Current Report

FOR IMMEDIATE RELEASE

Investor / Media Contact
Maria Duey
Vice President – Investor Relations
313.792.5500
maria_duey@mascohq.com

MASCO CORPORATION REPORTS THIRD QUARTER RESULTS AND
INCREASES FULL-YEAR GUIDANCE

      Third Quarter 2009

	•		Net sales from continuing operations declined 17 percent to $2.1 billion.
	•		Income from continuing operations, as reported, was $.14 per common share.
	•		The Company had $1.2 billion of cash at September 30, 2009.
	•		The Company has increased its estimate for 2009 full-year income (loss) from continuing operations to approximately $.05 to $(.05) per common share.
	•		The Company has increased its estimate of 2009 free cash flow (before dividends) to approximately $450 million.

Taylor, Mich., (October 26, 2009) — Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the quarter ended September 30, 2009 declined 17 percent to $2.1 billion compared with $2.5 billion for the third quarter of 2008. North American sales declined 17 percent and International sales declined 13 percent. In local currencies, International sales declined seven percent compared with the third quarter of 2008.

The third quarter of 2009 results were adversely affected by significantly lower sales volume of new home construction products and services, as well as a decline in consumer spending for home improvement products in both North American and International markets. The negative market conditions were partially offset by increased sales volume of paints and stains, the improved relationship between selling prices and commodity costs and benefits associated with business rationalizations and other cost savings initiatives.

Income from continuing operations was $.14 per common share in the third quarter of 2009 compared to income from continuing operations of $.09 per common share in the third quarter of 2008. The third quarter of 2008 was impacted by an unusually high tax rate; a normalized tax rate of 36 percent would have increased earnings by $.12 per common share.

“Although market conditions remain challenging, we are encouraged by our third quarter operating performance, which exceeded our expectations. Our sales continue to benefit from new product introductions and market share gains. Our gross profit margins were the highest we have achieved in the last seven quarters, as we continue to see the positive impact on our cost structure of the business rationalization initiatives we have implemented and our focus on quality and driving lean principles across the Company. We are proud of the worldwide Masco Team for their outstanding effort and contributions in a difficult operating environment” said Masco’s CEO Tim Wadhams.

The Company continues to focus on the rationalization of its businesses, including business consolidations, plant closures, headcount reductions, system implementations and other initiatives. During the third quarters of 2009 and 2008, the Company incurred costs and charges of $21 million pre-tax ($.04 per common share, after tax) and $15 million pre-tax ($.03 per common share, after tax), respectively, related to these initiatives.

Outlook 2009

Business conditions remain difficult in the Company’s markets. The Company continues to estimate that 2009 housing starts will decline 40 percent to approximately 550,000 units. The Company also anticipates that consumer spending for home improvement products in North American and International markets will continue at reduced levels in the near-term.

While global economic conditions make forecasting future business activity difficult, the Company currently estimates that its 2009 sales will decline approximately 18 to 20 percent compared to 2008. The Company’s previous guidance estimated that its full-year 2009 sales decline would be 18 to 22 percent compared to 2008.

The Company currently estimates that its 2009 full-year income (loss) from continuing operations will approximate $.05 to $(.05) per common share. The full-year guidance includes approximately $92 million pretax ($.17 per common share, after tax) of costs and charges for plans undertaken to further rationalize the Company’s business, but does not include any additional costs and charges that may result from the continued evaluation of the Company’s businesses or any other charges. The Company’s previous guidance was loss from continuing operations in a range of $(.05) to $(.25) per common share for the full-year 2009.

While the Company expects to operate near break-even, the guidance includes an estimate of income tax expense, principally related to income tax liabilities in certain jurisdictions and losses in other jurisdictions that provide no tax benefit. As a result, quarterly and full-year results for 2009 will reflect unusual relationships between income taxes and income (loss) before income taxes. In the third quarter of 2009, the Company reported pre-tax income of $89 million and $26 million of tax expense. A normalized tax rate of 36 percent would have reduced third quarter 2009 earnings by $.02 per common share.

The Company estimates that 2009 free cash flow (cash from operations, after capital expenditures and before dividends) will be relatively strong and approximate $450 million. This compares with the Company’s previous guidance of free cash flow of approximately $360 million.

Although the Company is confident that the long-term fundamentals for the new home construction and home improvement markets are positive, the Company expects that market conditions will be challenging over the near-term, as global economies recover. The Company believes that its strong financial position (including cash of $1.2 billion at September 30, 2009, its ability to generate positive cash flow during 2009 and unused bank lines) together with its current strategy of re-aligning its cost structure, investing in leadership brands, driving innovation and re-engineering its supply chains, will allow it to drive long-term growth and create value for our shareholders.

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

The 2009 third quarter results and supplemental material, including a presentation in PDF format, will be distributed after the market closes on October 26, 2009 and will be available on the Company’s Web site at www.masco.com .

A conference call regarding items contained in this release is scheduled for Tuesday, October 27, 2009 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 (913) 312-0407 (confirmation #5313403). The conference call will be webcast simultaneously on the Company’s Web site at www.masco.com and supplemental material, including the financial data referred to on the call and a reconciliation of non-GAAP information provided on the call, will also be available on the Web site. A replay of the call will be available on Masco’s Web site or by phone by dialing (719) 457-0820 (replay access code #5313403) approximately two hours after the end of the call and will continue through November 3, 2009.

Masco Corporation’s press releases and other information are available through the Company’s toll free number, 1-888-MAS-NEWS, or under the Investor Relations section of Masco’s Web site at www.masco.com .

# # #

Statements contained herein, or otherwise made available, that reflect the Company’s views about its future performance may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These views involve risks and uncertainties that are difficult to predict and the Company’s results may differ materially from the results discussed in such forward-looking statements. For further information, refer to our most recent Annual Report on Form 10-K (particularly the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections) and to any subsequent Quarterly Reports on Form 10-Q, all of which are on file with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Certain of the financial and statistical data made available are non-GAAP financial measures as defined by the SEC’s Regulation G. The Company believes that such non-GAAP performance measures and ratios used in managing the business may provide users with 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.

MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
For the Three Months and Nine Months Ended September 30, 2009 and 2008
(In Millions, Except Per Common Share Data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Net sales		$	2,094			$	2,511			$	5,923			$	7,560
Cost of sales			1,524				1,863				4,392				5,592
Gross profit			570				648				1,531				1,968
Selling, general and administrative expenses			432				454				1,272				1,398
Charge for defined-benefit plan curtailment			—				—				8				—
Operating profit			138				194				251				570
Other income (expense), net			(49	)			(56	)			(157	)			(196	)
Income from continuing operations before income taxes			89				138				94				374
Income taxes			26				92				35				207
Income from continuing operations			63				46				59				167
(Loss) from discontinued operations, net			(23	)			(2	)			(30	)			(15	)
Net income			40				44				29				152
Less: Net income attributable to non-controlling interest			12				11				27				35
Net income attributable to Masco Corporation		$	28			$	33			$	2			$	117
Earnings per common share attributable to Masco Corporation (diluted):
Income from continuing operations		$	0.14			$	0.09			$	0.09			$	0.36
(Loss) from discontinued operations, net			(0.06	)			(0.01	)			(0.08	)			(0.04	)
Net income attributable to Masco Corporation		$	0.08			$	0.09			$	0.00			$	0.31
Average diluted common shares outstanding			351				352				351				354
Amounts attributable to Masco Corporation:
Income from continuing operations		$	51			$	35			$	32			$	132
(Loss) from discontinued operations, net			(23	)			(2	)			(30	)			(15	)
Net income attributable to Masco Corporation		$	28			$	33			$	2			$	117

Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)

Sales & Earnings		9/30/2009				9/30/2008				Change
Net Sales		$	2,094			$	2,511				-17	%
Operating Profit		$	138			$	194				N/A
Operating Profit % to Net Sales			6.6	%			7.7	%			(110)	bps
Other Income (Expense), Net		$	(49	)		$	(56	)			-13	%
Income Tax		$	26			$	92				N/A
Income From Continuing Operations Attributable to Masco Corporation		$	51			$	35				N/A
Diluted EPS from Continuing Operations		$	0.14			$	0.09				N/A

Operating Expenses		9/30/2009				9/30/2008				Change
Cost of Sales		$	1,524			$	1,863				-18	%
Gross Margin			27.2	%			25.8	%			140	bps
SG&A Expenses (Including GCE)		$	432			$	454				-5	%
SG&A as a % of net sales			20.6	%			18.1	%			(250)	bps
General Corporate Expense (GCE)		$	36			$	32				13	%
General Corp Expense as a % of net sales			1.7	%			1.3	%			40	bps

Business Segments		9/30/2009				9/30/2008				Change
Cabinets and Related Products:
Net Sales		$	434			$	584				-26	%
Operating (Loss) Profit		$	(16	)		$	23				N/A
Operating (Loss) Profit % to Net Sales			-3.7	%			3.9	%			(760)	bps
Plumbing Products:
Net Sales		$	688			$	788				-13	%
Operating Profit		$	93			$	92				N/A
Operating Profit % to Net Sales			13.5	%			11.7	%			180	bps
Installation and Other Services:
Net Sales		$	332			$	492				-33	%
Operating (Loss) Profit		$	(34	)		$	10				N/A
Operating (Loss) Profit % to Net Sales			-10.2	%			2.0	%			(1,220)	bps
Decorative Architectural Products:
Net Sales		$	474			$	446				6	%
Operating Profit		$	122			$	94				N/A
Operating Profit % to Net Sales			25.7	%			21.1	%			460	bps
Other Specialty Products:
Net Sales		$	166			$	201				-17	%
Operating Profit		$	16			$	16				N/A
Operating Profit % to Net Sales			9.6	%			8.0	%			160	bps
Total Segment Reported:
Net Sales		$	2,094			$	2,511				-17	%
Operating Profit		$	181			$	235				N/A
Operating Profit % to Net Sales			8.6	%			9.4	%			(80)	bps
Change in Key Retailer Sales			-4	%			-11	%

Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)

Business Regions		9/30/2009				9/30/2008				Change
North America
Net Sales		$	1,630			$	1,975				-17	%
Operating Profit		$	123			$	193				N/A
Operating Profit % to Net Sales			7.5	%			9.8	%		(230		)bps
International, principally Europe
Net Sales		$	464			$	536				-13	%
Operating Profit		$	58			$	42				N/A
Operating Profit % to Net Sales			12.5	%			7.8	%		470		bps

Other		9/30/2009				9/30/2008
Dividend Payments		$	27			$	83
Cash Paid for Share Repurchases		$	—			$	13
Common Shares Repurchased			—				1
CAPEX		$	20			$	50
Depreciation and Amortization		$	62			$	60
Average diluted common shares outstanding			351				352

Masco Corporation
Key Financial Data As Reported — Unaudited
Q3 YTD — 2009 and 2008 (In Millions, Except Earnings Per Share and Working Capital Days)

Sales & Earnings		9/30/2009				9/30/2008				Change
Net Sales		$	5,923			$	7,560				-22	%
Operating Profit		$	251			$	570				N/A
Operating Profit % to Net Sales			4.2	%			7.5	%			(330	)bps
Other Income (Expense), Net		$	(157	)		$	(196	)			-20	%
Income Tax		$	35			$	207				N/A
Income From Continuing Operations Attributable to Masco Corporation		$	32			$	132				N/A
Diluted EPS from Continuing Operations		$	0.09			$	0.36				N/A

Operating Expenses		9/30/2009				9/30/2008				Change
Cost of Sales		$	4,392			$	5,592				-21	%
Gross Margin			25.8	%			26.0	%			(20	)bps
SG&A Expenses (Including GCE)		$	1,272			$	1,398				-9	%
SG&A as a % of net sales			21.5	%			18.5	%			(300	)bps
General Corporate Expense (GCE)		$	96			$	110				-13	%
General Corp Expense as a % of net sales			1.6	%			1.5	%			(10	)bps

Business Segments		9/30/2009				9/30/2008				Change
Cabinets and Related Products:
Net Sales		$	1,248			$	1,788				-30	%
Operating (Loss) Profit		$	(56	)		$	88				N/A
Operating (Loss) Profit % to Net Sales			-4.5	%			4.9	%			(940	)bps
Plumbing Products:
Net Sales		$	1,922			$	2,422				-21	%
Operating Profit		$	201			$	299				N/A
Operating Profit % to Net Sales			10.5	%			12.3	%			(180	)bps
Installation and Other Services:
Net Sales		$	961			$	1,486				-35	%
Operating (Loss) Profit		$	(104	)		$	8				N/A
Operating (Loss) Profit % to Net Sales			-10.8	%			0.5	%			(1,130	)bps
Decorative Architectural Products:
Net Sales		$	1,365			$	1,301				5	%
Operating Profit		$	313			$	257				N/A
Operating Profit % to Net Sales			22.9	%			19.8	%			310	)bps
Other Specialty Products:
Net Sales		$	427			$	563				-24	%
Operating Profit		$	16			$	37				N/A
Operating Profit % to Net Sales			3.7	%			6.6	%			(290	)bps
Total Segment Reported:
Net Sales		$	5,923			$	7,560				-22	%
Operating Profit		$	370			$	689				N/A
Operating Profit % to Net Sales			6.2	%			9.1	%			(290	)bps
Change in Key Retailer Sales			-7	%			-11	%

Masco Corporation — 3rd Quarter 2009

Page
1		Condensed Consolidated Statements of Operations - 2009 & 2008 by Quarter — Unaudited
2		Notes to Condensed Consolidated Statements of Operations - 2009 & 2008 by Quarter — Unaudited
3		2009 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
4		2009 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
5		2009 Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
6		2008 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
7		2008 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
8		2008 Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
9		Other Income (Expense), Net - 2009 & 2008 by Quarter — Unaudited
10		Condensed Consolidated Balance Sheets — Unaudited
		GAAP Reconciliations:
11		Sales Growth Excluding the Effect of Acquisitions and Currency Translation — Unaudited
12		Operating Profit and Margins — Unaudited
13		Operating (Loss) Profit and Shareholders’ Equity — Unaudited
14		Restatement for Discontinued Operations — Unaudited

Please see page 2 for Notes.

Notes:

•		Data exclude discontinued operations.
•		Operating (loss) profit and margins by segment and geographic area are before general corporate expense, charge for defined benefit plan curtailment, accelerated stock compensation expense, loss on corporate fixed assets, net and charge for litigation settlement.
•		See 2009 Costs and Charges for Business Rationalizations and Other Initiatives — page 5.

Notes:

•		Data exclude discontinued operations.
•		Operating (loss) profit and margins by segment and geographic area are before general corporate expense, charge for defined benefit plan curtailment, accelerated stock compensation expense, loss on corporate fixed assets, net and charge for litigation settlement.
•		See 2009 Costs and Charges for Business Rationalizations and Other Initiatives — page 5.