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Masco Corp.$38.09($.54)(1.40%)

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 Masco Corporation Reports Fourth Quarter and 2017 Year-End Results
   Thursday, February 08, 2018 7:00:02 AM ET

--Sales for the fourth quarter increased 7 percent to $1.9 billion; in local currency, sales increased 5 percent

--Operating profit for the quarter grew 23 percent to $264 million; adjusted operating profit grew 20 percent to $265 million

--Earnings per share for the quarter decreased 10 percent to $0.27 per share; adjusted earnings per share grew 33 percent to $0.44 per share

--Completed the acquisition of Mercury Plastics, Inc. and signed a definitive agreement to acquire The L.D. Kichler Co. for combined expected purchase price of approximately $640 million

--Anticipate 2018 earnings per share to be in the range of $2.36 - $2.51 per share, and on an adjusted basis to be in the range of $2.48 - $2.63 per share

Masco Corporation (MAS ), one of the world’s leading manufacturers of branded home improvement and building products, reported strong net sales and operating profit growth for the fourth quarter and full year of 2017.

2017 Fourth Quarter Commentary

-- On a reported basis, compared to fourth quarter 2016: -- Net sales increased 7 percent to $1.9 billion; in local currency, net sales increased 5 percent

-- In local currency, North American sales increased 5 percent and international sales increased 3 percent

-- Gross margin improved to 32.9 percent from 32.6 percent

-- Operating margin increased 190 basis points to 14.1 percent from 12.2 percent

-- Net income was $0.27 per share compared to $0.30 per share

-- Compared to fourth quarter 2016, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 34 percent (36 percent in 2016), were as follows: -- Gross margin improved to 32.9 percent compared to 32.8 percent

-- Operating margin increased to 14.1 percent compared to 12.6 percent

-- Net income was $0.44 per share compared to $0.33 per share

-- Liquidity at the end of the fourth quarter was approximately $1.3 billion

2017 Fourth Quarter Operating Segment Highlights

-- Plumbing Products’ net sales increased 9 percent (6 percent excluding the impact of foreign currency translation), driven by growth in North America and internationally

-- Decorative Architectural Products’ net sales increased 12 percent, driven by strong volume growth in both coatings and builders’ hardware

-- Cabinetry Products’ net sales decreased 5 percent; excluding the impact of the divestiture of UK-based Moores Furniture Group in the fourth quarter, net sales decreased 1 percent

-- Windows and Other Specialty Products’ net sales decreased 3 percent; excluding the impact of the divestiture of Arrow Fastener in the second quarter, net sales increased 6 percent, driven by net selling price increases at our North American windows business

"We finished 2017 with a great fourth quarter," said Keith Allman, Masco’s President and CEO. "Our Plumbing Products and Decorative Architectural Products segments delivered strong top- and bottom-line growth. Additionally, we closed on the acquisition of Mercury Plastics, Inc. in our Plumbing Products segment, and reached an agreement to acquire The L.D. Kichler Co."

2017 Full Year Key Highlights

-- Sales for the year increased 4 percent to $7.6 billion; in local currency, sales increased 4 percent

-- Operating profit grew 11 percent to $1,169 million; adjusted operating profit grew 9 percent to $1,173 million

-- Operating profit margin for the year increased to 15.3 percent, a 100 basis point expansion; adjusted operating profit margin increased to 15.3 percent, a 70 basis point expansion

-- Earnings per share for the year grew 13 percent to $1.66 per share; adjusted earnings per share grew 28 percent to $1.94 per share

2017 Full Year Commentary

-- On a reported basis, compared to full year 2016: -- Net sales increased 4 percent to $7.6 billion

-- In local currency, both North American and international sales increased 4 percent

-- Gross margin improved to 34.2 percent from 33.4 percent

-- Operating margin increased to 15.3 percent from 14.3 percent

-- Net income was $1.66 per share compared to $1.47 per share

-- Compared to full year 2016, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 34 percent (36 percent in 2016), were as follows: -- Gross margin improved to 34.2 percent compared to 33.6 percent

-- Operating margin increased to 15.3 percent compared to 14.6 percent

-- Net income was $1.94 per share compared to $1.51 per share

-- Free cash flow was $564 million

"We had another good year in 2017 as we continued to execute against the long-term growth and capital allocation strategies that we established in 2015," said Allman. "Our Plumbing Products segment achieved another year of top- and bottom-line growth, and our Decorative Architectural Products segment continued to grow its successful pro paint initiative. Cabinetry Products grew its KraftMaid(R) brand in the repair and remodel market, and late in the fourth quarter, we began setting a new retail program with our Cardell(R) cabinetry brand. I am also pleased with the progress we made in our Windows and Other Specialty Products segment, as we delivered a $54 million improvement in adjusted operating profit in 2017. Lastly, we continued our commitment to deploy capital to create shareholder value by increasing our dividend for the fourth year in a row, repurchasing $331 million in shares, and committing approximately $640 million to acquisitions."

"As we look towards 2018, we believe we are well positioned to drive profitable growth and create shareholder value by continuing to execute on our strategies," continued Allman. "The fundamentals of our industry remain strong, and with the momentum we have across our segments, the anticipated benefits of the recent tax reform legislation, and the expected accretion of our two acquisitions, we anticipate our adjusted earnings per share to be in the range of $2.48 to $2.63 for 2018."

About Masco

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

The 2017 fourth quarter and full year 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 8, 2018 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 3391036. 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 3391036. The telephone replay will be available approximately two hours after the end of the call and continue through March 10, 2018.

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 residential repair and remodel activity and new home construction, our ability to maintain our strong brands and reputation and to develop new products, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of raw materials, our dependence on third-party suppliers, risks associated with international operations and global strategies, our ability to achieve the anticipated benefits of our strategic initiatives, our ability to successfully execute our acquisition strategy and integrate businesses that we have and may acquire, our ability to attract, develop and retain talented personnel, our ability to achieve the anticipated benefits from our investments in new technology, risks associated with our reliance on information systems and technology, and our ability to sustain the improved results of our U.S. window business. These and other factors are discussed in detail in Item 1A, "Risk Factors" in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Any forward-looking statement made by us speaks only as of the date on which it was made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

 
MASCO CORPORATION
Condensed Consolidated Statements of Operations - Unaudited
For the Three Months and Twelve Months Ended December 31, 2017
and 2016
 
                                                                                                                                                                                                                                     (in millions, except per common share data)
 
                                                                                                           Three Months Ended                                                                           Twelve Months Ended
                                                                                                                                 December 31,                                                                                                    December 31,
                                                                                          -------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------
                                                                                                         2017                                 2016                                                    2017                                 2016
                                                                                          -----------------------------------                     -----------------------------------                     -----------------------------------                     -----------------------------------
Net sales                                                                                      $  1,874                                                $  1,759                                                $  7,644                                                $  7,357
Cost of sales                                                                                     1,258                                1,186                                5,033                                4,901  
                                                                                          ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
 Gross profit                                                                                       616                                                     573                                                   2,611                                                   2,456
                                                                                                                                                                                                                                                                   
Selling, general and administrative expenses                                                        352                                  358                                1,442                                1,403  
                                                                                          ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
 Operating profit                                                                                   264                                                     215                                                   1,169                                                   1,053
                                                                                                                                                                                                                                                                   
Other income (expense), net:
Interest expense                                                                                    (39 )                                                   (43 )                                                  (278 )                                                  (229 )
Other, net                                                                                          (64 )                                                     1                                   (6 )                                                     6  
                                                                                          ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
                                                                                                   (103 )                                                   (42 )                                                  (284 )                                                  (223 )
                                                                                          ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
 Income before income taxes                                                                         161                                                     173                                                     885                                                     830
                                                                                                                                                                                                                                                                   
Income tax expense                                                                                   62                                   67                                  305                                  296  
                                                                                          ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
 Net income                                                                                          99                                                     106                                                     580                                                     534
                                                                                                                                                                                                                                                                   
Less: Net income attributable to noncontrolling interest                                             12                                    8                                   47                                   43  
                                                                                          ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
 Net income attributable to Masco Corporation                                                  $     87                             $     98                             $    533                             $    491  
                                                                                          ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================
                                                                                                                                                                                                                                                                   
Income per common share attributable to Masco Corporation (diluted):                                                                                                                                      
                                                                                          -----------------------------------                     -----------------------------------                     -----------------------------------                     -----------------------------------
 Net income                                                                                    $   0.27                             $   0.30                             $   1.66                             $   1.47  
                                                                                          ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================                      ====== ====== ====================
                                                                                                                                                                                                                                                                   
Average diluted common shares outstanding                                                           314                                  323                                  318                                  330  
                                                                                          ==================================                      ==================================                      ==================================                      ==================================

Historical information is available on our website.

 
MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three Months and Twelve Months Ended December 31, 2017
and 2016
 
                                                                                                                                                                                                                                     (dollars in millions)
 
                                                                                                    Three Months Ended                                                                               Twelve Months Ended
                                                                                                                          December 31,                                                                                                        December 31,
                                                                                    -----------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------
                                                                                                    2017                                2016                                                   2017                                      2016
                                                                                    -------------------------------------                     -------------------------------                     ------------------------------------                     --------------------------------------------
Gross Profit, Selling, General and
Administrative Expenses, and Operating Profit Reconciliations
--------------------------------------------------------------
                                                                                                                                                                                                                                                            
Net sales                                                                                 $   1,874                          $ 1,759                           $     7,644                            $ 7,357  
                                                                                    ======= ======= ====================                      === ===== ====================                      ==== ==============================                      ===== ===== ================================
                                                                                                                                                                                                                                                            
Gross profit, as reported                                                                 $     616                                             $   573                                              $     2,611                                               $ 2,456
Rationalization charges                                                                           1                                4                                     4                                 14  
                                                                                    ------------------------------------                      ------------------------------                      -----------------------------------                      --------------------------------------------
Gross profit, as adjusted                                                                 $     617                          $   577                           $     2,615                            $ 2,470  
                                                                                    ======= ======= ====================                      === ===== ====================                      ==== ==============================                      ===== ===== ================================
                                                                                                                                                                                                                                                            
Gross margin, as reported                                                                      32.9 %                                              32.6 %                                                   34.2                    %                             33.4 %
Gross margin, as adjusted                                                                      32.9 %                                              32.8 %                                                   34.2                    %                             33.6 %
                                                                                                                                                                                                                                                            
Selling, general and administrative expenses, as reported                                 $     352                                             $   358                                              $     1,442                                               $ 1,403
Rationalization charges                                                              --                                2                        --                                  8  
                                                                                    ------------------------------------                      ------------------------------                      -----------------------------------                      --------------------------------------------
Selling, general and administrative expenses, as adjusted                                 $     352                          $   356                           $     1,442                            $ 1,395  
                                                                                    ======= ======= ====================                      === ===== ====================                      ==== ==============================                      ===== ===== ================================
                                                                                                                                                                                                                                                            
Selling, general and administrative expenses as percent of net                                 18.8 %                                              20.4 %                                                   18.9 %                                                19.1 %
sales, as reported
Selling, general and administrative expenses as percent of net                                 18.8 %                                              20.2 %                                                   18.9 %                                                19.0 %
sales, as adjusted
                                                                                                                                                                                                                                                            
Operating profit, as reported                                                             $     264                                             $   215                                              $     1,169                                               $ 1,053
Rationalization charges                                                                           1                                6                                     4                                 22  
                                                                                    ------------------------------------                      ------------------------------                      -----------------------------------                      --------------------------------------------
Operating profit, as adjusted                                                             $     265                          $   221                           $     1,173                            $ 1,075  
                                                                                    ======= ======= ====================                      === ===== ====================                      ==== ==============================                      ===== ===== ================================
                                                                                                                                                                                                                                                            
Operating margin, as reported                                                                  14.1 %                                              12.2 %                                                   15.3 %                                                14.3 %
Operating margin, as adjusted                                                                  14.1 %                                              12.6 %                                                   15.3 %                                                14.6 %
                                                                                                                                                                                                   
                                                                                                                                                                                                                                           Twelve Months Ended
                                                                                                                                                                                                                                            December 31, 2017
                                                                                                                                                                                                  -----------------------------------------------------------------------------------------------------
Free Cash Flow Reconciliation
--------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                   
Cash from Operations                                                                                                                                                                                      $                                                                   751
Capital expenditures                                                                                                                                                                                                                                                         (173 )
Displays                                                                                                                                                                                                                                                                      (14 )
                                                                                                                                                                                                  ----------------------------------------------------------------------------------------------------
Free Cash Flow                                                                                                                                                                                            $                                                                   564  
                                                                                                                                                                                                  ====================================================================================================

Historical information is available on our website.

 
MASCO CORPORATION
Exhibit A: Reconciliations - Unaudited
For the Three Months and Twelve Months Ended December 31, 2017
and 2016
 
                                                                                                                                                                                                                                     (in millions, except per common share data)
 
                                                                                                 Three Months Ended                                                                               Twelve Months Ended
                                                                                                                       December 31,                                                                                                        December 31,
                                                                              -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                              2017                                   2016                                                      2017                                   2016
                                                                              -------------------------------------                     -------------------------------------                     -------------------------------------                     -------------------------------------
Income Per Common Share Reconciliation
--------------------------------------------------------
                                                                                                                                                                                                                                                             
Income before income taxes, as reported                                             $     161                                                 $     173                                                 $     885                                                 $     830
Rationalization charges                                                                     1                                                         6                                                         4                                                        22
(Gain) from auction rate securities                                            --                                                        (2 )                                          --                                                        (3 )
(Gains) from private equity funds, net                                                     (1 )                                                      (3 )                                                      (3 )                                                      (5 )
(Earnings) from equity investments, net                                        --                                                        (1 )                                                      (1 )                                                      (2 )
Impairment of private equity funds                                             --                                            --                                                         2                                            --
Loss on extinguishment of debt                                                 --                                            --                                                       107                                            --
Loss on sales of businesses, net                                                           64                                            --                                                        13                                            --
Loss from other investments                                                    --                                      3                         --                                      3  
                                                                              ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Income before income taxes, as adjusted                                                   225                                                       176                                                     1,007                                                       845
Tax at 34% rate (36% for 2016)                                                            (76 )                                                     (63 )                                                    (342 )                                                    (304 )
Less: Net income attributable to noncontrolling interest                                   12                                      8                                     47                                     43  
                                                                              ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Net income, as adjusted                                                             $     137                              $     105                              $     618                              $     498  
                                                                              ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                             
Net income per common share, as adjusted                                            $    0.44                              $    0.33                              $    1.94                              $    1.51  
                                                                              ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                             
Average diluted common shares outstanding                                                 314                                    323                                    318                                    330  
                                                                              ====================================                      ====================================                      ====================================                      ====================================
                                                                 
Outlook for the Twelve Months Ended December 31, 2018
                                                                                                                                                                                                               Twelve Months Ended
                                                                                                                                                                                                                December 31, 2018
                                                                                                                                                                                    -------------------------------------------------------------------------
                                                                                                                                                                                                Low End                    High End
                                                                                                                                                                                    ------------------------------                     ----------------------
Income Per Common Share Reconciliation
-----------------------------------------------------
                                                                                                                                                                                                                                        
Net income per common share                                                                                                                                                           $ 2.36                                                    $       2.51
Rationalization charges                                                                                                                                                                 0.01                                                            0.01
Kichler inventory purchase accounting adjustment                                                                                                                                        0.08                                                            0.08
Allocation to participating securities per share (1)                                                                                                                                    0.03                                         0.03
                                                                                                                                                                                    -----------------------------                      ----------------------
Net income per common share, as adjusted                                                                                                                                              $ 2.48                                 $       2.63
                                                                                                                                                                                    === ==== ====================                      ========== ==========

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

Historical information is available on our website.

 
MASCO CORPORATION
Condensed Consolidated Balance Sheets and Other Financial Data
- Unaudited
December 31, 2017 and 2016
 
                                                                                                                                      (dollars in millions)
 
                                                         December 31,                         December 31,
                                                                                2017                                                    2016
                                                                 -----------------------------------                     -----------------------------------
Balance Sheet
  Assets
  Current Assets:
    Cash and cash investments                                         $  1,194                                                $    990
    Short-term bank deposits                                               108                                                     201
    Receivables                                                          1,021                                                     917
    Inventories                                                            796                                                     712
    Prepaid expenses and other                                              96                                  114  
                                                                 ----------------------------------                      ----------------------------------
      Total Current Assets                                               3,215                                                   2,934
                                                                                                                          
  Property and equipment, net                                            1,129                                                   1,060
  Goodwill                                                                 841                                                     832
  Other intangible assets, net                                             187                                                     154
  Other assets                                                             116                                  157  
                                                                 ----------------------------------                      ----------------------------------
      Total Assets                                                    $  5,488                             $  5,137  
                                                                 ====== ====== ====================                      ====== ====== ====================
                                                                                                                          
  Liabilities
  Current Liabilities:
    Accounts payable                                                  $    824                                                $    800
    Notes payable                                                          116                                                       2
    Accrued liabilities                                                    688                                  658  
                                                                 ----------------------------------                      ----------------------------------
      Total Current Liabilities                                          1,628                                                   1,460
                                                                                                                          
  Long-term debt                                                         2,969                                                   2,995
  Other liabilities                                                        715                                  785  
                                                                 ----------------------------------                      ----------------------------------
      Total Liabilities                                                  5,312                                                   5,240
                                                                                                                          
  Equity                                                                   176                                 (103 )
                                                                 ----------------------------------                      ----------------------------------
      Total Liabilities and Equity                                    $  5,488                             $  5,137  
                                                                 ====== ====== ====================                      ====== ====== ====================
                                                                  
                                                                                                            As of
                                                                 -------------------------------------------------------------------------------------------
                                                                            December 31,                                            December 31,
                                                                                2017                                                    2016
                                                                 -----------------------------------                     -----------------------------------
Other Financial Data
  Working Capital Days
    Receivable days                                                         51                                                      49
    Inventory days                                                          59                                                      54
    Payable days                                                            72                                                      70
    Working capital                                                   $    993                                                $    829
      Working capital as a % of sales (LTM)                               13.0 %                                                  11.3 %

Historical information is available on our website.

 
MASCO CORPORATION
Condensed Consolidated Statements of Cash Flows and Other
Financial Data - Unaudited
For the Twelve Months Ended December 31, 2017 and 2016
 
                                                                                                                                                                          (in millions)
 
                                                                                                            Twelve Months Ended
                                                                                                                                  December 31,
                                                                                         -----------------------------------------------------------------------------------------------
                                                                                                         2017                                   2016
                                                                                         -------------------------------------                     -------------------------------------
Cash Flows From (For) Operating Activities:
 Cash provided by operating activities                                                         $     901                                                 $     877
 Working capital changes                                                                            (150 )                                                     (88 )
                                                                                         ------------------------------------                      ------------------------------------
   Net cash from operating activities                                                                751                                    789  
                                                                                         ------------------------------------                      ------------------------------------
                                                                                                                                                    
Cash Flows From (For) Financing Activities:
 Retirement of notes                                                                                (535 )                                                  (1,300 )
 Purchase of Company common stock                                                                   (331 )                                                    (459 )
 Cash dividends paid                                                                                (129 )                                                    (128 )
 Dividends paid to noncontrolling interest                                                           (35 )                                                     (31 )
 Issuance of notes, net of issuance costs                                                            593                                                       889
 Debt extinguishment costs                                                                          (104 )                                                     (40 )
 Issuance of Company common stock                                                         --                                                         1
 Employee withholding taxes paid on stock-based compensation                                         (33 )                                                     (40 )
 Decrease in debt, net                                                                                (3 )                                                      (1 )
                                                                                         ------------------------------------                      ------------------------------------
   Net cash for financing activities                                                                (577 )                                                  (1,109 )
                                                                                         ------------------------------------                      ------------------------------------
                                                                                                                                                    
Cash Flows From (For) Investing Activities:
 Capital expenditures                                                                               (173 )                                                    (180 )
 Acquisition of businesses, net of cash acquired                                                     (89 )                                          --
 Proceeds from disposition of businesses, net of cash disposed                                       128                                            --
 Proceeds from disposition of short-term bank deposits, net of cash                                  112                                                        40
 purchases
 Other, net                                                                                           (3 )                                                      16  
                                                                                         ------------------------------------                      ------------------------------------
   Net cash for investing activities                                                                 (25 )                                                    (124 )
                                                                                         ------------------------------------                      ------------------------------------
                                                                                                                                                    
Effect of exchange rate changes on cash and cash investments                                          55                                                       (34 )
                                                                                                                                                    
Cash and Cash Investments:
 Increase (decrease) for the period                                                                  204                                                      (478 )
 At January 1                                                                                        990                                  1,468  
                                                                                         ------------------------------------                      ------------------------------------
 At December 31                                                                                $   1,194                              $     990  
                                                                                         ======= ======= ====================                      ======= ======= ====================
                                                                                          
                                                                                                                                      As of
                                                                                         -----------------------------------------------------------------------------------------------
                                                                                                     December 31,                                              December 31,
                                                                                                         2017                                                      2016
                                                                                         -------------------------------------                     -------------------------------------
Liquidity
Cash and cash investments                                                                      $   1,194                                                 $     990
Short-term bank deposits                                                                             108                                    201  
                                                                                         ------------------------------------                      ------------------------------------
 Total Liquidity                                                                               $   1,302                              $   1,191  
                                                                                         ======= ======= ====================                      ======= ======= ====================

Historical information is available on our website.

 
MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Twelve Months Ended December 31, 2017
and 2016
                                                                                                                                                                                                                                     (dollars in millions)
 
                                                                                                       Three Months Ended                                                                                         Twelve Months Ended                                       
                                                                                                                             December 31,                                                                                                                                     December 31,
                                                                                    -----------------------------------------------------------------------------------------------                                                  -----------------------------------------------------------------------------------------------
                                                                                                    2017                                   2016                                       Change                                      2017                                   2016                                             Change
                                                                                    -------------------------------------                     -------------------------------------                     --------                     -------------------------------------                     -------------------------------------
Plumbing Products
  Net sales                                                                               $     972                              $     891                          9 %                              $   3,735                              $   3,526                                 6 %
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                          
  Operating profit, as reported                                                           $     169                                                 $     151                                                                              $     698                                                 $     642
    Operating margin, as reported                                                              17.4 %                                                    16.9 %                                                                                 18.7 %                                                    18.2 %
                                                                                                                                                                                                                                                                                                                                                          
  Rationalization charges                                                                         1                                                         2                                                                                      1                                                        13
  Accelerated depreciation related to rationalization activity                       --                         --                                                                   1                         --  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
  Operating profit, as adjusted                                                                 170                                                       153                                                                                    700                                                       655
    Operating margin, as adjusted                                                              17.5 %                                                    17.2 %                                                                                 18.7 %                                                    18.6 %
                                                                                                                                                                                                                                                                                                                                                          
  Depreciation and amortization                                                                  17                                     15                                                                  62                                     57  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                                                          
  EBITDA, as adjusted                                                                     $     187                              $     168                                                           $     762                              $     712  
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                          
Decorative Architectural Products
  Net sales                                                                               $     494                              $     443                         12 %                              $   2,205                              $   2,092                                 5 %
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                          
  Operating profit, as reported                                                           $      88                                                 $      75                                                                              $     434                                                 $     430
    Operating margin, as reported                                                              17.8 %                                                    16.9 %                                                                                 19.7 %                                                    20.6 %
                                                                                                                                                                                                                                                                                                                                                          
  Depreciation and amortization                                                                   4                                      4                                                                  16                                     16  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                                                          
  EBITDA                                                                                  $      92                              $      79                                                           $     450                              $     446  
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                          
Cabinetry Products
  Net sales                                                                               $     223                              $     234                         (5 )%                             $     934                              $     970                                (4 )%
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                          
  Operating profit, as reported                                                           $      25                                                 $      16                                                                              $      90                                                 $      93
    Operating margin, as reported                                                              11.2 %                                                     6.8 %                                                                                  9.6 %                                                     9.6 %
                                                                                                                                                                                                                                                                                                                                                          
  Rationalization charges                                                            --                                            --                                                                                      2                                                         4
  Accelerated depreciation related to rationalization activity                       --                                      3                                                      --                                      4  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
  Operating profit, as adjusted                                                                  25                                                        19                                                                                     92                                                       101
    Operating margin, as adjusted                                                              11.2 %                                                     8.1 %                                                                                  9.9 %                                                    10.4 %
                                                                                                                                                                                                                                                                                                                                                          
  Depreciation and amortization                                                                   3                                      3                                                                  14                                     17  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                                                          
  EBITDA, as adjusted                                                                     $      28                              $      22                                                           $     106                              $     118  
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      ======= ======= ====================

Historical information is available on our website.

 
MASCO CORPORATION
Segment Data - Unaudited
For the Three Months and Twelve Months Ended December 31, 2017
and 2016
                                                                                                                                                                                                                                     (dollars in millions)
 
                                                                                     Three Months Ended                                                                                  Twelve Months Ended                                   
                                                                                                           December 31,                                                                                                                              December 31,
                                                                     ----------------------------------------------------------------------------------------                                                  ----------------------------------------------------------------------------------------
                                                                                     2017                                2016                                   Change                                      2017                                2016                                         Change
                                                                     -------------------------------------                     ------------------------------                     --------                     -------------------------------------                     ------------------------------                     ---------------------
Windows and Other Specialty Products
  Net sales                                                                $     185                         $   191                         (3 )%                             $     770                         $   769                        -- %
                                                                     ======= ======= ====================                      == ===== ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                             
  Operating profit (loss), as reported                                     $       5                                            $     6                                                                              $      52                                            $    (3 )
      Operating margin, as reported                                              2.7 %                                              3.1 %                                                                                  6.8 %                                             (0.4 )%
                                                                                                                                                                                                                                                                                                                             
  Rationalization charges                                             --                               1                                                      --                               1  
                                                                     ------------------------------------                      -----------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit (loss), as adjusted                                             5                                                  7                                                                                     52                                                 (2 )
      Operating margin, as adjusted                                              2.7 %                                              3.7 %                                                                                  6.8 %                                             (0.3 )%
                                                                                                                                                                                                                                                                                                                             
  Depreciation and amortization                                                    5                               5                                                                  21                              21  
                                                                     ------------------------------------                      -----------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                             
  EBITDA, as adjusted                                                      $      10                         $    12                                                           $      73                         $    19  
                                                                     ======= ======= ====================                      == ===== ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                             
Total
  Net sales                                                                $   1,874                         $ 1,759                          7 %                              $   7,644                         $ 7,357                                     4 %
                                                                     ======= ======= ====================                      == ===== ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                             
  Operating profit, as reported - segment                                  $     287                                            $   248                                                                              $   1,274                                            $ 1,162
    General corporate expense, net (GCE)                                         (23 )                                              (33 )                                                                                 (105 )                                             (109 )
                                                                     ------------------------------------                      -----------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as reported                                                  264                                                215                                                                                  1,169                                              1,053
      Operating margin, as reported                                             14.1 %                                             12.2 %                                                                                 15.3 %                                             14.3 %
                                                                                                                                                                                                                                                                                                                             
    Rationalization charges - segment                                              1                                                  3                                                                                      3                                                 18
    Accelerated depreciation - segment                                --                               3                                                                   1                               4  
                                                                     ------------------------------------                      -----------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as adjusted                                                  265                                                221                                                                                  1,173                                              1,075
      Operating margin, as adjusted                                             14.1 %                                             12.6 %                                                                                 15.3 %                                             14.6 %
                                                                                                                                                                                                                                                                                                                             
  Depreciation and amortization - segment                                         29                                                 27                                                                                    113                                                111
  Depreciation and amortization - non-operating                                    3                               4                                                                  13                              19  
                                                                     ------------------------------------                      -----------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                             
  EBITDA, as adjusted                                                      $     297                         $   252                                                           $   1,299                         $ 1,205  
                                                                     ======= ======= ====================                      == ===== ====================                                                   ======= ======= ====================                      == ===== ====================

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, 2017
and 2016
 
                                                                                                                                                                                                                                     (dollars in millions)
 
                                                                                                       Three Months Ended                                                                                      Twelve Months Ended                                   
                                                                                                                             December 31,                                                                                                                                  December 31,
                                                                                    -----------------------------------------------------------------------------------------------                                                  ----------------------------------------------------------------------------------------
                                                                                                    2017                                   2016                                       Change                                      2017                                2016                                         Change
                                                                                    -------------------------------------                     -------------------------------------                     --------                     -------------------------------------                     ------------------------------                     ---------------------
North American
  Net sales                                                                               $   1,469                              $   1,389                          6 %                              $   6,069                         $ 5,834                                 4 %
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                                   
  Operating profit, as reported                                                           $     237                                                 $     212                                                                              $   1,072                                            $   961
      Operating margin, as reported                                                            16.1 %                                                    15.3 %                                                                                 17.7 %                                             16.5 %
                                                                                                                                                                                                                                                                                                                                                   
  Rationalization charges                                                                         1                                            --                                                                                      3                                                 11
  Accelerated depreciation related to rationalization activity                       --                                      3                                                                   1            4  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------ --------------------------------------------------
  Operating profit, as adjusted                                                                 238                                                       215                                                                                  1,076                      --            976
      Operating margin, as adjusted                                                            16.2 %                                                    15.5 %                                                                                 17.7 %                                             16.7 %
                                                                                                                                                                                                                                                                                                                                                   
  Depreciation and amortization                                                                  18                                     17                                                                  74                              74  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                                                   
  EBITDA, as adjusted                                                                     $     256                              $     232                                                           $   1,150                         $ 1,050  
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                                   
International
  Net sales                                                                               $     405                              $     370                          9 %                              $   1,575                         $ 1,523                                 3 %
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                                   
  Operating profit, as reported                                                           $      50                                                 $      36                                                                              $     202                                            $   201
      Operating margin, as reported                                                            12.3 %                                                     9.7 %                                                                                 12.8 %                                             13.2 %
                                                                                                                                                                                                                                                                                                                                                   
  Rationalization charges                                                            --                                      3                                                      --                               7  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as adjusted                                                                  50                                                        39                                                                                    202                                                208
      Operating margin, as adjusted                                                            12.3 %                                                    10.5 %                                                                                 12.8 %                                             13.7 %
                                                                                                                                                                                                                                                                                                                                                   
  Depreciation and amortization                                                                  11                                     10                                                                  39                              37  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                                                   
  EBITDA, as adjusted                                                                     $      61                              $      49                                                           $     241                         $   245  
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                                   
Total
  Net sales                                                                               $   1,874                              $   1,759                          7 %                              $   7,644                         $ 7,357                                 4 %
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================
                                                                                                                                                                                                                                                                                                                                                   
  Operating profit, as reported - segment                                                 $     287                                                 $     248                                                                              $   1,274                                            $ 1,162
    General corporate expense, net (GCE)                                                        (23 )                                                     (33 )                                                                                 (105 )                                             (109 )
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as reported                                                                 264                                                       215                                                                                  1,169                                              1,053
      Operating margin, as reported                                                            14.1 %                                                    12.2 %                                                                                 15.3 %                                             14.3 %
                                                                                                                                                                                                                                                                                                                                                   
    Rationalization charges - segment                                                             1                                                         3                                                                                      3                                                 18
    Accelerated depreciation - segment                                               --                                      3                                                                   1                               4  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
  Operating profit, as adjusted                                                                 265                                                       221                                                                                  1,173                                              1,075
      Operating margin, as adjusted                                                            14.1 %                                                    12.6 %                                                                                 15.3 %                                             14.6 %
                                                                                                                                                                                                                                                                                                                                                   
  Depreciation and amortization - segment                                                        29                                                        27                                                                                    113                                                111
  Depreciation and amortization - non-operating                                                   3                                      4                                                                  13                              19  
                                                                                    ------------------------------------                      ------------------------------------                                                   ------------------------------------                      -----------------------------
                                                                                                                                                                                                                                                                                                                                                   
  EBITDA, as adjusted                                                                     $     297                              $     252                                                           $   1,299                         $ 1,205  
                                                                                    ======= ======= ====================                      ======= ======= ====================                                                   ======= ======= ====================                      == ===== ====================

Historical information is available on our website.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180208005246r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180208005246/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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