	$	22
- North America	$	78	$	20	$	16	$	22	$	20
- International, principally Europe		12		5		5		—		2
-Total, as above	$	90	$	25	$	21	$	22	$	22
General Corporate Expense (GCE), Net		4		2		—		—		2
-Total	$	94	$	27	$	21	$	22	$	24
Goodwill and Other Intangible Assets Impairment
- Cabinets and Related Products	$	—	$	—	$	—	$	—	$	—
- Plumbing Products		39		39		—		—		—
- Installation and Other Services		—		—		—		—		—
- Decorative Architectural Products		—		—		—		—		—
- Other Specialty Products		223		223		—		—		—
-Total	$	262	$	262	$	—	$	—	$	—
- North America	$	223	$	223	$	—	$	—	$	—
- International, principally Europe		39		39		—		—		—
-Total, as above	$	262	$	262	$	—	$	—	$	—

	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

MASCO CORPORATION
Other Income (Expense), Net
2010 & 2009 — by Quarter — Unaudited
(in millions)

	2010												2009
	Year		Qtr. 4		Qtr. 3		Qtr. 2			Qtr. 1			Year			Qtr. 4			Qtr. 3			Qtr. 2			Qtr. 1
Interest Expense							$	(67	)	$	(58	)	$	(225	)	$	(56	)	$	(56	)	$	(57	)	$	(56	)
Income from Cash and Cash Investments								1			1			7			1			2			1			3
Other Interest Income								—			1			2			1			1			—			—
Realized Gains (Losses) from Financial Investments, Net								1			—			3			3			—			—			—
Impairment Charges for Financial Investments								(33	)		—			(10	)		—			—			(7	)		(3	)
Other, Net								(5	)		—			17			2			4			14			(3	)
Total Other Income (Expense), Net	$	—	$	—	$	—	$	(103	)	$	(56	)	$	(206	)	$	(49	)	$	(49	)	$	(49	)	$	(59	)

	Notes:
-	Data exclude discontinued operations.
-	Other, Net, in 2010 includes currency (losses) gains of ($1) million and ($5) million for the first and second quarters, respectively.
-	Other, Net, in 2009 includes currency (losses) gains of ($2) million, $11 million, $5 million, and $3 million for the first, second, third and fourth quarters, respectively.

Page 9

MASCO CORPORATION
Condensed Consolidated Balance Sheets — Unaudited
(in millions)

	June 30,		December 31,
	2010		2009
Assets
Current Assets:
Cash and Cash Investments	$	1,384	$	1,413
Receivables		1,157		983
Prepaid Expenses and Other		297		312
Inventories		840		743
Total Current Assets		3,678		3,451
Property and Equipment, Net		1,851		1,981
Goodwill		3,077		3,108
Other Intangible Assets, Net		283		290
Other Assets		302		345
Total Assets	$	9,191	$	9,175
Liabilities
Current Liabilities:
Notes Payable	$	66	$	364
Accounts Payable		729		578
Accrued Liabilities		823		839
Total Current Liabilities		1,618		1,781
Long-Term Debt		4,038		3,604
Deferred Income Taxes and Other		927		973
Total Liabilities		6,583		6,358
Shareholders’ Equity		2,608		2,817
Total Liabilities and Shareholders’ Equity	$	9,191	$	9,175

Page 10

MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation — Unaudited
(dollars in millions)

	Three Months Ended
	June 30,
	2010			2009		% D
Net Sales, As Reported	$	2,048		$	2,013		2	%
- Acquisitions		—			—
- Currency Translation		17			—
Net Sales, Excluding Acquisitions and Currency Translation	$	2,065		$	2,013		3	%
North America Net Sales, As Reported	$	1,659		$	1,630		2	%
- Acquisitions		—			—
- Currency Translation		(7	)		—
North America Net Sales, Excluding Acquisitions and Currency Translation	$	1,652		$	1,630		1	%
International Net Sales, As Reported	$	389		$	383		2	%
- Acquisitions		—			—
- Currency Translation		24			—
International Net Sales, Excluding Acquisitions and Currency Translation	$	413		$	383		8	%

	Six Months Ended
	June 30,
	2010			2009		% D
As Reported	$	3,900		$	3,810		2	%
- Acquisitions		—			—
- Currency Translation		(19	)		—
Net Sales, Excluding Acquisitions and Currency Translation	$	3,881		$	3,810		2	%
North America Net Sales, As Reported	$	3,089		$	3,064		1	%
- Acquisitions		—			—
- Currency Translation		(17	)		—
North America Net Sales, Excluding Acquisitions and Currency Translation	$	3,072		$	3,064		0	%
International Net Sales, As Reported	$	811		$	746		9	%
- Acquisitions		—			—
- Currency Translation		(2	)		—
International Net Sales, Excluding Acquisitions and Currency Translation	$	809		$	746		8	%

	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 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 June 30,
	2010					2009
	$		Margin			$		Margin
Operating Profit, As Reported	$	119		5.8	%	$	116		5.8	%
Impairment Charges for Goodwill and Other Intangible Assets		—					—
Business Rationalizations and Other Initiatives		51					22
Charge for Litigation Settlement		—					—
Charge for Defined-Benefit Plan Curtailment		—					—
Operating Profit, As Reconciled	$	170		8.3	%	$	138		6.9	%

	Six Months Ended June 30,
	2010					2009
	$		Margin			$		Margin
Operating Profit, As Reported	$	197		5.1	%	$	114		3.0	%
Impairment Charges for Goodwill and Other Intangible Assets		—					—
Business Rationalizations and Other Initiatives		65					46
Charge for Litigation Settlement		—					—
Charge for Defined-Benefit Plan Curtailment		—					8
Operating Profit, As Reconciled	$	262		6.7	%	$	168		4.4	%

	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 Profit and Shareholders’ Equity — Unaudited
(in millions)

	Twelve
	Months Ended
	June 30,
	2010
Operating Profit, As Reported	$	138
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations		262
Charge for Defined-Benefit Plan Curtailment		—
Charge for Litigation Settlement		7
Operating Profit, As Reconciled	$	407

	Twelve Months Ended
	June 30,
	2010		2009
Shareholders’ Equity, As Reported	$	2,608	$	3,005
Impairment Charges for Goodwill and Other Intangible Assets (after tax)		180		445
Charge for Defined-Benefit Plan Curtailment (after tax)		—		5
Charge for Litigation Settlement (after tax)		4		6
Shareholders’ Equity, As Reconciled	$	2,792	$	3,461

	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.

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