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 Masco Corporation Reports Fourth Quarter and 2016 Year-End Results
   Thursday, February 09, 2017 7:00:01 AM ET

--Sales for the fourth quarter increased 3 percent to $1.8 billion; in local currencies, sales increased 4 percent

--Gross margin improved to 32.6 percent from 31.0 percent

--Earnings per share for the quarter grew 36 percent to $0.30 per common share; adjusted earnings per share grew 14 percent to $0.33 per common share

--Repurchased 6.6 million shares for $207 million

Masco Corporation (MAS ), one of the world’s leading manufacturers of branded home improvement and building products, reported net sales and operating profit growth for the fourth quarter and full year of 2016.

2016 Fourth Quarter Commentary

-- On a reported basis, compared to fourth quarter 2015: -- Net sales from continuing operations increased 3 percent to $1.8 billion

-- In local currency, North American sales increased 3 percent and international sales increased 8 percent

-- Gross margin improved to 32.6 percent from 31.0 percent

-- Operating margin decreased to 12.2 percent from 12.4 percent, reflecting planned growth and incremental insurance costs

-- Income from continuing operations was $0.30 per common share compared to $0.22 per common share

-- Compared to fourth quarter 2015, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, were as follows: -- Gross margin improved to 32.8 percent compared to 31.3 percent

-- Operating margin decreased to 12.6 percent compared to 12.8 percent

-- Income from continuing operations was $0.33 per common share compared to $0.29 per common share

-- Liquidity at the end of the fourth quarter was approximately $1.2 billion

2016 Fourth Quarter Operating Segment Highlights

-- Plumbing Products’ net sales increased 5 percent (7 percent excluding the impact of foreign currency translation), driven by growth in North America and internationally

-- Decorative Architectural Products’ net sales increased 5 percent with strong volume growth partially offset by promotional activity

-- Cabinetry Products’ net sales decreased 8 percent (7 percent excluding the impact of foreign currency translation) due to the exit of lower margin business in the direct-to-builder channel, partially offset by growth in the retail and dealer channels and favorable product mix

-- Windows and Other Specialty Products’ net sales decreased 2 percent. Excluding the impact of foreign currency translation, net sales increased 2 percent, led by both our international and North American windows businesses

"We finished the year with good fourth quarter results," said Keith Allman, Masco’s President and CEO. "Our Plumbing Products segment had another record quarter on both the top and bottom lines, demonstrating the strength of our brands and our innovative products. Our Decorative Architectural Products segment posted solid 5 percent growth in the quarter, and we executed our planned investment to drive future profitable growth. Our Cabinetry Products segment continued its strategy of exiting certain direct-to-builder business, introducing new products, and driving growth with our market-leading Merillat(R) and KraftMaid(R) brands. We began to see improvements in the operations of our U.S. window business, and we continued our disciplined capital allocation by returning approximately $240 million to shareholders through share repurchases and dividends during the quarter."

2016 Full Year Key Highlights

-- Sales for the year increased 3 percent to $7.4 billion; in local currencies, sales increased 4 percent

-- Operating profit grew 15 percent to $1,053 million; adjusted operating profit grew 16 percent to $1,075 million

-- Operating profit margin for the year increased to 14.3 percent, a 150 basis point expansion; adjusted operating profit margin increased to 14.6 percent, a 160 basis point expansion

-- Earnings per share from continuing operations for the year grew 43 percent to $1.47 per common share; adjusted earnings per share from continuing operations grew 27 percent to $1.51 per common share

2016 Full Year Commentary

-- On a reported basis, compared to full year 2015: -- Net sales from continuing operations increased 3 percent to $7.4 billion

-- In local currency, North American sales increased 3 percent and international sales increased 6 percent

-- Gross margin improved to 33.4 percent from 31.5 percent

-- Operating margin increased to 14.3 percent from 12.8 percent

-- Income from continuing operations was $1.47 per common share compared to $1.03 per common share

-- Compared to full year 2015, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, were as follows: -- Gross margin improved to 33.6 percent compared to 31.6 percent

-- Operating margin increased to 14.6 percent compared to 13.0 percent

-- Income from continuing operations was $1.51 per common share compared to $1.19 per common share

-- Free cash flow was $535 million

"Masco delivered another strong year in 2016," said Allman. "We continued to execute against our long-term growth and capital allocation strategies that we established in 2015. We demonstrated our ability to capitalize on improving end markets by driving sales growth and expanding our operating margin. We successfully executed our plan to reduce leverage by paying down approximately $400 million in debt early in the year, further strengthening our balance sheet. Lastly, we generated a significant amount of free cash flow and continued our commitment to return capital to shareholders by increasing our dividend and repurchasing $459 million of our shares, enabling us to once again generate solid returns for our shareholders," continued Allman. "We will continue to execute our strategy and remain confident in our ability to drive growth and productivity as we move into 2017."

About Masco

Headquartered in Taylor, 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(R) paint; Delta(R) and Hansgrohe(R) faucets, bath and shower fixtures; KraftMaid(R) and Merillat(R) cabinets; Milgard(R) windows and doors; and Hot Spring(R) 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 2016 fourth quarter supplemental material, including a presentation in PDF format, is available on the Company’s website at www.masco.com.

Conference Call Details

A conference call regarding items contained in this release is scheduled for Thursday, February 9, 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 47955207. The conference call will be webcast simultaneously and in its entirety through the Company’s website. Shareholders, media representatives and others interested in Masco may participate in the webcast by registering through the Investor Relations section on the Company’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 47955207. The telephone replay will be available approximately two hours after the end of the call and continue through March 9, 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.

)

MASCO CORPORATION
Condensed Consolidated Statements of Operations - Unaudited
For the Three Months and Twelve Months Ended December 31, 2016
and 2015
 
                                                                                                                                                                                                                                     (in millions, except per common share data)
                                                                                                                                                                       
                                                                                                                                Three Months Ended                                                                                                  Twelve Months Ended
                                                                                                                                   December 31,                                                                                                        December 31,
                                                                                          -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                                          2016                                   2015                                                      2016                                   2015
                                                                                          -------------------------------------                     -------------------------------------                     -------------------------------------                     -------------------------------------
Net sales                                                                                       $   1,759                                                 $   1,715                                                 $   7,357                                                 $   7,142
Cost of sales                                                                                       1,186                                  1,183                                  4,901                                  4,889  
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Gross profit                                                                                        573                                                       532                                                     2,456                                                     2,253
                                                                                                                                                                                                                                                                         
Selling, general and administrative expenses                                                          358                                    320                                  1,403                                  1,339  
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Operating profit                                                                                    215                                                       212                                                     1,053                                                       914
                                                                                                                                                                                                                                                                         
Other income (expense), net:
Interest expense                                                                                      (43 )                                                     (54 )                                                    (229 )                                                    (225 )
Other, net                                                                                              1                                      2                                      6                         --  
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
                                                                                                      (42 )                                                     (52 )                                                    (223 )                                                    (225 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Income from continuing operations before income taxes                                               173                                                       160                                                       830                                                       689
                                                                                                                                                                                                                                                                         
Income tax expense                                                                                     67                                     74                                    296                                    293  
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Income from continuing operations                                                                   106                                                        86                                                       534                                                       396
                                                                                                                                                                                                                                                                         
Loss from discontinued operations, net                                                     --                                     (1 )                                          --                                     (2 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Net income                                                                                          106                                                        85                                                       534                                                       394
                                                                                                                                                                                                                                                                         
Less: Net income attributable to noncontrolling interest                                                8                                     10                                     43                                     39  
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Net income attributable to Masco Corporation                                                  $      98                              $      75                              $     491                              $     355  
                                                                                          ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                         
Income per common share attributable to Masco Corporation (diluted):
  Income from continuing operations                                                             $    0.30                                                 $    0.22                                                 $    1.47                                                 $    1.03
  Loss from discontinued operations, net                                                   --                         --                         --                                  (0.01 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Net income                                                                                    $    0.30                              $    0.22                              $    1.47                              $    1.02  
                                                                                          ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                         
Average diluted common shares outstanding                                                             323                                    335                                    330                                    341  
                                                                                          ====================================                      ====================================                      ====================================                      ====================================
                                                                                                                                                                                                                                                                         
Amounts attributable to Masco Corporation:
Income from continuing operations                                                               $      98                                                 $      76                                                 $     491                                                 $     357
Loss from discontinued operations, net                                                     --                                     (1 )                                          --                                     (2 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
  Net income                                                                                    $      98                              $      75                              $     491                              $     355  
                                                                                          ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================

Historical information is available on our website.

MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three Months and Twelve Months Ended December 31, 2016
and 2015
 
                                                                                                                                                                                                                                     (in millions, except per common share data)
                                                                                                                                                                     
                                                                                                                              Three Months Ended                                                                                                  Twelve Months Ended
                                                                                                                                 December 31,                                                                                                        December 31,
                                                                                        -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                                        2016                                   2015                                                      2016                                   2015
                                                                                        -------------------------------------                     -------------------------------------                     -------------------------------------                     -------------------------------------
Gross Profit, Selling, General and
Administrative Expenses, and Operating Profit Reconciliations
------------------------------------------------------------------
                                                                                                                                                                                                                                                                       
Net sales                                                                                     $   1,759                              $   1,715                              $   7,357                              $   7,142  
                                                                                        ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                       
Gross profit, as reported                                                                     $     573                                                 $     532                                                 $   2,456                                                 $   2,253
Rationalization charges                                                                               4                                                         6                                                        14                                                         8
(Gain) on sale of property and equipment                                                 --                                     (2 )                                          --                                     (5 )
                                                                                        ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Gross profit, as adjusted                                                                     $     577                              $     536                              $   2,470                              $   2,256  
                                                                                        ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                       
Gross margin, as reported                                                                          32.6                    %                                 31.0                    %                                 33.4                    %                                 31.5                    %
Gross margin, as adjusted                                                                          32.8                    %                                 31.3                    %                                 33.6                    %                                 31.6                    %
                                                                                                                                                                                                                                                                       
Selling, general and administrative expenses, as reported                                     $     358                                                 $     320                                                 $   1,403                                                 $   1,339
Rationalization charges                                                                               2                                      3                                      8                                     10  
                                                                                        ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Selling, general and administrative expenses, as adjusted                                     $     356                              $     317                              $   1,395                              $   1,329  
                                                                                        ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                       
Selling, general and administrative expenses as percent of net                                     20.4                    %                                 18.7                    %                                 19.1                    %                                 18.7                    %
sales, as reported
Selling, general and administrative expenses as percent of net                                     20.2                    %                                 18.5                    %                                 19.0                    %                                 18.6                    %
sales, as adjusted
                                                                                                                                                                                                                                                                       
Operating profit, as reported                                                                 $     215                                                 $     212                                                 $   1,053                                                 $     914
Rationalization charges                                                                               6                                                         9                                                        22                                                        18
(Gain) on sale of property and equipment                                                 --                                     (2 )                                          --                                     (5 )
                                                                                        ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Operating profit, as adjusted                                                                 $     221                              $     219                              $   1,075                              $     927  
                                                                                        ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                       
Operating margin, as reported                                                                      12.2                    %                                 12.4                    %                                 14.3                    %                                 12.8                    %
Operating margin, as adjusted                                                                      12.6                    %                                 12.8                    %                                 14.6                    %                                 13.0                    %
                                                                                                                                                                                                                                                                       
Earnings Per Common Share Reconciliation
------------------------------------------------------------------
                                                                                                                                                                                                                                                                       
Income from continuing operations before income taxes, as reported                            $     173                                                 $     160                                                 $     830                                                 $     689
Rationalization charges                                                                               6                                                         9                                                        22                                                        18
(Gain) on sale of property and equipment                                                 --                                                        (2 )                                          --                                                        (5 )
(Gain) from auction rate securities                                                                  (2 )                                          --                                                        (3 )                                          --
(Gains) from private equity funds, net                                                               (3 )                                                      (1 )                                                      (5 )                                                      (6 )
(Earnings) from equity investments, net                                                              (1 )                                          --                                                        (2 )                                                      (2 )
Loss from other investments                                                                           3                         --                                      3                         --  
                                                                                        ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Income from continuing operations before income taxes, as adjusted                                  176                                                       166                                                       845                                                       694
Tax at 36% rate                                                                                     (63 )                                                     (60 )                                                    (304 )                                                    (250 )
Less: Net income attributable to noncontrolling interest                                              8                                     10                                     43                                     39  
                                                                                        ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Income from continuing operations, as adjusted                                                $     105                              $      96                              $     498                              $     405  
                                                                                        ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                       
Income per common share, as adjusted                                                          $    0.33                              $    0.29                              $    1.51                              $    1.19  
                                                                                        ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                       
Average diluted common shares outstanding                                                           323                                    335                                    330                                    341  
                                                                                        ====================================                      ====================================                      ====================================                      ====================================

Historical information is available on our website.

MASCO CORPORATION
Condensed Consolidated Balance Sheets and
Other Financial Data - Unaudited
 
                                                                                                            (dollars in millions)
                                                                     
                                                                December 31,                                     December 31,
                                                                    2016                                             2015
                                                      ---------------------------------                     ----------------------
Balance Sheet
Assets
  Current Assets:
  Cash and cash investments                               $   990                                                    $      1,468
  Short-term bank deposits                                    201                                                             248
  Receivables                                                 917                                                             853
  Inventories                                                 712                                                             687
  Prepaid expenses and other                                  114                                           72
                                                      --------------------------------                      ----------------------
    Total Current Assets                                    2,934                                                           3,328
                                                                                                             
Property and equipment, net                                 1,060                                                           1,027
Goodwill                                                      832                                                             839
Other intangible assets, net                                  154                                                             160
Other assets                                                  157                                          310
                                                      --------------------------------                      ----------------------
    Total Assets                                          $ 5,137                                 $      5,664
                                                      ===== ===== ====================                      ========== ==========
                                                                                                             
Liabilities
Current Liabilities:
  Accounts payable                                        $   800                                                    $        749
  Notes payable                                                 2                                                           1,004
  Accrued liabilities                                         658                                          650
                                                      --------------------------------                      ----------------------
    Total Current Liabilities                               1,460                                                           2,403
                                                                                                             
Long-term debt                                              2,995                                                           2,403
Other liabilities                                             785                                          800
                                                      --------------------------------                      ----------------------
    Total Liabilities                                       5,240                                                           5,606
                                                                                                             
Equity                                                       (103 )                                                            58
                                                      --------------------------------                      ----------------------
    Total Liabilities and Equity                          $ 5,137                                 $      5,664
                                                      ===== ===== ====================                      ========== ==========
                                                                   As of
                                                               ---------------------------------------------------
                                                                December 31,     December 31,
                                                                    2016                                2015
                                                               ---------------                     ---------------
Other Financial Data
 Working Capital Days
  Receivable days                                                     49                                  46
  Inventory days                                                      54                                  52
  Payable days                                                        70                                  69
  Working capital                                                 $  829                              $  791
    Working capital as a % of sales (LTM)                           11.3 %                              11.1 %

Historical information is available on our website.

MASCO CORPORATION
Condensed Consolidated Statements of Cash Flows
and Other Financial Data - Unaudited
                                                                                                                                                             
                                                                                                                                                           (dollars in millions)
                                                              
                                                                                                                        Twelve Months Ended
                                                                                                                           December 31,
                                                                                  -----------------------------------------------------------------------------------------------
                                                                                                  2016                                   2015
                                                                                  -------------------------------------                     -------------------------------------
Cash Flows From (For) Operating Activities:
  Cash provided by operating activities                                                 $     814                                                 $     704
  Working capital changes                                                                     (88 )                                                      (5 )
                                                                                  ------------------------------------                      ------------------------------------
    Net cash from operating activities                                                        726                                    699  
                                                                                  ------------------------------------                      ------------------------------------
                                                                                                                                                             
Cash Flows From (For) Financing Activities:
  Retirement of notes                                                                      (1,300 )                                                    (500 )
  Purchase of Company common stock                                                           (459 )                                                    (456 )
  Cash dividends paid                                                                        (128 )                                                    (126 )
  Dividends paid to noncontrolling interest                                                   (31 )                                                     (36 )
  Cash distributed to TopBuild Corp.                                               --                                                       (63 )
  Issuance of TopBuild Corp. debt                                                  --                                                       200
  Issuance of notes, net of issuance costs                                                    889                                                       497
  Debt extinguishment costs                                                                   (40 )                                          --
  Issuance of Company common stock                                                              1                                                         2
  Excess tax benefit from stock-based compensation                                             23                                                        75
  Credit Agreement and other financing costs                                       --                                                        (3 )
  Decrease in debt, net                                                                        (1 )                                          --  
                                                                                  ------------------------------------                      ------------------------------------
    Net cash for financing activities                                                      (1,046 )                                                    (410 )
                                                                                  ------------------------------------                      ------------------------------------
                                                                                                                                                             
Cash Flows From (For) Investing Activities:
  Capital expenditures                                                                       (180 )                                                    (158 )
  Other, net                                                                                   56                                    (31 )
                                                                                  ------------------------------------                      ------------------------------------
    Net cash for investing activities                                                        (124 )                                                    (189 )
                                                                                  ------------------------------------                      ------------------------------------
                                                                                                                                                             
Effect of exchange rate changes on cash and cash investments                                  (34 )                                                     (15 )
                                                                                                                                                             
Cash and Cash Investments:
  (Decrease) increase for the period                                                         (478 )                                                      85
  At January 1                                                                              1,468                                  1,383  
                                                                                  ------------------------------------                      ------------------------------------
  At December 31                                                                        $     990                              $   1,468  
                                                                                  ======= ======= ====================                      ======= ======= ====================
                                                           As of
                                               -------------------------------------------------------------------
                                                         December 31,             December 31,
                                                             2016                                        2015
                                               --------------------------------                     --------------
Liquidity
Cash and cash investments                         $   990                                                $  1,468
Short-term bank deposits                              201                                  248
                                               -------------------------------                      --------------
  Total Liquidity                                 $ 1,191                             $  1,716
                                               ==== ===== ====================                      ====== ======

Historical information is available on our website.

MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Twelve Months Ended December 31, 2016
and 2015
 
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                                                       
                                                                                                 Three Months Ended                                                                                                                       Twelve Months Ended
                                                                                                    December 31,                                                                                                                             December 31,
                                                               --------------------------------------------------------------------------------------                                                  ----------------------------------------------------------------------------------------
                                                                               2016                               2015                                  Change                                      2016                                2015                                         Change
                                                               -------------------------------------                     ----------------------------                     --------                     -------------------------------------                     ------------------------------
Plumbing Products
 Net sales                                                           $     891                         $ 846                          5   %                            $   3,526                         $ 3,341                                 6      %
                                                               ======= ======= ====================                      == === ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                     
 Operating profit, as reported                                       $     151                                            $ 126                                                                              $     642                                            $   512
   Operating margin, as reported                                          16.9                    %                        14.9                    %                                                              18.2                    %                          15.3                    %
                                                                                                                                                                                                                                                                                                                     
 Rationalization charges                                                     2                             7                                                                  13                               9  
                                                               ------------------------------------                      ---------------------------                                                   ------------------------------------                      -----------------------------
 Operating profit, as adjusted                                             153                                              133                                                                                    655                                                521
   Operating margin, as adjusted                                          17.2                    %                        15.7                    %                                                              18.6                    %                          15.6                    %
                                                                                                                                                                                                                                                                                                                     
 Depreciation and amortization                                              15                            14                                                                  57                              56  
                                                               ------------------------------------                      ---------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                     
 EBITDA, as adjusted                                                 $     168                         $ 147                                                           $     712                         $   577  
                                                               ======= ======= ====================                      == === ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                     
Decorative Architectural Products
 Net sales                                                           $     443                         $ 420                          5   %                            $   2,092                         $ 2,020                                 4      %
                                                               ======= ======= ====================                      == === ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                     
 Operating profit, as reported                                       $      75                                            $  85                                                                              $     430                                            $   403
   Operating margin, as reported                                          16.9                    %                        20.2                    %                                                              20.6                    %                          20.0                    %
                                                                                                                                                                                                                                                                                                                     
 Depreciation and amortization                                               4                             4                                                                  16                              16  
                                                               ------------------------------------                      ---------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                     
 EBITDA                                                              $      79                         $  89                                                           $     446                         $   419  
                                                               ======= ======= ====================                      == === ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                     
Cabinetry Products
 Net sales                                                           $     234                         $ 254                         (8 )%                             $     970                         $ 1,025                                (5 )%
                                                               ======= ======= ====================                      == === ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                     
 Operating profit, as reported                                       $      16                                            $  19                                                                              $      93                                            $    51
   Operating margin, as reported                                           6.8                    %                         7.5                    %                                                               9.6                    %                           5.0                    %
                                                                                                                                                                                                                                                                                                                     
 Rationalization charges                                                     3                                                2                                                                                      8                                                  5
 (Gain) on sale of property and equipment                       --                            (2 )                                                                       --                              (5 )
                                                               ------------------------------------                      ---------------------------                                                   ------------------------------------                      -----------------------------
 Operating profit, as adjusted                                              19                                               19                                                                                    101                                                 51
   Operating margin, as adjusted                                           8.1                    %                         7.5                    %                                                              10.4                    %                           5.0                    %
                                                                                                                                                                                                                                                                                                                     
 Depreciation and amortization                                               6                             6                                                                  21                              24  
                                                               ------------------------------------                      ---------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                     
 EBITDA, as adjusted                                                 $      25                         $  25                                                           $     122                         $    75  
                                                               ======= ======= ====================                      == === ====================                                                   ======= ======= ====================                      == ===== ====================

Historical information is available on our website.

MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Twelve Months Ended December 31, 2016
and 2015
 
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                                                                             
                                                                                                           Three Months Ended                                                                                                                               Twelve Months Ended
                                                                                                              December 31,                                                                                                                                     December 31,
                                                                     -----------------------------------------------------------------------------------------------                                                  -----------------------------------------------------------------------------------------------
                                                                                     2016                                   2015                                       Change                                      2016                                   2015                                             Change
                                                                     -------------------------------------                     -------------------------------------                     --------                     -------------------------------------                     -------------------------------------                     ---------------------
Windows and Other Specialty Products
  Net sales                                                                $     191                              $     195                         (2 )%                             $     769                              $     756                                 2      %
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                           
  Operating profit (loss), as reported                                     $       6                                                 $       7                                                                              $      (3 )                                               $      57
      Operating margin, as reported                                              3.1                    %                                  3.6                    %                                                              (0.4                   )%                                  7.5                    %
                                                                                                                                                                                                                                                                                                                                           
  Rationalization charges                                                          1                         --                                                                   1                         --  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
  Operating profit (loss), as adjusted                                             7                                                         7                                                                                     (2 )                                                      57
      Operating margin, as adjusted                                              3.7                    %                                  3.6                    %                                                              (0.3                   )%                                  7.5                    %
                                                                                                                                                                                                                                                                                                                                           
  Depreciation and amortization                                                    5                                      5                                                                  21                                     18  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                                           
  EBITDA, as adjusted                                                      $      12                              $      12                                                           $      19                              $      75  
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                           
Total
  Net sales                                                                $   1,759                              $   1,715                          3   %                            $   7,357                              $   7,142                                 3      %
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                           
  Operating profit, as reported - segment                                  $     248                                                 $     237                                                                              $   1,162                                                 $   1,023
    General corporate expense, net (GCE)                                         (33 )                                                     (25 )                                                                                 (109 )                                                    (109 )
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
  Operating profit, as reported                                                  215                                                       212                                                                                  1,053                                                       914
      Operating margin, as reported                                             12.2                    %                                 12.4                    %                                                              14.3                    %                                 12.8                    %
                                                                                                                                                                                                                                                                                                                                           
    Rationalization charges - segment                                              6                                                         9                                                                                     22                                                        14
    Rationalization charges - GCE                                     --                                            --                                                                         --                                                         4
    (Gain) on sale of property and equipment                          --                                     (2 )                                                                       --                                     (5 )
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
  Operating profit, as adjusted                                                  221                                                       219                                                                                  1,075                                                       927
      Operating margin, as adjusted                                             12.6                    %                                 12.8                    %                                                              14.6                    %                                 13.0                    %
                                                                                                                                                                                                                                                                                                                                           
  Depreciation and amortization - segment                                         30                                                        29                                                                                    115                                                       114
  Depreciation and amortization - non-operating                                    4                                      4                                                                  19                                     13  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                                           
  EBITDA, as adjusted                                                      $     255                              $     252                                                           $   1,209                              $   1,054  
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================

Historical information is available on our website.

MASCO CORPORATION
North American and International Data - Unaudited
For the Three Months and Twelve Months Ended December 31, 2016
and 2015
 
                                                                                                                                                                                                                                     (dollars in millions)
                                                                                                                                                                                                                                                      
                                                                                                           Three Months Ended                                                                                                                            Twelve Months Ended
                                                                                                              December 31,                                                                                                                                  December 31,
                                                                     -----------------------------------------------------------------------------------------------                                                  ----------------------------------------------------------------------------------------
                                                                                     2016                                   2015                                       Change                                      2016                                2015                                         Change
                                                                     -------------------------------------                     -------------------------------------                     --------                     -------------------------------------                     ------------------------------                     ---------------------
North American
  Net sales                                                                $   1,389                              $   1,347                          3   %                            $   5,834                         $ 5,645                                 3      %
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                    
  Operating profit, as reported                                            $     212                                                 $     196                                                                              $     961                                            $   841
      Operating margin, as reported                                             15.3                    %                                 14.6                    %                                                              16.5                    %                          14.9                    %
                                                                                                                                                                                                                                                                                                                                    
  Rationalization charges                                                          3                                                         6                                                                                     15                                                 10
  (Gain) on sale of property and equipment                            --                                     (2 )                                                                       --                              (5 )
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as adjusted                                                  215                                                       200                                                                                    976                                                846
      Operating margin, as adjusted                                             15.5                    %                                 14.8                    %                                                              16.7                    %                          15.0                    %
                                                                                                                                                                                                                                                                                                                                    
  Depreciation and amortization                                                   20                                     20                                                                  78                              78  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                                    
  EBITDA, as adjusted                                                      $     235                              $     220                                                           $   1,054                         $   924  
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                    
International
  Net sales                                                                $     370                              $     368                          1   %                            $   1,523                         $ 1,497                                 2      %
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                    
  Operating profit, as reported                                            $      36                                                 $      41                                                                              $     201                                            $   182
      Operating margin, as reported                                              9.7                    %                                 11.1                    %                                                              13.2                    %                          12.2                    %
                                                                                                                                                                                                                                                                                                                                    
  Rationalization charges                                                          3                                      3                                                                   7                               4  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as adjusted                                                   39                                                        44                                                                                    208                                                186
     Operating margin, as adjusted                                              10.5                    %                                 12.0                    %                                                              13.7                    %                          12.4                    %
                                                                                                                                                                                                                                                                                                                                    
  Depreciation and amortization                                                   10                                      9                                                                  37                              36  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                                    
  EBITDA, as adjusted                                                      $      49                              $      53                                                           $     245                         $   222  
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                    
Total
  Net sales                                                                $   1,759                              $   1,715                          3   %                            $   7,357                         $ 7,142                                 3      %
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                    
  Operating profit, as reported - segment                                  $     248                                                 $     237                                                                              $   1,162                                            $ 1,023
    General corporate expense, net (GCE)                                         (33 )                                                     (25 )                                                                                 (109 )                                             (109 )
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as reported                                                  215                                                       212                                                                                  1,053                                                914
      Operating margin, as reported                                             12.2                    %                                 12.4                    %                                                              14.3                    %                          12.8                    %
                                                                                                                                                                                                                                                                                                                                    
    Rationalization charges - segment                                              6                                                         9                                                                                     22                                                 14
    Rationalization charges - GCE                                     --                                            --                                                                         --                                                  4
    (Gain) on sale of property and equipment                          --                                     (2 )                                                                       --                              (5 )
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as adjusted                                                  221                                                       219                                                                                  1,075                                                927
      Operating margin, as adjusted                                             12.6                    %                                 12.8                    %                                                              14.6                    %                          13.0                    %
                                                                                                                                                                                                                                                                                                                                    
  Depreciation and amortization - segment                                         30                                                        29                                                                                    115                                                114
  Depreciation and amortization - non-operating                                    4                                      4                                                                  19                              13  
                                                                     ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                                    
  EBITDA, as adjusted                                                      $     255                              $     252                                                           $   1,209                         $ 1,054  
                                                                     ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================

Historical information is available on our website.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170209005165r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170209005165/en/

SOURCE: Masco Corporation

Investor Contact 
Masco Corporation 
David Chaika 
Vice President, Treasurer and Investor Relations 
313.792.5500 
david_chaika@mascohq.com


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