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 24, 2017

	

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

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

	
			
17450 College Parkway, Livonia, Michigan
(Address of Principal Executive Offices)	 	48152
(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:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

o 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. o  

	

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 24, 2017 reporting Masco Corporation’s financial results for the third quarter of 2017 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2017 . On October 24, 2017 , Masco Corporation will hold an investor conference call and webcast to discuss financial results for the third quarter 2017 .
 
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 24, 2017 reporting Masco Corporation’s financial results for the third quarter 2017 and certain other information and supplemental information prepared for use in connection with the financial results for the third quarter 2017 .

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 24, 2017

	

2

Exhibit 99

MASCO CORPORATION REPORTS THIRD QUARTER 2017 RESULTS

Key Highlights

•	Sales for the third quarter increased 3 percent to $1.9 billion ; in local currency, sales increased 2 percent	
		
•	Operating profit for the quarter grew 10 percent to $295 million ; adjusted operating profit grew 8 percent to $296 million	
		
•	Earnings per share for the quarter grew 15 percent to $0.46 per common share; adjusted earnings per share grew 22 percent to $0.50 per common share	
		
•	Updating 2017 earnings per share target to $1.93 to $1.97 from $1.93 to $2.00 per common share which reflects the impact of the severe hurricanes	

LIVONIA, Mich. ( October 24, 2017 ) - Masco Corporation (NYSE: MAS), one of the world’s leading manufacturers of branded home improvement and building products, reported net sales and operating profit growth in the third quarter of 2017.

“We are pleased with our performance and the progress we made towards our growth initiatives during the quarter, especially in light of the impact from the severe hurricanes experienced in Texas, Florida, and Puerto Rico,” said Masco President and CEO, Keith Allman. “Growth was once again led by our Plumbing Products and Decorative Architectural Products segments, and we continued to invest in our strong plumbing brands and our pro paint initiative. Additionally, we returned approximately $210 million to shareholders through dividends and share repurchases in the quarter.”

2017 Third Quarter Commentary

•	On a reported basis, compared to third quarter 2016 :	
		
•	Net sales increased 3 percent to $1.9 billion ; in local currency net sales increased 2 percent	
		
•	In local currency, North American sales increased 2 percent and international sales increased 4 percent	
		
•	Gross margins improved 90 basis points to 33.6 percent from 32.7 percent	
		
•	Operating margins improved 90 basis points to 15.2 percent from 14.3 percent	
		
•	Net income was $0.46 per common share compared to $0.40 per common share	
		
•	Compared to third quarter 2016 , results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 34 percent (36 percent in 2016), were as follows:	
		
•	Gross margins improved to 33.6 percent compared to 32.9 percent	
		
•	Operating margins improved to 15.3 percent compared to 14.7 percent	
		
•	Net income was $0.50 per common share, compared to $0.41 per common share	
		
•	Liquidity at the end of the third quarter was approximately $1.2 billion	
		
•	4.0 million shares were repurchased in the third quarter	

2017 Third Quarter Operating Segment Highlights

•	Plumbing Products’ net sales increased 6 percent ( 4 percent excluding the impact of foreign currency translation), driven by North American and international growth	
		
•	Decorative Architectural Products’ net sales increased 3 percent with growth from Behr’s pro initiative and Liberty’s builders’ hardware business	
		
•	Cabinetry Products’ net sales decreased 4 percent due to decreased sales to U.S. and U.K. builders	
		
•	Windows and Other Specialty Products’ net sales were flat due to the divestiture of Arrow Fastener. Excluding the impact of this divestiture, net sales increased 9 percent, driven by strong sales of windows in North America	

Outlook

“The demand drivers underlying our industry continue to be strong and very supportive of long-term growth,” said Allman. “The negative effects of the hurricanes are expected to be short-term for our business, and we are confident in our plans to leverage our strong brands, industry leading positions, and our Masco Operating System to capitalize on these robust, long-term demand drivers. Considering the impact of the severe weather experienced recently, we are updating our 2017 earnings per share target to a range of $1.93 to $1.97. Looking forward, we are committed to achieving our 2019 earnings per share target of $2.50 that we announced at our Investor Day in May.”

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; Milgard® windows and doors; and Hot Spring® 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 2017 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 Tuesday, October 24, 2017 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 89235746. 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 89235746. The telephone replay will be available approximately two hours after the end of the call and continue through November 24, 2017.

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 “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 home improvement activity and new home construction, our ability to maintain our strong brands and to develop and introduce new and improved products, our ability to maintain our competitive position in our industries, our reliance on key customers, our ability to achieve the anticipated benefits of our strategic initiatives, our ability to improve our under-performing U.S. window business, the cost and availability of raw materials, our dependence on third party suppliers, and risks associated with international operations and global strategies. 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. The forward-looking statements in this press release speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

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 Months and Nine Months Ended September 30, 2017 and 2016

(in millions, except per common share data)

																
 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	2017	 	2016	 	2017	 	2016	
Net sales	$	1,936		 	$	1,877		 	$	5,770		 	$	5,598		
Cost of sales	1,286		 	1,263		 	3,775		 	3,715		
Gross profit	650		 	614		 	1,995		 	1,883		
 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	355		 	345		 	1,090		 	1,045		
Operating profit	295		 	269		 	905		 	838		
 	 	 	 	 	 	 	 	
Other income (expense), net:	 	 	 	 	 	 	 	
Interest expense	(43	)	 	(43	)	 	(239	)	 	(186	)	
Other, net	4		 	1		 	58		 	5		
 	(39	)	 	(42	)	 	(181	)	 	(181	)	
Income before income taxes	256		 	227		 	724		 	657		
 	 	 	 	 	 	 	 	
Income tax expense	96		 	81		 	243		 	229		
Net income	160		 	146		 	481		 	428		
Less: Net income attributable to noncontrolling interest	12		 	12		 	35		 	35		
Net income attributable to Masco Corporation	$	148		 	$	134		 	$	446		 	$	393		
 	 	 	 	 	 	 	 	
Income per common share attributable to Masco Corporation (diluted):	 		 	 		 	 		 	 		
Net income	$	0.46		 	$	0.40		 	$	1.38		 	$	1.17		
 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	316		 	329		 	319		 	332		
 
Historical information is available on our website.

3

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three Months and Nine Months Ended September 30, 2017 and 2016

(in millions)

																	
 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	 	2017	 	2016	 	2017	 	2016	
Gross Profit, Selling, General and Administrative Expenses, and Operating Profit Reconciliations	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Net sales	 	$	1,936		 	$	1,877		 	$	5,770		 	$	5,598		
 	 	 	 	 	 	 	 	 	
Gross profit, as reported	 	$	650		 	$	614		 	$	1,995		 	$	1,883		
Rationalization charges	 	1		 	4		 	3		 	10		
Gross profit, as adjusted	 	$	651		 	$	618		 	$	1,998		 	$	1,893		
 	 	 	 	 	 	 	 	 	
Gross margin, as reported	 	33.6	%	 	32.7	%	 	34.6	%	 	33.6	%	
Gross margin, as adjusted	 	33.6	%	 	32.9	%	 	34.6	%	 	33.8	%	
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses, as reported	 	$	355		 	$	345		 	$	1,090		 	$	1,045		
Rationalization charges	 	—		 	2		 	—		 	6		
Selling, general and administrative expenses, as adjusted	 	$	355		 	$	343		 	$	1,090		 	$	1,039		
 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses as percent of net sales, as reported	 	18.3	%	 	18.4	%	 	18.9	%	 	18.7	%	
Selling, general and administrative expenses as percent of net sales, as adjusted	 	18.3	%	 	18.3	%	 	18.9	%	 	18.6	%	
 	 	 	 	 	 	 	 	 	
Operating profit, as reported	 	$	295		 	$	269		 	$	905		 	$	838		
Rationalization charges	 	1		 	6		 	3		 	16		
Operating profit, as adjusted	 	$	296		 	$	275		 	$	908		 	$	854		
 	 	 	 	 	 	 	 	 	
Operating margin, as reported	 	15.2	%	 	14.3	%	 	15.7	%	 	15.0	%	
Operating margin, as adjusted	 	15.3	%	 	14.7	%	 	15.7	%	 	15.3	%	

Historical information is available on our website.

4

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three Months and Nine Months Ended September 30, 2017 and 2016

(in millions, except per common share data)

																	
 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	 	2017	 	2016	 	2017	 	2016	
Income Per Common Share Reconciliations	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Income before income taxes, as reported	 	$	256		 	$	227		 	$	724		 	$	657		
Rationalization charges	 	1		 	6		 	3		 	16		
(Gain) from auction rate securities	 	—		 	—		 	—		 	(1	)	
(Gains) from private equity funds, net	 	—		 	(1	)	 	(2	)	 	(2	)	
(Earnings) from equity investments, net	 	—		 	—		 	(1	)	 	(1	)	
Impairment of private equity funds	 	2		 	—		 	2		 	—		
Loss on extinguishment of debt	 	—		 	—		 	107		 	—		
(Gain) on sale of business	 	(2	)	 	—		 	(51	)	 	—		
Income before income taxes, as adjusted	 	257			232		 	782		 	669		
Tax at 34% rate (36% for 2016)	 	(87	)		(84	)	 	(266	)	 	(241	)	
Less: Net income attributable to noncontrolling interest	 	12			12		 	35		 	35		
Net income, as adjusted	 	$	158			$	136		 	$	481		 	$	393		
 	 	 	 	 	 	 	 	 	
Net income per common share, as adjusted	 	$	0.50			$	0.41		 	$	1.51		 	$	1.18		
 	 	 	 	 	 	 	 	 	
Average diluted common shares outstanding	 	316		 	329		 	319		 	332		

Outlook for the Twelve Months Ended December 31, 2017

									
 	 	Twelve Months Ended
December 31, 2017	
 	 	Low End	 	High End	
Income Per Common Share Outlook	 	 	 	 	
 	 	 	 	 	
Net income per common share	 	$	1.80		 	$	1.84		
Loss on extinguishment of debt	 	0.22		 	0.22		
(Gain) on sale of business	 	(0.11	)	 	(0.11	)	
Allocation to participating securities per share (1)	 	0.02		 	0.02		
Net income per common share, as adjusted	 	$	1.93		 	$	1.97		

(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, 2017 and December 31, 2016

(dollars in millions)

								
 	September 30, 2017	 	December 31, 2016	
Balance Sheet	 		 	 		
Assets	 		 	 		
Current Assets:	 		 	 		
Cash and cash investments	$	1,141		 	$	990		
Short-term bank deposits	77		 	201		
Receivables	1,128		 	917		
Inventories	866		 	712		
Prepaid expenses and other	96		 	114		
Total Current Assets	3,308		 	2,934		
 	 	 	 	
Property and equipment, net	1,097		 	1,060		
Goodwill	801		 	832		
Other intangible assets, net	156		 	154		
Other assets	121		 	157		
Total Assets	$	5,483		 	$	5,137		
 	 	 	 	
Liabilities	 		 	 		
Current Liabilities:	 		 	 		
Accounts payable	$	916		 	$	800		
Notes payable	117		 	2		
Accrued liabilities	675		 	658		
Total Current Liabilities	1,708		 	1,460		
 	 	 	 	
Long-term debt	2,969		 	2,995		
Other liabilities	746		 	785		
Total Liabilities	5,423		 	5,240		
 	 	 	 	
Equity	60		 	(103	)	
Total Liabilities and Equity	$	5,483		 	$	5,137		

	
								
 	As of September 30,	
 	2017	 	2016	
Other Financial Data	 		 	 		
Working Capital Days	 		 	 		
Receivable days	51		 	50		
Inventory days	63		 	56		
Payable days	72		 	72		
Working capital	$	1,078		 	$	946		
Working capital as a % of sales (LTM)	14.3	%	 	12.9	%	
 
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, 2017 and 2016

(dollars in millions)

								
 	Nine Months Ended September 30,	
 	2017	 	2016	
Cash Flows From (For) Operating Activities:	 		 	 		
Cash provided by operating activities	$	745		 	$	670		
Working capital changes	(278	)	 	(187	)	
Net cash from operating activities	467		 	483		
 	 	 	 	
Cash Flows From (For) Financing Activities:	 		 	 		
Retirement of notes	(535	)	 	(1,300	)	
Purchase of Company common stock	(312	)	 	(242	)	
Cash dividends paid	(96	)	 	(95	)	
Dividend paid to noncontrolling interest	(35	)	 	(31	)	
Issuance of notes, net of issuance costs	593		 	889		
Debt extinguishment costs	(104	)	 	(40	)	
Issuance of Company common stock	—		 	1		
Employee withholding taxes paid on stock-based compensation	(29	)	 	(40	)	
Decrease in debt, net	—		 	(2	)	
Net cash for financing activities	(518	)	 	(860	)	
 	 	 	 	
Cash Flows From (For) Investing Activities:	 		 	 		
Capital expenditures	(113	)	 	(117	)	
Proceeds from disposition of business	128		 	—		
Other, net	142		 	77		
Net cash from (for) investing activities	157		 	(40	)	
 	 	 	 	
Effect of exchange rate changes on cash and cash investments	45		 	(10	)	
 	 	 	 	
Cash and Cash Investments:	 		 	 		
Increase (decrease) for the period	151		 	(427	)	
At January 1	990		 	1,468		
At September 30	$	1,141		 	$	1,041		

	
								
 	As of September 30,	
 	2017	 	2016	
Liquidity	 		 	 		
Cash and cash investments	$	1,141		 	$	1,041		
Short-term bank deposits	77		 	182		
Total Liquidity	$	1,218		 	$	1,223		
 
Historical information is available on our website.

7

MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Nine Months Ended September 30, 2017 and 2016

(dollars in millions)

																						
 	Three Months Ended September 30,	 	 	 	Nine Months Ended September 30,	 	 	
 	2017	 	2016	 	Change	 	2017	 	2016	 	Change	
Plumbing Products	 		 	 		 	 		 	 	 	 	 	 	
Net sales	$	951		 	$	899		 	6	 %	 	$	2,763		 	$	2,635		 	5	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	175		 	$	174		 	 		 	$	529		 	$	491		 	 	
Operating margin, as reported	18.4	%	 	19.4	%	 	 		 	19.1	%	 	18.6	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	—		 	5		 	 		 	—		 	11		 	 	
Accelerated depreciation related to rationalization activity	1		 	—		 	 	 	1		 	—		 	 	
Operating profit, as adjusted	176		 	179		 	 	 	530		 	502		 	 	
Operating margin, as adjusted	18.5	%	 	19.9	%	 	 	 	19.2	%	 	19.1	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	16		 	14		 	 		 	45		 	42		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	$	192		 	$	193		 	 		 	$	575		 	$	544		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Decorative Architectural Products	 		 	 		 	 		 	 	 	 	 	 	
Net sales	$	553		 	$	536		 	3	 %	 	$	1,711		 	$	1,649		 	4	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	104		 	$	111		 	 	 	$	346		 	$	355		 	 	
Operating margin, as reported	18.8	%		20.7	%	 	 	 	20.2	%	 	21.5	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	4		 	4		 	 		 	12		 	12		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	$	108		 	$	115		 	 		 	$	358		 	$	367		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Cabinetry Products	 		 	 		 	 		 	 	 	 	 	 	
Net sales	$	229		 	$	239		 	(4	)%	 	$	711		 	$	736		 	(3	)%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	19		 	$	19		 	 		 	$	65		 	$	77		 	 	
Operating margin, as reported	8.3	%		7.9	%	 	 		 	9.1	%	 	10.5	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	—		 	—		 	 		 	2		 	4		 	 	
Accelerated depreciation related to rationalization activity	—		 	1		 	 		 	—		 	1		 	 	
Operating profit, as adjusted	19		 	20		 	 	 	67		 	82		 	 	
Operating margin, as adjusted	8.3	%	 	8.4	%	 	 	 	9.4	%	 	11.1	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	3		 	4		 	 		 	11		 	14		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	$	22		 	$	24		 	 		 	$	78		 	$	96		 	 	
 
Historical information is available on our website.

8

MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Nine Months Ended September 30, 2017 and 2016

(dollars in millions)

																						
 	Three Months Ended September 30,	 	 	 	Nine Months Ended September 30,	 	 	
 	2017	 	2016	 	Change	 	2017	 	2016	 	Change	
Windows and Other Specialty Products	 		 	 		 	 		 	 	 	 	 	 		
Net sales	$	203		 	$	203		 	—	%	 	$	585		 	$	578		 	1	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit (loss), as reported	$	23		 	$	(10	)	 	 		 	$	47		 	$	(9	)	 	 		
Operating margin, as reported	11.3	%		(4.9	)%	 	 		 	8.0	%	 	(1.6	)%	 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	5		 	6		 	 		 	16		 	16		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	$	28		 	$	(4	)	 	 		 	$	63		 	$	7		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
Total	 		 	 		 	 		 	 	 	 	 	 		
Net sales	$	1,936		 	$	1,877		 	3	%	 	$	5,770		 	$	5,598		 	3	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported - segment	$	321		 	$	294		 	 		 	$	987		 	$	914		 	 		
General corporate expense, net (GCE)	(26	)	 	(25	)	 	 		 	(82	)	 	(76	)	 	 		
Operating profit, as reported	295		 	269		 	 		 	905		 	838		 	 		
Operating margin, as reported	15.2	%	 	14.3	 %	 	 		 	15.7	%	 	15.0	 %	 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges - segment	—		 	5		 	 		 	2		 	15		 	 		
Accelerated depreciation - segment	1		 	1		 	 		 	1		 	1		 	 		
Operating profit, as adjusted	296		 	275		 	-$336,000,000	 	908		 	854		 	-$336,000,000	
Operating margin, as adjusted	15.3	%	 	14.7	 %	 	 	 	15.7	%	 	15.3	 %	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization - segment	28		 	28		 	 		 	84		 	84		 	 		
Depreciation and amortization - non-operating	2		 	5		 	 		 	10		 	15		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	$	326		 	$	308		 	 		 	$	1,002		 	$	953		 	 		
 
Historical information is available on our website.

9

MASCO CORPORATION
North American and International Data - Unaudited
For the Three Months and Nine Months Ended September 30, 2017 and 2016

(dollars in millions)

																						
 	Three Months Ended September 30,	 	 	 	Nine Months Ended September 30,	 	 	
 	2017		2016	 	Change	 	2017	 	2016	 	Change	
North American	 		 	 		 	 		 	 		 	 		 	 	
Net sales	$	1,529		 	$	1,497		 	2	%	 	$	4,600		 	$	4,445		 	3	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	266		 	$	235		 	 		 	$	835		 	$	749		 	 	
Operating margin, as reported	17.4	%	 	15.7	%	 	 		 	18.2	%	 	16.9	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	—		 	4		 	 		 	2		 	11		 	 	
Accelerated depreciation related to rationalization activity	1		 	1		 	 		 	1		 	1		 	 	
Operating profit, as adjusted	267		 	240		 	 		 	838		 	761		 	 	
Operating margin, as adjusted	17.5	%	 	16.0	%	 	 		 	18.2	%	 	17.1	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	18		 	19		 	 		 	56		 	57		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	$	285		 	$	259		 	 		 	$	894		 	$	818		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
International	 		 	 		 	 		 	 		 	 		 	 	
Net sales	$	407		 	$	380		 	7	%	 	$	1,170		 	$	1,153		 	1	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported	$	55		 	$	59		 	 		 	$	152		 	$	165		 	 	
Operating margin, as reported	13.5	%	 	15.5	%	 	 		 	13.0	%	 	14.3	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges	—		 	1		 	 		 	—		 	4		 	 	
Operating profit, as adjusted	55		 	60		 	 		 	152		 	169		 	 	
Operating margin, as adjusted	13.5	%	 	15.8	%	 	 		 	13.0	%	 	14.7	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	10		 	9		 	 		 	28		 	27		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	$	65		 	$	69		 	 		 	$	180		 	$	196		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Total	 		 	 		 	 		 	 		 	 		 	 	
Net sales	$	1,936		 	$	1,877		 	3	%	 	$	5,770		 	$	5,598		 	3	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit, as reported - segment	$	321		 	$	294		 	 		 	$	987		 	$	914		 	 	
General corporate expense, net (GCE)	(26	)	 	(25	)	 	 		 	(82	)	 	(76	)	 	 	
Operating profit, as reported	295		 	269		 	 		 	905		 	838		 	 	
Operating margin, as reported	15.2	%	 	14.3	%	 	 		 	15.7	%	 	15.0	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Rationalization charges - segment	—		 	5		 	 		 	2		 	15		 	 	
Accelerated depreciation - segment	1		 	1		 	 		 	1		 	1		 	 	
Operating profit, as adjusted	296		 	275		 	 		 	908		 	854		 	 	
Operating margin, as adjusted	15.3	%	 	14.7	%	 	 		 	15.7	%	 	15.3	%	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization - segment	28		 	28		 	 		 	84		 	84		 	 	
Depreciation and amortization - non-operating	2		 	5		 	 		 	10		 	15		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA, as adjusted	$	326		 	$	308		 	 		 	$	1,002		 	$	953		 	 	

Historical information is available on our website.

10