2. Safe Harbor Statement
2
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
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.
3. Agenda
● Masco Performance - Momentum
● Powerful Capabilities
– Strengths
– Opportunities
● Go Forward Plan
3
4. Masco – Strong Brands with Industry Leading Positions
4
BUSINESS SEGMENT
Cabinets
and Related
Products
Plumbing
Products
Installation and
Other Services
Decorative
Architectural
Products
$1.0B
$3.2B
$1.4B
$1.9B
REVENUE 2013
$8.2BTotal company
Other
Specialty
Products
$0.7B
LEADING POSITIONS
Leading U.S. kitchen and bath
cabinetry brands
#1 worldwide in faucets, fittings,
showerheads
#1 in spas
#1 insulation contractor for
homebuilders
Leading DIY paint and stain
provider
#1 in vinyl windows in the western
U.S.
5. M A S C O P E R F O R M A N C E
Masco Drove Improvement During the Downturn
Reduced fixed costs
Strengthened
management
Improved
underperformers
Refined portfolio
• Installation profitable Q4 2012
• Cabinets profitable on an adjusted basis Q2 2013
• Reduced fixed gross costs by ~$600M, lowered
breakeven
• Divested Danish cabinet business
• Aligned organization with strategic goal setting and
improved planning process
• Topgraded talent at several BUs
5
6. Masco is Delivering Growth and Strong Cash Flow
Generation
6
*Operating Profit as adjusted, excluding goodwill, litigation, rationalization and other charges ($570M in 2011, $198M in
2012, and $48M in 2013). Operating (loss)/profit as reported, ($215M) in 2011, $302M in 2012 and $673 M in 2013.
$7.2
$7.5
$8.2
2011 2012 2013
Revenues
($B)
$355
$500
$721
2011 2012 2013
$75
$139
$514
2011 2012 2013
Cash Flow
($M)
Operating Profit*
($M)
7. M A S C O P E R F O R M A N C E
Masco Delivered a Solid Performance in 2013
Revenue $8.2B
Market cap >$7.9B
Dividend yield 1.4%
Free Cash Flow >$500M
Focused on Repair & Remodel
(Breakdown of 2013 Revenue)
New
Construction
Repair &
Remodel72%28%
7
12/31/2013
Liquidity $1.5B
8. Agenda
● Masco Performance - Momentum
● Powerful Capabilities
– Strengths
– Opportunities
● Go Forward Plan
8
10. M A S C O S T R E N G T H S
1. Unparalleled Brand Strength Drives Share Gains
10
Masco Cabinetry
(cabinet manufacturer
in U.S.)
Delta
(faucet brand
in North America)
Masco Contractor
Services (installer of
insulation in U.S.)
Behr
(DIY architectural
coatings in
North America)
Milgard
(vinyl window
brand in
Western U.S.)
Hansgrohe
(global faucet
& mixer brand)
Arrow, Liberty,
BrassCraft and
Watkins
(in their respective
market categories)
#2
#1
#1
#1
#1
#1
#2
11. M A S C O S T R E N G T H S
2. Customer Focused Innovation
11* Percentage of 2013 gross sales of manufactured products attributable to new products introduced in trailing 36 months
30%*
Examples of New Products/Technologies
Existing
Products
201320122011
70%
Hansgrohe SelectTM
Collection
KraftMaid New
Design Launch
2013 Revenues
BehrPro® Paint
Masco Cabinetry’s
ProCision® Process
Kilz PRO-X® Paint
Delta® Toilets
Paint & Primer in One
with Advanced Stain
Blocking Formula
KraftMaid® Vanities
Behr DeckOver®
Coating
12. M A S C O S T R E N G T H S
3. Broad Coverage Across Segments, Price Points and Channels
12
Segments Price Points Channels
New
construction
28%
Repair /
remodel
72%
International
19%
N. America
81%
• Low ticket value
~$20
• High ticket
luxury ~$20K
• Direct-to-Builder
• Big box retail
• Wholesale /
dealer trade
13. M A S C O S T R E N G T H S
4. Strong Financial Position
13
Strong Liquidity
(as of 3/31/2014)
● A strong operating cash flow business
– ~$1B last 3 years
– Maintenance capex of ~$100M annually
● Valuation allowance of ~$550 million on
deferred tax assets is expected to be
reversed when our U.S. businesses return
to sustained profitability ● Plan to reduce debt by
$300M–$500M by 2016
Declining Debt to
Capitalization Ratio
2013
Year End
Future
Target
Balance Sheet Liquidity
Cash and cash investments $0.9B
Short-term bank deposits $0.3B
Total $1.2B
82%
45%–55%
14. Agenda
● Masco Performance - Momentum
● Powerful Capabilities
– Strengths
– Opportunities
● Go Forward Plan
14
16. M A S C O O P P O R T U N I T I E S
1. Drive Full Potential of Our Core Businesses
16
Current Examples:
● Extended Delta® brand to toilets
and showers based on the power
of the brand
● Increased Behr marketing to
the professional painter to add a
new channel
● Extended Hansgrohe into new
international markets
1.
17. M A S C O O P P O R T U N I T I E S
2. Leverage Opportunities Across Our Portfolio
17
● Improved supply chain by
implementing best practices across
our portfolio
● Reduced material costs from
integrated purchasing
● Applied value engineering across
businesses
Current Examples:
2.
18. M A S C O O P P O R T U N I T I E S
3. Actively Manage Portfolio
18
● Divested underperforming
Danish cabinet business
● Integrated Alsons® showerheads
into Delta to provide cost savings
and brand extensions
● Acquired opening price point spa
business to augment Watkins’ spas
Current Examples:
3.
19. Agenda
● Masco Performance - Momentum
● Powerful Capabilities
– Strengths
– Opportunities
● Go Forward Plan
19
20. Go Forward Plan
20
1
2 Immersion in the business
3
Strategic
Plan
Listening tour
• Customers
• Investors
• Employees
Short term plan
• Assess team
• Determine org structure
• Implement operating model
Year-End 2014
21. Momentum Powerful Capabilities Go Forward Plan
Key Messages
● Masco is a strong
company, and we
believe we are
positioned to
outperform the
recovery
21
● Focused on execution
to take advantage of
strengths and drive
opportunities faster
● Plan to communicate
updated strategy
by year-end 2014
24. ($ 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.
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25. 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%
25
26. 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
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