UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC  20549

	
 	
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): October 30, 2019

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

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

					
17450 College Parkway,	Livonia,	Michigan	 	48152	
(Address of Principal Executive Offices)	 	(Zip Code)	
(313) 274-7400
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

			
Title of each class	Trading Symbol	Name of each exchange on which registered	
Common Stock, $1.00 par value	MAS	New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

	

Item 2.02.  Results of Operations and Financial Condition.
 
Attached and incorporated herein by reference as Exhibit 99 is a copy of the press release dated October 30, 2019 reporting Masco Corporation’s financial results for the third quarter 2019 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2019. On October 30, 2019, Masco Corporation will hold an investor conference call and webcast to discuss financial results for the third quarter 2019.
 
This information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.

Item 9.01.  Financial Statements and Exhibits.
 
(d) Exhibits.
 
99  Press Release of Masco Corporation dated October 30, 2019 reporting Masco Corporation’s financial results for the third quarter 2019 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2019.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	
			
 	MASCO CORPORATION	

 	By:	/s/ John G. Sznewajs	
 	Name:	John G. Sznewajs	
 	Title:	Vice President, Chief Financial Officer	

October 30, 2019

	

2

Exhibit 99

MASCO CORPORATION REPORTS THIRD QUARTER 2019 RESULTS

Key Results

•	Sales increased 2 percent to $1.9 billion; in local currency, sales increased 3 percent	
		
•	Operating profit for the quarter increased 10 percent to $316 million; adjusted operating profit increased 8 percent to $326 million	
		
•	Earnings per share from continuing operations increased 16 percent to $0.64 per share; adjusted earnings per share from continuing operations increased 11 percent to $0.68 per share	
		
•	Updating 2019 anticipated earnings per share from continuing operations to be in the range of $2.41 - $2.45 per share, and on an adjusted basis, to be in the range of $2.52 - $2.56 per share	
		
•	Windows businesses accounted for as discontinued operations	

LIVONIA, Mich. (October 30, 2019) - Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported its third quarter results.

“We delivered solid sales and operating profit growth in the quarter, as well as strong margin expansion,” said Masco President and CEO, Keith Allman. “This performance was driven by growth in both our Plumbing Products and Decorative Architectural Products segments. Additionally, we continued our focus on creating shareholder value and returned $186 million to shareholders through share repurchases and dividends during the quarter.”

2019 Third Quarter Commentary

•	On a reported basis, compared to third quarter 2018:	
		
•	Net sales increased 2 percent to $1.9 billion; in local currency, net sales increased 3 percent	
		
•	In local currency, North American sales increased 3 percent and international sales increased 5 percent	
		
•	Gross margins increased 150 basis points to 34.2 percent from 32.7 percent	
		
•	Operating profit increased 10 percent to $316 million	
		
•	Operating margins increased 120 basis points to 16.2 percent from 15.0 percent	
		
•	Income from continuing operations increased to $0.64 per share, compared to $0.55 per share	
		
•	Compared to third quarter 2018, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 25 percent, were as follows:	
		
•	Gross margins increased 80 basis points to 34.4 percent compared to 33.6 percent	
		
•	Operating profit increased 8 percent to $326 million from $303 million	
		
•	Operating margins increased 80 basis points to 16.7 percent compared to 15.9 percent	
		
•	Income from continuing operations increased to $0.68 per share, compared to $0.61 per share	
		
•	Liquidity at the end of the third quarter was $475 million	
		
•	Repurchased 3.8 million shares in the quarter	

2019 Third Quarter Operating Segment Results

•	Plumbing Products’ net sales increased 1 percent (3 percent excluding the impact of foreign currency) due to growth in both North America and international	
		
•	Decorative Architectural Products’ net sales increased 5 percent due to strong growth in paints and other coating products	
		
•	Cabinetry Products’ net sales decreased 3 percent due to mix, partially offset by pricing	

“We are pleased with our performance in the third quarter and with the progress we are making on the anticipated divestitures of our Cabinetry and Windows businesses. During the quarter we completed the sale of our UK Window business and announced the signing of a definitive agreement to sell our Milgard Windows and Doors business,” said Allman. “After accounting for our Windows businesses as discontinued operations, we now expect adjusted earnings per share from continuing operations to be in the range of $2.52-$2.56 for the full year.”

1

About Masco

Headquartered in Livonia, Michigan, Masco Corporation is a global leader in the design, manufacture and distribution of branded home improvement and building products. Our portfolio of industry-leading brands includes Behr® paint; Delta® and Hansgrohe® faucets, bath and shower fixtures; KraftMaid® and Merillat® cabinets; Kichler® decorative and outdoor lighting; and HotSpring® spas. We leverage our powerful brands across product categories, sales channels and geographies to create value for our customers and shareholders. For more information about Masco Corporation, visit www.masco.com.

The 2019 third quarter supplemental material, including a presentation in PDF format, is available on Masco’s website at www.masco.com.

Conference Call Details

A conference call regarding items contained in this release is scheduled for Wednesday, October 30, 2019 at 8:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (855) 226-2726 (855-22MASCO) and from outside the U.S. at (706) 679-3614. Please use the conference identification number 4086468. The conference call will be webcast simultaneously and in its entirety through Masco’s website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on Masco’s website.

A replay of the call will be available on Masco’s website or by phone by dialing (855) 859-2056 and from outside the U.S. at (404) 537-3406. Please use the conference identification number 4086468. The telephone replay will be available approximately two hours after the end of the call and continue through November 30, 2019.

Safe Harbor Statement

This press release contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “outlook,” “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods. Our views about future performance 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 the levels of residential repair and remodel activity and new home construction, our ability to maintain our strong brands and reputation and to develop new products, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of raw materials and increasing tariffs, our dependence on third-party suppliers, risks associated with international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, including the potential divestitures of our Cabinetry and Windows businesses, our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire, our ability to attract, develop and retain talented personnel, risks associated with our reliance on information systems and technology, and our ability to achieve the anticipated benefits from our investments in new technology. These and other factors are discussed in detail in Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Any forward-looking statement made by us speaks only as of the date on which it was made. 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.

Investor Contact

David Chaika
Vice President, Treasurer and Investor Relations    
313.792.5500
david_chaika@mascohq.com
# # #

2

MASCO CORPORATION
Condensed Consolidated Statements of Operations - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

(in millions, except per common share data)

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2019	 	2018	 	2019	 	2018	
Net sales	$	1,947		 	$	1,904		 	$	5,787		 	$	5,743		
Cost of sales	1,282		 	1,281		 	3,813		 	3,832		
Gross profit	665		 	623		 	1,974		 	1,911		
 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	349		 	337		 	1,047		 	1,041		
Impairment charge for other intangible assets	—		 	—		 	9		 	—		
Operating profit	316		 	286		 	918		 	870		
 	 	 	 	 	 	 	 	
Other income (expense), net:	 	 	 	 	 	 	 	
Interest expense	(39	)	 	(38	)	 	(119	)	 	(117	)	
Other, net	(8	)	 	—		 	(16	)	 	(12	)	
 	(47	)	 	(38	)	 	(135	)	 	(129	)	
Income from continuing operations before
    income taxes	269		 	248		 	783		 	741		
 	 	 	 	 	 	 	 	
Income tax expense	73		 	67		 	202		 	188		
Income from continuing operations	196		 	181		 	581		 	553		
 	 	 	 	 	 	 	 	
(Loss) income from discontinued operations, net	(58	)	 	10		 	(64	)	 	23		
Net income	138		 	191		 	517		 	576		
 	 	 	 	 	 	 	 	
Less: Net income attributable to noncontrolling interest	12		 	11		 	35		 	36		
Net income attributable to Masco Corporation	$	126		 	$	180		 	$	482		 	$	540		
 	 	 	 	 	 	 	 	
Income (loss) per common share attributable to Masco Corporation (diluted):	 		 	 		 	 		 	 		
Income from continuing operations	$	0.64		 	$	0.55		 	$	1.87		 	$	1.66		
(Loss) income from discontinued operations,
   net	(0.20	)	 	0.03		 	(0.22	)	 	0.07		
Net income	$	0.44		 	$	0.58		 	$	1.65		 	$	1.73		
 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	287		 	306		 	290		 	309		
 	 	 	 	 	 	 	 	
Amounts attributable to Masco Corporation:	 		 	 		 	 		 	 		
Income from continuing operations	$	184		 	$	170		 	$	546		 	$	517		
(Loss) income from discontinued operations,
   net	(58	)	 	10		 	(64	)	 	23		
Net income attributable to Masco Corporation	$	126		 	$	180		 	$	482		 	$	540		
 
Historical information is available on our website.

3

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

(dollars in millions)

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2019	 	2018	 	2019		2018	
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Net sales	$	1,947		 	$	1,904		 	$	5,787		 	$	5,743		
 	 	 	 	 	 	 	 	
Gross profit, as reported	$	665		 	$	623		 	$	1,974		 	$	1,911		
Rationalization charges	5		 	2		 	7		 	5		
Kichler inventory step up adjustment	—		 	15		 	—		 	40		
Gross profit, as adjusted	$	670		 	$	640		 	$	1,981		 	$	1,956		
 	 	 	 	 	 	 	 	
Gross margin, as reported	34.2	%	 	32.7	%		34.1	%		33.3	%	
Gross margin, as adjusted	34.4	%	 	33.6	%		34.2	%		34.1	%	
 	 	 	 	 	 	 	 	
Selling, general and administrative expenses, as reported	$	349		 	$	337		 	$	1,047		 	$	1,041		
Rationalization charges	4		 	—		 	4		 	—		
Professional fees related to potential divestiture	1		 	—		 	4		 	—		
Selling, general and administrative expenses, as adjusted	$	344		 	$	337		 	$	1,039		 	$	1,041		
 	 	 	 	 	 	 	 	
Selling, general and administrative expenses as percent of net sales, as reported	17.9	%	 	17.7	%		18.1	%		18.1	%	
Selling, general and administrative expenses as percent of net sales, as adjusted	17.7	%	 	17.7	%	 	18.0	%	 	18.1	%	
 	 	 	 	 	 	 	 	
Operating profit, as reported	$	316		 	$	286		 	$	918		 	$	870		
Rationalization charges	9		 	2		 	11		 	5		
Kichler inventory step up adjustment	—		 	15		 	—		 	40		
Impairment charge for other intangible assets	—		 	—		 	9		 	—		
Professional fees related to potential divestiture	1		 	—		 	4		 	—		
Operating profit, as adjusted	$	326		 	$	303			$	942			$	915		
 	 	 	 	 	 	 	 	
Operating margin, as reported	16.2	%	 	15.0	%		15.9	%		15.1	%	
Operating margin, as adjusted	16.7	%	 	15.9	%		16.3	%		15.9	%	

Historical information is available on our website.

4

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

(in millions, except per common share data)

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2019	 	2018	 	2019	 	2018	
Income Per Common Share Reconciliations	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes, as reported	$	269		 	$	248		 	$	783		 	$	741		
Rationalization charges	9		 	2		 	11		 	5		
Kichler inventory step up adjustment	—		 	15		 	—		 	40		
Impairment charge for other intangible assets	—		 	—		 	9		 	—		
Professional fees related to potential divestiture	1		 	—		 	4		 	—		
(Earnings) from equity investments, net	(1	)	 	—		 	(1	)	 	(2	)	
Income from continuing operations before income taxes, as adjusted	278		 	265		 	806		 	784		
Tax at 25% rate	(70	)		(66	)	 	(202	)	 	(196	)	
Less: Net income attributable to noncontrolling interest	12		 	11		 	35		 	36		
Income from continuing operations, as adjusted	$	196		 	$	188		 	$	569		 	$	552		
 	 	 	 	 	 	 	 	
Income from continuing operations per common share, as adjusted	$	0.68			$	0.61		 	$	1.96		 	$	1.79		
 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	287		 	306		 	290		 	309		

Outlook for the Twelve Months Ended December 31, 2019

								
 	Twelve Months Ended December 31, 2019	
 	Low End	 	High End	
Income Per Common Share Outlook	 	 	 	
 	 	 	 	
Income from continuing operations per common share	$	2.41		 	$	2.45		
Rationalization charges	0.04		 	0.04		
Impairment charge for other intangible assets	0.03		 	0.03		
Professional fees related to potential divestiture	0.02		 	0.02		
Allocation to participating securities per share (1)	0.02		 	0.02		
Income from continuing operations per common share, as adjusted	$	2.52		 	$	2.56		

(1) Represents the impact of distributed dividends and undistributed earnings to unvested restricted stock awards in accordance with the two-class method of calculating earnings per share.

Historical information is available on our website.

5

MASCO CORPORATION
Condensed Consolidated Balance Sheets and Other Financial Data - Unaudited
September 30, 2019 and December 31, 2018

(dollars in millions)

								
 	September 30, 2019	 	December 31, 2018	
Balance Sheet	 		 	 		
Assets	 		 	 		
Current Assets:	 		 	 		
Cash and cash investments	$	475		 	$	553		
Receivables	1,177		 	1,068		
Prepaid expenses and other	105		 	90		
Inventories	924		 	904		
Assets held for sale	111		 	151		
Total Current Assets	2,792		 	2,766		
 	 	 	 	
Property and equipment, net	1,017		 	1,037		
Operating lease right-of-use assets	183		 	—		
Goodwill	687		 	692		
Other intangible assets, net	264		 	289		
Other assets	85		 	100		
Assets held for sale	492		 	509		
Total Assets	$	5,520		 	$	5,393		
 	 	 	 	
Liabilities	 		 	 		
Current Liabilities:	 		 	 		
Accounts payable	$	879		 	$	851		
Notes payable	208		 	8		
Accrued liabilities	682		 	676		
Liabilities held for sale	140		 	149		
Total Current Liabilities	1,909		 	1,684		
 	 	 	 	
Long-term debt	2,771		 	2,971		
Other liabilities	684		 	561		
Liabilities held for sale	133		 	108		
Total Liabilities	5,497		 	5,324		
 	 	 	 	
Equity	23		 	69		
Total Liabilities and Equity	$	5,520		 	$	5,393		

	
								
 	As of September 30,	
 	2019	 	2018	
Other Financial Data	 		 	 		
Working Capital Days	 		 	 		
Receivable days	53		 	54		
Inventory days	71		 	76		
Payable days	69		 	75		
Working capital	$	1,222		 	$	1,204		
Working capital as a % of sales (LTM)	16.0	%	 	16.2	%	
 
Historical information is available on our website.

6

MASCO CORPORATION
Condensed Consolidated Statements of Cash Flows and Other Financial Data - Unaudited
For the Nine Months Ended September 30, 2019 and 2018

(dollars in millions)

								
 	Nine Months Ended September 30,	
 	2019	 	2018	
Cash Flows From (For) Operating Activities:	 		 	 		
Cash provided by operating activities	$	754		 	$	729		
Working capital changes	(149	)	 	(75	)	
Net cash from operating activities	605		 	654		
 	 	 	 	
Cash Flows From (For) Financing Activities:	 		 	 		
Retirement of notes	—		 	(114	)	
Purchase of Company common stock	(440	)	 	(354	)	
Cash dividends paid	(105	)	 	(98	)	
Dividends paid to noncontrolling interest	(42	)	 	(89	)	
Proceeds from the exercise of stock options	23		 	8		
Employee withholding taxes paid on stock-based compensation	(21	)	 	(38	)	
Decrease in debt, net	(3	)	 	(1	)	
Credit Agreement and other financing costs	(2	)	 	—		
Net cash for financing activities	(590	)	 	(686	)	
 	 	 	 	
Cash Flows From (For) Investing Activities:	 		 	 		
Capital expenditures	(111	)	 	(160	)	
Acquisition of business, net of cash acquired	—		 	(549	)	
Proceeds from disposition of business, net of cash disposed	2		 	—		
Other, net	5		 	108		
Net cash for investing activities	(104	)	 	(601	)	
 	 	 	 	
Effect of exchange rate changes on cash and cash investments	10		 	8		
 	 	 	 	
Cash and Cash Investments:	 		 	 		
Decrease for the period	(79	)	 	(625	)	
At January 1	559		 	1,194		
At September 30	$	480		 	$	569		

	
								
 	As of September 30,	
 	2019	 	2018	
Liquidity	 		 	 		
Cash and cash investments	$	475		 	$	560		
 
Historical information is available on our website.

7

MASCO CORPORATION
Segment Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

(dollars in millions)

																						
 	Three Months Ended September 30,	 	 	 	Nine Months Ended September 30,	 	 	
 	2019	 	2018	 	Change	 	2019	 	2018	 	Change	
Plumbing Products	 		 	 		 	 		 	 	 	 	 	 	
Net sales	$	1,006		 	$	992		 	1	 %	 	$	2,958		 	$	2,995		 	(1	)%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	179		 	$	177		 	 		 	$	530		 	$	534		 	 	
Operating margin, as reported	17.8	%	 	17.8	%					17.9	%		17.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	9		 	2		 	 		 	11		 	4		 	 	
Accelerated depreciation related to rationalization activity	—		 	—		 	 	 	—		 	1		 	 	
Operating profit, as adjusted	188		 	179						541			539		 	 	
Operating margin, as adjusted	18.7	%	 	18.0	%					18.3	%		18.0	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	20		 	20		 	 		 	59		 	56		 	 	
EBITDA, as adjusted	$	208		 	$	199						$	600			$	595		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Decorative Architectural Products	 		 	 		 	 		 	 	 	 	 	 	
Net sales	$	710		 	$	673		 	5	 %	 	$	2,110		 	$	2,024		 	4	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	134		 	$	104		 	 	 	$	380		 	$	338		 	 	
Operating margin, as reported	18.9	%		15.5	%					18.0	%		16.7	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Kichler inventory step up adjustment	—		 	15		 	 	 	—		 	40		 	 	
Impairment charge for other intangible assets	—		 	—		 	 	 	9		 	—		 	 	
Operating profit, as adjusted	134		 	119						389			378		 	 	
Operating margin, as adjusted	18.9	%	 	17.7	%					18.4	%		18.7	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	11		 	10		 	 		 	31		 	25		 	 	
EBITDA, as adjusted	$	145		 	$	129						$	420			$	403		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Cabinetry Products	 		 	 		 	 		 	 	 	 	 	 	
Net sales	$	231		 	$	239		 	(3	)%	 	$	719		 	$	724		 	(1	)%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	26		 	$	23		 	 		 	$	79		 	$	62		 	 	
Operating margin, as reported	11.3	%		9.6	%					11.0	%		8.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Professional fees related to potential divestiture	1		 	—		 	 		 	4		 	—		 	 	
Operating profit, as adjusted	27		 	23						83			62		 	 	
Operating margin, as adjusted	11.7	%	 	9.6	%					11.5	%		8.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	3		 	3		 	 		 	10		 	10		 	 	
EBITDA, as adjusted	$	30		 	$	26						$	93			$	72		 	 	
 Historical information is available on our website.

8

MASCO CORPORATION
Segment Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

(dollars in millions)

																						
 	Three Months Ended September 30,	 	 	 	Nine Months Ended September 30,	 	 	
 	2019	 	2018	 	Change	 	2019	 	2018	 	Change	
Total	 		 	 		 	 		 	 	 	 	 	 		
Net sales	$	1,947		 	$	1,904		 	2	%	 	$	5,787		 	$	5,743		 	1	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported - segment	$	339		 	$	304		 	 		 	$	989		 	$	934		 	 		
General corporate expense, net	(23	)	 	(18	)	 	 		 	(71	)	 	(64	)	 	 		
Operating profit, as reported	316		 	286						918			870		 	 		
Operating margin, as reported	16.2	%	 	15.0	%					15.9	%		15.1	%	 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges - segment	9		 	2		 	 		 	11		 	4		 	 		
Accelerated depreciation related to rationalization activity - segment	—		 	—		 	 	 	—		 	1		 	 	
Kichler inventory step up adjustment	—		 	15		 	 		 	—		 	40		 	 		
Impairment charge for other intangible assets	—		 	—		 	 	 	9		 	—		 	 	
Professional fees related to potential divestiture	1		 	—		 	 	 	4		 	—		 	 	
Operating profit, as adjusted	326		 	303		 	 	 	942			915		 	 	
Operating margin, as adjusted	16.7	%	 	15.9	%					16.3	%		15.9	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization - segment	34		 	33		 	 		 	100		 	91		 	 		
Depreciation and amortization - non-operating	2		 	2		 	 		 	7		 	6		 	 		
EBITDA, as adjusted	$	362		 	$	338						$	1,049			$	1,012		 	 		
 
Historical information is available on our website.

9

MASCO CORPORATION
North American and International Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

(dollars in millions)

																						
 	Three Months Ended September 30,				Nine Months Ended September 30,			
 	2019		2018		Change		2019		2018		Change	
North American	 		 	 		 	 		 	 		 	 		 	 	
Net sales	$	1,605		 	$	1,565		 	3	%	 	$	4,752		 	$	4,653		 	2	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	288		 	$	253		 	 		 	$	838		 	$	773		 	 	
Operating margin, as reported	17.9	%	 	16.2	%					17.6	%		16.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	9		 	2		 	 		 	11		 	4		 	 	
Accelerated depreciation related to rationalization activity	—		 	—		 	 	 	—		 	1		 	 	
Kichler inventory step up adjustment	—		 	15		 	 		 	—		 	40		 	 	
Impairment charge for other intangible assets	—		 	—		 	 	 	9		 	—		 	 	
Professional fees related to potential divestiture	1		 	—		 	 	 	4		 	—		 	 	
Operating profit, as adjusted	298		 	270						862			818		 	 	
Operating margin, as adjusted	18.6	%	 	17.3	%					18.1	%		17.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	24		 	23		 	 		 	71		 	63		 	 	
EBITDA, as adjusted	$	322		 	$	293						$	933			$	881		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
International	 		 	 		 	 		 	 		 	 		 	 	
Net sales	$	342		 	$	339		 	1	%	 	$	1,035		 	$	1,090		 	(5	)%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	51		 	$	51		 	 		 	$	151		 	$	161		 	 	
Operating margin, as reported	14.9	%	 	15.0	%					14.6	%		14.8	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	10		 	10		 	 		 	29		 	28		 	 	
EBITDA	$	61		 	$	61						$	180			$	189		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Historical information is available on our website.

10

MASCO CORPORATION
North American and International Data - Unaudited
For the Three and Nine Months Ended September 30, 2019 and 2018

	
																						
(dollars in millions)	 	
 	Three Months Ended September 30,	 	 	 	Nine Months Ended September 30,	 	 	
 	2019	 	2018	 	Change	 	2019	 	2018	 	Change	
Total	 		 	 		 	 		 	 		 	 		 	 	
Net sales	$	1,947		 	$	1,904		 	2	%	 	$	5,787		 	$	5,743		 	1	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported - segment	$	339		 	$	304		 	 		 	$	989		 	$	934		 	 	
General corporate expense, net	(23	)	 	(18	)	 	 		 	(71	)	 	(64	)	 	 	
Operating profit, as reported	316		 	286						918			870		 	 	
Operating margin, as reported	16.2	%	 	15.0	%					15.9	%		15.1	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges - segment	9		 	2		 	 		 	11		 	4		 	 	
Accelerated depreciation related to rationalization activity	—		 	—		 	 	 	—		 	1		 	 	
Kichler inventory step up adjustment	—		 	15		 	 		 	—		 	40		 	 	
Impairment charge for other intangible assets	—		 	—		 	 	 	9		 	—		 	 	
Professional fees related to potential divestiture	1		 	—		 	 	 	4		 	—		 	 	
Operating profit, as adjusted	326		 	303						942			915		 	 	
Operating margin, as adjusted	16.7	%	 	15.9	%					16.3	%		15.9	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization - segment	34		 	33		 	 		 	100		 	91		 	 	
Depreciation and amortization - non-operating	2		 	2		 	 		 	7		 	6		 	 	
EBITDA, as adjusted	$	362		 	$	338		 	 		 	$	1,049		 	$	1,012		 	 	

Historical information is available on our website.

11