Q3 2015 Earnings Deck Final 2

Third Quarter Earnings

Presentation

October 27, 2015

Safe Harbor Statement

Statements contained in this presentation that reflect our views about our future performance constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements. Our future performance may be affected by our reliance on new home construction and home improvement, our reliance on key customers, the cost and availability of raw materials, uncertainty in the international economy, shifts in consumer preferences and purchasing practices, our ability to improve our underperforming businesses, our ability to maintain our competitive position in our industries, the timing and terms of our share repurchase program, and our ability to reduce corporate expense and simplify our organizational structure. We discuss many of the risks we face in Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Our forward-looking statements in this presentation speak only as of the date of this presentation. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

The Company believes that the non-GAAP performance measures and ratios that are contained herein, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company's reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company's filings with the Securities and Exchange Commission and is available on Masco's website at www.masco.com.

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http://www.masco.com/

Masco Q3 2015 Results

Topic

• Summary of Results Keith Allman

• Financial/Operations Review John Sznewajs

• Q&A

3

Q 3 2 0 1 5 I N R E V I E W

Improved Demand, Operating Leverage and Cost Control

Drove Performance

• Capitalized on improving end market demand

• Operating leverage and cost productivity drove profit

margin expansion

• Disciplined cost control despite underlying top line growth

• Cabinets accelerated its turnaround and positioned

business for disciplined growth

• 7.6 million shares repurchased

4

Driving

Performance


Topic



• Q&A

5

Strong Profitability Across All Segments

6

*See Appendix for GAAP reconciliation.

Quarter Highlights

• Total company sales increased 4% excluding the effects of foreign currency

translation

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

• FX negatively impacted sales by $66 million and profit by $10 million

($ in Millions)Third Quarter

2015

Revenue Y-O-Y Change

$1,839

0%

Operating Profit* Y-O-Y Change

$25716%

Operating Margin* Y-O-Y Change

14%190 bps

Adjusted EPS*Y-O-Y Change

$0.3426%

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

7

Retail and Trade Demand Drove Growth


2015


$8530%

Operating Profit*Y-O-Y Change

$138(2%)

Operating Margin*Y-O-Y Change

16.2%- 30 bps

Quarter Highlights

• North American sales increased 8% excluding the impact of Canadian

currency; International sales increased 4% in local currency

• FX negatively impacted sales by approximately $57 million and profit by $7

million

• Continued strong performance in retail and trade channels

• Commodity hedge negatively impacted operating profit by $9 million

*Excludes business rationalization charges for the third quarter 2015 of $1 million

D E C O R AT I V E A R C H I T E C T U R A L P R O D U C T S

8

Pro Paint Continues to Gain Momentum


2015


$527

1%

Operating ProfitY-O-Y Change

$10212%

Operating MarginY-O-Y Change

19.4%200 bps

Quarter Highlights

• Behr Pro and core DIY growth partially offset by promotion expense

• Realized low to mid-single digit gallon growth in the quarter

• Sourcing and lean initiatives drove profit growth

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

9

Business Turnaround Accelerating


2015


$253(5%)

Operating Profit* Y-O-Y Change

$19N/M

Operating Margin* Y-O-Y Change

7.5%1,010 bps

Quarter Highlights

• Strong retail sales offset by the exit of certain less profitable direct to builder

business

• KraftMaid® Vantage continued to perform in the dealer channel resulting in

positive mix

• Improved operating efficiencies drove substantial margin expansion

*Excludes business rationalization charges for the third quarter 2015 and 2014 of $1 million and $28 million, respectively and

gain from sale of property and equipment for the third quarter 2015 of $3 million

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

10

Strong Milgard Window Performance


2015


$206

8%

Operating ProfitY-O-Y Change

$2315%

Operating MarginY-O-Y Change

11.2%70 bps

Quarter Highlights

• Sales increased 11% excluding the effects of foreign currency translation

• North American windows delivered strong growth across all channels and

improved mix

Strong Balance Sheet and Disciplined Capital

Allocation

Liquidity as of 9/30/2015

Cash and cash investments $1.3B

Short-term bank deposits $0.2B

Total $1.5B

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Q3 2015 Accomplishments

• Repurchased approximately 7.6 million shares


Topic



• Q&A

12

Q&A

Appendix

Appendix – Profit Reconciliation – Third Quarter

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($ in Millions) Q3 2015 Q3 2014

Net Sales $ 1,839 $ 1,834

Gross Profit – As Reported $ 589 $ 522

Rationalization charges 1 28

Gain on sale of property and equipment (3) -

Gross Profit – As Adjusted $ 587 $ 550

Gross Margin - As Reported 32.0% 28.5%

Gross Margin - As Adjusted 31.9% 30.0%

Selling, General and Administrative Expenses – As Reported $ 331 $ 341


Selling, General and Administrative Expenses – As Adjusted $ 330 $ 328

Selling, General and Administrative Expenses as Percent of Net Sales – As Reported 18.0% 18.6%Selling, General and Administrative Expenses as Percent of Net Sales – As Adjusted 17.9% 17.9%

Operating Profit – As Reported $ 258 $ 181



Operating Profit – As Adjusted $ 257 $ 222

Operating Margin - As Reported 14.0% 9.9%

Operating Margin - As Adjusted 14.0% 12.1%

Appendix – EPS Reconciliation – Third Quarter

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(in Millions, Except per Common Share Data) Q3 2015 Q3 2014

Income from Continuing Operations before Income Taxes – As Reported $ 198 $ 131


Gains from financial investments, net (1) -


Income from Continuing Operations before Income Taxes – As Adjusted $ 196 $ 172

Tax at 36% rate (71) (62)

Less: Net income attributable to noncontrolling interest 10 13

Income from Continuing Operations, as adjusted $ 115 $ 97

Income per common share, as adjusted $ 0.34 $ 0.27

Average Diluted Shares Outstanding 338 353

($ in Millions) 2015 Estimate1 2014 Actual1

Rationalization Charges2, 3 ~ $14 $64

Tax Rate4 ~ 40% 34%

Interest Expense ~ $225 $225

General Corp. Expense5 ~ $100 $119

Capital Expenditures ~ $160 $115

Depreciation &

Amortization3

~ $130 $141

Shares Repurchased6 $400-500 $158

Shares Outstanding7 344 million 352 million

1. Guidance and 2014 results exclude TopBuild.

2. Based on 2015 business plans.

3. Includes accelerated depreciation of $1 million for the year ended December 31, 2014. Such expense is also included in the rationalization charges.

4. 2015 tax rate is impacted by an $18 million valuation allowance as a result of our decision to spin off TopBuild. 2014 tax rate excludes the $529 million

release of the valuation allowance.

5. Excludes rationalization expenses of $27 million for the year ended December 31, 2014 and $4 million (estimated) for the year ended December 31, 2015.

6. 2015 and 2014 share repurchases include approximately 720,000 and 1.7 million shares, respectively, to offset grants of long-term stock awards.

7. Reflects weighted average shares outstanding as of September 30, 2015 and assumes no further share repurchases in 2015.

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2015 Guidance Estimates

2014 Segment Mix*

R&R = % of sales to repair and remodel channels

NC = % of sales to new construction channels

NA = % of sales within North America

Int’l = % of sales outside North America

* Based on Company estimates; excludes TopBuild Corp.

Business Segment

PlumbingProducts

DecorativeArchitecturalProducts

$3.3B

$2.0B

Revenue 2014 % of Total

47%

29%

$ 7.0B 100%Total Company

Other SpecialtyProducts

$0.7B 10%

R&R% vs. NC NA% vs. Int’l

82% 59%

99% 100%

74% 74%

82% 77%

Cabinets andRelated Products

$1.0B 14% 55% 91%

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2014 International Revenue Split*

*Based on Company estimates; excludes TopBuild Corp.

International Sales Accounted for ~23%

of Total 2014 Masco Sales

28%

5%

10%

25%

9%

14%

9%

UK

Northern Europe

Southern Europe

Central Europe

Eastern Europe

Emerging markets

Other

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Investor Relations

Q3 2015 Earnings Deck Final 2