2. Safe Harbor Statement
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,” “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, and our ability to maintain our competitive position in our industries. 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. 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.
2
3. Masco Q1 2014 Results
Topic
• Summary of Results Keith Allman
• Financial/Operations Review John Sznewajs
• Outlook Keith Allman
• Q&A
3
4. Key Messages Today
North American sales driven by new products and
programs, coupled with new home construction and repair
and remodel activity
Focus on execution dampened impact of weather in much
of North America
International sales strengthened by new products and
strong execution in an improving environment
4
5. 2014 Priorities
Grow share of market-leading brands
Focus on execution to drive profitable growth in
cabinets and installation
Further penetrate international markets
Accelerate customer-focused innovation pipeline
Strengthen the balance sheet, including
reducing debt by $300-500 million by 2016
Drive operational leverage through focus
on cost containment
5
6. Masco Q1 2014 Results
Topic
• Summary of Results Keith Allman
• Financial/Operations Review John Sznewajs
• Outlook Keith Allman
• Q&A
6
7. Ten Consecutive Quarters of Sales and Profit Growth
7
*See Appendix for GAAP reconciliation.
Quarter Highlights
• 10th consecutive quarter of top and bottom line growth
• North American sales increased 3%; international sales increased 7% in local
currency
• Execution helped mitigate the effects of weather in much of North America
($ in Millions)
First Quarter
2014
Revenue
Change
$1,965
5%
Adjusted Operating Profit*
Y-O-Y Change
$157
12%
Adjusted Operating Margin*
Y-O-Y Change
8.0%
50 bps
Adjusted EPS* $0.15
8. Continued Improvement in Operating Margins
8
Y-O-Y Change in
Operating Profit $17M
*See appendix for GAAP reconciliation.
9. P L U M B I N G P R O D U C T S
9
International Drives Sales and Profit Growth
*Excluding business rationalization charges of $2 million and $1 million in the first quarters of 2014 and 2013, respectively.
($ in Millions)
First Quarter
2014
Revenue
Change
$800
5%
Adjusted Operating Profit*
Y-O-Y Change
$121
39%
Adjusted Operating Margin*
Y-O-Y Change
15.1%
370 bps
Quarter Highlights
• New product success continues
• International sales increased mid-single-digit percentage in local currency
• Strong sales to wholesale/trade
10. D E C O R AT I V E A R C H I T E C T U R A L P R O D U C T S
10
Pro Sales Continue to Expand
($ in Millions)
First Quarter
2014
Revenue
Change
$441
2%
Operating Profit
Y-O-Y Change
$76
(15%)
Operating Margin
Y-O-Y Change
17.2%
(340) bps
Quarter Highlights
• New products and Pro initiative continue to drive gallon growth
• Share gains and volume growth in builders’ hardware
• Margins adversely impacted by ~$5 million due to timing of advertising costs
11. C A B I N E T S A N D R E L AT E D P R O D U C T S
11
Business Stabilization Work Continues
*Excluding business rationalization charges of $3 million and $4 million in the first quarters of 2014 and 2013, respectively.
($ in Millions)
First Quarter
2014
Revenue
Change
$237
--%
Adjusted Operating Loss*
Y-O-Y Change
$(9)
N/M
Adjusted Operating Margin*
Y-O-Y Change
(3.8%)
(380) bps
Quarter Highlights
• Mid-single-digit percentage sales growth in the builder and dealer channels
• Continued traction with customer-focused new products
• Margins adversely impacted by:
• ERP optimization
• Plant closure and weather inefficiencies
12. I N S TA L L AT I O N A N D O T H E R S E R V I C E S
12
Strong Growth Despite Difficult Weather Conditions
($ in Millions)
First Quarter
2014
Revenue
Change
$335
7%
Operating Loss
Y-O-Y Change
$(4)
--%
Operating Margin
Y-O-Y Change
(1.2%)
10 bps
Quarter Highlights
• Sales growth driven by improvement in residential new home construction,
commercial and distribution channels
• Profit impacted by multi-family mix, investments to grow the business and
weather inefficiencies
13. O T H E R S P E C I A LT Y P R O D U C T S
13
Share Expansion Drives Strong Growth
*Excluding business rationalization charge of $3 million in the first quarter of 2013.
($ in Millions)
First Quarter
2014
Revenue
Change
$152
13%
Adjusted Operating Profit*
Y-O-Y Change
$5
150%
Adjusted Operating Margin*
Y-O-Y Change
3.3%
180 bps
Quarter Highlights
• Share expansion drives mid-teens-percentage sales growth in North America
and International windows
• Milgard ERP implementation continues
14. Strong Balance Sheet
Balance Sheet Liquidity as of 3/31/2014
Cash and cash investments $0.9B
Short-term bank deposits $0.3B
Total $1.2B
Q1 2014 Accomplishments
• Working capital as a percent of sales improved to 13.3% in Q1 2014,
compared to 14.2% in Q1 2013
14
15. Masco Q1 2014 Results
Topic
• Summary of Results Keith Allman
• Financial/Operations Review John Sznewajs
• Outlook Keith Allman
• Q&A
15
16. Outlook
16
• Velocity of global economic
recovery
• Consumer confidence
• Commodity volatility
• Housing affordability/
financing costs/mortgage
availability
• Share gains in all channels
• Continued international
market penetration
• New product adjacencies
• Operating leverage
• Improving repair and remodel
demand, including big ticket
items
• Continued growth/demand in
new home construction
• Strong liquidity
RISKS OPPORTUNITIES
19. Appendix – Profit Reconciliation – First Quarter
($ in Millions) Q1 2014 Q1 2013
Sales $ 1,965 $ 1,876
Gross Profit – As Reported $ 547 $ 508
Rationalization Charges 4 6
Gross Profit – As Adjusted $ 551 $ 514
Gross Margin - As Reported 27.8% 27.1%
Gross Margin - As Adjusted 28.0% 27.4%
Operating Profit – As Reported $ 152 $ 132
Rationalization Charges 5 8
Operating Profit – As Adjusted $ 157 $ 140
Operating Margin - As Reported 7.7% 7.0%
Operating Margin - As Adjusted 8.0% 7.5%
19
20. Appendix – EPS Reconciliation – First Quarter
20
(in Millions, Except per Common Share Data) Q1 2014 Q1 2013
Income from Continuing Operations before Income Taxes – As Reported $ 93 $ 85
Rationalization charges 5 8
Gains from financial investments, net - (3)
Equity investments loss (earnings),net 2 (6)
Income from Continuing Operations before Income Taxes – As Adjusted $ 100 $ 84
Tax at 36% rate (36) (30)
Less: Net income attributable to noncontrolling interest 12 9
Net Income, as adjusted $ 52 $ 45
Income per common share, as adjusted $ 0.15 $ 0.13
Average Diluted Shares Outstanding 354 352
21. ($ in Millions) 2014 Estimate 2013 Actual
Rationalization Charges1, 3 ~ $10 $48
Tax Rate ~ 17% 26%
Interest Expense ~ $225 $235
General Corp. Expense2 ~ $130 $134
Capital Expenditures ~ $200 $126
Depreciation &
Amortization3
~ $175 $186
Shares Outstanding 352 million 352 million
2014 Guidance Estimates
1. Based on 2014 business plans.
2. Includes rationalization expenses of $3M for the year ended December 31, 2013.
3. Includes accelerated depreciation of $13M for the year ended December 31, 2013 and estimated accelerated depreciation for the year ended December
31, 2014 of ~$1M. Such expenses are also included in the rationalization charges.
21
22. 2013 Segment Mix*
R&R = % of sales to repair and remodel channels
NC = % of sales to new construction channels
NA = % of sales within North America
Int’l = % of sales outside North America
*Based on Company estimates.
Business Segment
Plumbing
Products
Installation and
Other Services
Decorative
Architectural
Products
$3.2B
$1.4B
$1.9B
Revenue 2013 % of Total
39%
23%
17%
$8.2B 100%Total Company
Other Specialty
Products $0.7B 9%
R&R% vs. NC NA% vs. Int’l
82% 59%
99% 100%
18% 100%
74% 76%
72% 81%
Cabinets and
Related Products $1.0B 12% 57% 93%
22
23. 2013 International Revenue Split*
*Based on Company estimates.
International Sales Accounted for ~20%
of Total 2013 Masco Sales
23%
7%
6%
31%
9%
14%
10%
UK
Northern Europe
Southern Europe
Central Europe
Eastern Europe
Emerging markets
Other
23
