October 27, 2014

Key Highlights
• Sales increased 4 percent to $2.2 billion
• Adjusted operating profit margin increased to 10.9 percent
• Adjusted EPS grew 15 percent to $.31 per common share
• Reversed deferred tax asset valuation allowance of $517 million

TAYLOR, Mich. (October 27, 2014) - Masco Corporation (NYSE: MAS) reported net sales and adjusted operating profit growth in the third quarter of 2014 driven primarily by the Plumbing Products, Other Specialty and Installation and Other Services segments. Adjusted operating profit margin rose to 10.9 percent, reflecting the Company's continued focus on cost management and strong operational leverage on growth. 

2014 Third Quarter Commentary

• Net sales from continuing operations increased 4 percent to $2.2 billion. North American sales increased 4 percent and international sales increased 5 percent in U.S. dollars and 3 percent in local currency
• Compared to third quarter 2013, results for key financial measures, as adjusted for certain items (see Exhibit A) and with a normalized tax rate of 36 percent, were as follows:
          • Gross margins improved to 28.6 percent compared to 28.5 percent
          • Operating margins improved to 10.9 percent compared to 10.3 percent
          • Income from continuing operations was $.31 per common share compared to $.27 per common share
• As a result of the continued profitability of the Company's U.S. operations, a $466 million ($1.32 per share) net tax benefit was recorded in the third quarter 2014 primarily from the release of the $517 million valuation allowance against its U.S. Federal and certain state deferred tax assets. This reversal was offset by an additional $51 million of tax expense to adjust taxes recorded in the first half of 2014 to the higher third quarter effective tax rate
• Income from continuing operations, as reported, was $1.51 per common share
• Liquidity at the end of the third quarter was approximately $1.6 billion

2014 Third Quarter Operating Segment Highlights

• Plumbing Products' net sales increased 4 percent, fueled by growth in the wholesale channel
• Decorative Architectural Products' net sales were flat against the third quarter of 2013 which experienced increased sales from last year's successful new product launches
• Cabinets and Related Products' net sales increased 2 percent, driven by sales growth to dealers, offset by lower sales to home centers
• Installation and Other Services' net sales increased 8 percent with continued growth in all channels
• Other Specialty Products' net sales increased 8 percent, led by a strong performance from our North American window business

"We delivered improved top- and bottom- line results in the third quarter," said Masco's President and CEO, Keith Allman. "The positive trends we saw in the second quarter continued in the third with particular strength in our Plumbing wholesale channel, ongoing growth in all channels of our Installation segment, and solid momentum in our North American and international window businesses. In our Cabinet business, we remain steadfast in our efforts to strengthen our performance and are actively positioning the business for future growth and profitability." 

Outlook

"Our performance this year has been solid and reflects our ability to successfully execute against our 2014 priorities," continued Mr. Allman. "We are committed to continuously improving our operating performance and, despite a slower than anticipated housing recovery, our long-term outlook remains positive. We are focused on growing market share with our leading brands, accelerating our innovation pipeline, and driving operational leverage. This focus, coupled with our recently-announced strategic initiatives to enhance shareholder value through the active management of our portfolio, effective capital allocation, cost control and execution, will further position us for long-term, profitable growth." 

About Masco

Headquartered in Taylor, Michigan, Masco Corporation is one of the world's leading manufacturers of branded building products, as well as a leading provider of services that include the installation of insulation and other building products.    

The 2014 third quarter supplemental material, including a presentation in PDF format, is available on the Company's website at www.masco.com.

Conference Call Details

A conference call regarding items contained in this release is scheduled for Tuesday, October 28, 2014 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 (855-22MASCO) and from outside the U.S. at . Please use the conference identification number 15817898. 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 and from outside the U.S. at . Please use the conference identification number 15817898. The telephone replay will be available approximately two hours after the end of the call and continue through November 11, 2014.

Safe Harbor Statement

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

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

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