Masco Presents at J.P. Morgan Homebuilders and Products Conference

J.P. Morgan Homebuilding and Building

Products Conference

May 16, 2012

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Written and oral statements made in this presentation that reflect our views about our future performance constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believe,” “anticipate,” “appear,” “may,” “should,” “will,” “forecast”, “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” 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, shifts in consumer preferences and purchasing practices, and our ability to achieve cost savings through business rationalizations and other initiatives. These and other factors are discussed in detail in Item 1A, “Risk Factors” in our Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. Our forward-looking statements in this presentation speak only as of the date of this presentation. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

Certain of the financial and statistical data included in this presentation and the related materials are non-GAAP financial measures as defined under Regulation G. The Company believes that non-GAAP performance measures and ratios used in managing the business may provide attendees of this presentation 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 SEC and is available on Masco’s Web Site, www.masco.com.

Safe Harbor Statement

http://www.masco.com/

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I N V E S T M E N T T H E S I S

Strong Fundamentals - Positioned to Outperform

The strengths

The growth

The strategy

The company

Masco at a Glance

Revenue % renovation vs. new construction 75%

Employees 31,000

Market capitalization >$4.0B

Dividend yield 2.9%

Revenue $7.5B

Cumulative free cash flow last 3 years ~$1B

4

2011

Cash at 12/31/2011 $1.7B

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Masco – Strong Brands with Market Leading Positions

BUSINESS SEGMENT

Cabinetsand Related Products

PlumbingProducts

Installation and Other Services

DecorativeArchitecturalProducts

$1.2B

$2.9B

$1.1B

$1.7B

REVENUE 2011% OF TOTAL

39%

22%

17%

14%

$7.5B 100%Total company

OtherSpecialtyProducts

$0.6B 8%

LEADING POSITIONS

#1 & #2 U.S. kitchen and bath cabinetry brands

#1 worldwide in faucets, fittings, showerheads #1 in spas

#1 insulation and product installation for homebuilders

#1 DIY paint and stain

#1 windows and patio doors in western US and UK

http://www.youtube.com/watch?v=nzWcXubIHyk

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Masco – Unique Scope and Scale

manufacturer of faucets in the worldLargest

manufacturer of kitchen cabinets in the worldLargest

non-commodity supplier to The Home DepotLargest

supplier to Lowe’s Kitchen and Bath segmentLargest

supplier of architectural coatings to the U.S. DIY marketLargest

installer of insulation products for the new home construction marketLargest

We believe we are the…….

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The strengths

The growth

The strategy

The company

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Strategic Initiatives to Improve Performance

Outperformthe

recovery

• Leverage brands• Innovative products

Expand market leadership

• Supply chain savings

• Drive lean benefitsReduce costs

• Focus on Cabinets, Installation

• Return to profitability

Improve underperforming businesses

1

2

3

4

Strengthen Balance Sheet

• Debt reduction• Strong liquidity

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1 . E X P A N D M A R K E T L E A D E R S H I P

Key Brands Gaining Share since 2010

Examples Gaining Share

• Delta®, Peerless®, and Brizo® brands in U.S.

• International plumbing growth with Hansgrohe

• Decorative Architectural: Behr® #1 ranking, Direct to Pro® service growth, Kilz Pro line

• Other Specialty: Milgard® windows outperforming market, UK growing share

• Masco Contractor Services gaining share with insulation, retrofit and commercial channels

• Merillat® and Quality® cabinet brands gaining sharewith builders

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2 . R E D U C E C O S T S

Significant Progress Lowering Cost Structure Higher Margins

Cumulative Gross Fixed CostReductions

Headcount Reductionsof ~50%

2007 2010 2011

~$100M

$540M $560M

2006 2010 2011

62,500

32,500 31,000

Includes 28 closed / mothballed facilities

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3 . I M P R O V E U N D E R P E R F O R M I N G B U S I N E S S E S

Laser Focus on Achieving Breakeven

Cabinets

Executing wide range of sales initiatives

• Countertops and Vanities Program

• Increased Dealer penetration

Expect ~$50M operating profit improvement in 2012

Installation Continued penetration of retrofit and commercial

channels

Further cost reductions from lean, ERP leverage, supply chain

Expect ~$30M operating profit improvement in 2012

Estimated breakeven lowered to ~700,000 housing starts

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4 . S T R E N G T H E N B A L A N C E S H E E T

Declining Debt to Capitalization Ratio

2011Year End

Future Target

84%

45%-55%• Planned

reduction of $400M in 2012

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The strengths

The growth

The strategy

The company

Broad distribution3

Industry innovator2

Market-leading brands1

Masco Business System4

Strong financial position5

Key Strengths we are Leveraging

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S T R E N G T H 1 : M A R K E T L E A D I N G B R A N D S

Unparalleled Brand Strength

Installation & Other Services

PlumbingProducts

Cabinets & Related Products

Decorative Architectural

Products

Other Specialty Products

http://www.youtube.com/watch?v=nzWcXubIHyk

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S T R E N G T H 2 : I N D U S T R Y I N N O V A T O R

Significant New Product Introductions – Last 3 Years

30%*

Examples of New Products/Technologies

ExistingProducts

201120102009

70%

Touch2O®

Technology

Behr PremiumPlus Ultra

EssenceWindows

ArrowR.E.D.

ACE® Salt WaterSanitizing System

2011 Revenues

Hansgrohe’s Axor® Urquiola

BehrProTM

Masco Cabinetry’s ProCisionTM Process

* Percentage of 2011 gross sales of manufactured products attributable to new products introduced in trailing 36 months

Kilz PRO-XTM

S T R E N G T H 3 : B R O A D D I S T R I B U T I O N

Broad Distribution Across Multiple Channels

Broad Portfolio

Big Box Retailers Homebuilders Wholesalers / Dealers

• Exclusive products and services for the direct to builder channel

• A leading insulation contractor in the US

• Dedicated customer-specific service organizations with over 1,000 field service employees

• Extensive training programs for branch and showroom associates

• Superior dealer support through display and technology expertise

• Premier brands drive traffic

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Customer focus

Lean

QualityTalent

Innovation

S T R E N G T H 4 : M A S C O B U S I N E S S S Y S T E M S

A Continuous Improvement Culture – At the Center of Our Success

ü

MBS

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S T R E N G T H 5 : S T R O N G F I N A N C I A L P O S I T I O N

Strong Liquidity and Improving Balance Sheet

Strong Liquidity(as of 3/31/2012)

• Cash and equivalents of ~$1.8B

• Borrowing availability of ~$780M

• A strong free cash flow business– ~$1B last 3 years– Maintenance capex of

~$110M annually

• $745M of debt due in June 2012• Refinanced $400M through debt

offering in March 2012

Declining Debt to Capitalization Ratio

2011Year End

Future Target

84%

45%-55%

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The strengths

The growth

The strategy

The company

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Positioned to Outperform in the Recovery

Leveraged to the recovery

Continued brand leverage and share expansion

Continued cost position improvement

Disciplined capital deployment

1

2

3

4

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1. Leveraged to the Recovery

2006Last Peak

2010 2011 3-5 Years

12%

6%

4%

10-14%

Adjusted Operating Margin*

Reflects

• lower fixed cost base of >$560M (gross)

• driving lean principles across the company

30% margin on incremental volume

Housing starts 2.1M 0.6M 0.6M ~1-1.5M

*See Appendix slide 31

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2. Initiatives to Leverage Brands and Expand Share

GeographicExpansion

Cabinetsand RelatedProducts

PlumbingProducts

Installationand OtherServices


OtherSpecialtyProducts

ProductIntroductions

ExtendCategories

Strengthen Brand

Loyalty

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3. Continue to Improve Cost Position

~$150M* of Total Cost Productivity

in 2012

* Gross

SourcingLean

Initiatives

Driven by: Driven by:

Distribution &

Logistics

Actions Taken In Prior Years• Plant Closures• Headcount

Reductions• System

Implementations

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4. Disciplined Capital Deployment

Invest in the Business

• Maintenance capex: $110M annually

Strong Cash Flow Generation

Financial Flexibility

• Target 45%-55% debt to capitalization vs. ~84%

Dividend

• Maintain dividend yield ~2%

Acquisitions

• Potential acquisitions (<$100M) in support of international expansion

Maintain high cash balance ~$1B until markets firm up

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2012 Priorities

Investment in strategic growth initiatives

Geographic expansion

Total cost productivity

Reduce debt by ~$400M/refinance $400M

Cabinet profit improvement

Installation profit improvement

Grow share of key brands

Successfully launch new products in Paint & Builders Hardware

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Masco 3-5 Years Out – A “Normal” Housing Market

• Estimate revenues of ~$10-12B, margin of 10-14%

• Growth outperforming the industry

• Optimized portfolio with a strong balance sheet

• International expansion

• Positive return from assets employed in – Cabinets– Installation

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W H Y I N V E S T I N M A S C O


Executing initiatives to improve performance

• Continuing to reduce fixed costs, expand share and improve underperformers

The Strategy

Building on market-leading positions• Best brands, innovative products, lean practices,

strong financial positionThe Strengths

Well-positioned to outperform• Lower cost structure higher margins,

leveraged to recoveryThe Growth

Appendix

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Operating Profit Reconciliation

As adjusted for impairment charges for goodwill and other intangible assets and business rationalization charges.

Twelve Months Ended

December 31,

2011 2010 2006

Sales $ 7,467 $ 7,486 $ 12,390

Operating (loss) profit , as reported

$ (295)

$ (463)

$ 1,115

Rationalization charges 121 208 47

Impairment of goodwill and other intangible assets 494 698 317

Litigation charge 9 - -

Operating profit, as adjusted $ 329 $ 443

$ 1,479

Operating margin, as reported -4.0% -6.2% 9.0%

Operating margin, as adjusted 4.4% 5.9% 11.9%

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2012 Outlook – Cabinets Estimated Improvement

(in Millions) Sales Operating Profit

2011 Total Segment $1,230 ($115)

Less: 2011 International1

($370) ($40)2011 North America Cabinet Actual $860 ($75)

Product Exit (10) $13

2011 N.A. Operating Loss ($62)

2012 Profit Improvements, Net2

$30

2012 Revenue Opportunities, Net2

$30 $10

2012 N.A. Cabinet Estimate $880 ($22)1Uncertain economic environments, identified cost reductions of ~$7M net in 2012

2Management estimates

*Assumptions:• Reflects a flat retail and housing start environment of 600k starts

with constant mix • Every 50k increase in lagged US starts = ~$25M in revenues

(assuming constant mix) which converts to ~$8-$10M in profits

Opportunities:• Adding new dealers and additional brands with existing dealers in 2011 starting to show solid

results• New 2011 vanity/top programs at retail now generating growth opportunities• New 2011 kitchen countertop program at retail expanding throughout the East Coast

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2012 Outlook – Installation Estimated Improvement

(in Millions) Sales Operating Profit 2011 Total Segment $1,077 ($71)2011 Branch Closures ($30) $6 2011 Adjusted Segment $1,047 ($65)

2012 Profit Improvements, Net1

$20

2012 Revenue Opportunities, Net1

$40 $10 2012 Installation Segment Estimate $1,087 ($35)1Management Estimates

Opportunities:• Segment continues to add profitable retrofit and residential/commercial business• Further cost reductions from lean implementation, ERP leverage, vendor partnership

and supply chain benefits

*Assumptions • Reflects a flat housing start environment of 600k starts with constant mix• Every 50k increase in lagged US starts = ~$50M in revenues (assuming constant mix) which converts to ~$12M-

$15M in profits

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Q1 2012 - Improved Results Impacted by Increased Demand and Execution

($ in Millions)First Quarter

2012

Revenue Growth

$1,875 7 %

Adjusted Operating Profit* Y-O-Y Change

$112$54

Adjusted Operating Margin* Y-O-Y Change

6.0%270 bps

Adjusted EPS* $0.05

*As reported operating profit $102M; operating margin 5.4%; EPS $.11 per common share, see slides 35 & 36 for reconciliation.

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Q1 2012 – Profit Reconciliation

($ in Millions, except EPS) Q1 2012 Q1 2011

Sales $ 1,875 $ 1,753

Gross Profit – As Reported $ 485 $ 425

Rationalization Charges 11 24

Gross Profit – As Adjusted $ 496 $ 449

Gross Margin - As Reported 25.9% 24.2%

Gross Margin - As Adjusted 26.5% 25.6%

Operating Profit – As Reported $ 102 $ 26


Litigation (Income) Charge (2) -

Operating Profit – As Adjusted $ 112 $ 58

Operating Margin - As Reported 5.4% 1.5%

Operating Margin - As Adjusted 6.0% 3.3%

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Q1 2012 – EPS Reconciliation

(in Millions) Q1 2012 Q1 2011

Income (Loss) from Continuing Operations before Income Taxes – As Reported $ 53 $ (16)


Litigation (Income) Charge (2) -

Financial Investment (Income) Expense (16) (17)

Income (Loss) from Continuing Operations before Income Taxes – As Adjusted 47 (1)

Tax at 36% rate benefit (expense) (17) 0

Less: Net income attributable to non-controlling interest 11 12

Net Income (Loss) – as adjusted $ 19 $ (13)

Income (Loss) per common share – as adjusted $ 0.05 $ (0.04)

Shares 350 349

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Outlook into 2012

Tailwinds Headwinds

• Solid 1Q 2012 performance –off to a good start

• Successful price increases in key businesses

• Major restructuring activities complete

• Debt offering

• Improving demand in residential new construction & repair and remodel

• Competitive promotional environment for Cabinets

• International expansion cost and mix impact

• Commodity cost volatility

• Composition of new housing starts

• European Economies

($ in Millions) 2012 Estimate 2011 Actual

Rationalization Charges*

~ $20 $121

Tax Rate** ~ 50% 18%

Interest Expense ~ $250 $254

General Corp. Expense ~ $140 $118

Capital Expenditures ~ $180 $151

Depreciation & Amortization

~ $220 $263***

Outstanding Shares 348 million 348 million

2012 Guidance Estimates

*Based on current business plans.

**Tax rate for 2011 excludes the valuation allowance on the Federal deferred income tax assets and the impairment charge for goodwill and other intangible assets.

***2011 includes $58M of accelerated depreciation, which is also included in the rationalization charges.

Segment Mix Full Year 2011 Estimate

Business Segment

Cabinets andRelated Products

PlumbingProducts

Installation andOther Services


$1.2B

$2.9B

$1.1B

$1.7B

Revenue 2011 % of Total

39%

22%

17%

14%

$7.5B 100%Total company

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Other SpecialtyProducts $0.6B 8%

RR% vs. NC NA% vs. Int’l

80% 55%

95% 100%

75% 75%

20% 100%

75% 75%

70% 76%

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2011 Masco International Revenue Split*

*Based on company estimates

International Sales Accounted for ~24% of Total 2011 Masco Sales