8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported) April 29, 2008

Masco Corporation

(Exact name of Registrant as Specified in Charter)

Delaware	1-5794	38-1794485
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

21001 Van Born Road, Taylor, Michigan	48180
(Address of Principal Executive Offices)	(Zip Code)

(313) 274-7400
Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release

Item 2.02. Results of Operations and Financial Condition.

     Attached and incorporated herein by reference as Exhibit 99 is a copy of a press release dated April 29, 2008 reporting Masco Corporation’s financial results for the first quarter of 2008 and certain other information and supplemental information prepared for use in connection with the financial results for the first quarter of 2008. On April 29, 2008, Masco Corporation will hold an investor conference call and web cast to discuss financial results for the first quarter of 2008.

     This information, including the Exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits.

99 Press Release of Masco Corporation dated April 29, 2008 reporting Masco Corporation’s financial results for the first quarter of 2008 and certain other information and supplemental information prepared for use in connection with the financial results for the first quarter of 2008.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MASCO CORPORATION
By:	John G. Sznewajs
Name:		John G. Sznewajs
Title:		Vice President, Treasurer and Chief Financial Officer

April 29, 2008

EXHIBIT INDEX

99 Press Release of Masco Corporation dated April 29, 2008 reporting Masco Corporation’s financial results for the first quarter of 2008 and certain other information and supplemental information prepared for use in connection with the financial results for the first quarter of 2008.

EX-99

Exhibit 99

FOR IMMEDIATE RELEASE

Media Contact	Investor Contact
Sharon Rothwell	Maria Duey
Vice President — Corporate Affairs	Vice President — Investor Relations
313.792.6028	313.792.5500
sharon_rothwell@mascohq.com	maria_duey@mascohq.com

MASCO CORPORATION REPORTS FIRST QUARTER RESULTS

First Quarter 2008

• Net sales from continuing operations declined 13 percent to $2.4 billion.

• Income from continuing operations was $24 million or $.07 per common share.

• The Company returned $184 million to shareholders through share repurchases and dividends.

• The Company had over $600 million of cash at March 31, 2008.

Taylor, Mich., (April 29, 2008) — Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the quarter ended March 31, 2008 declined 13 percent to $2.4 billion compared with $2.8 billion for the first quarter of 2007. North American sales declined 16 percent and International sales increased one percent. In local currencies, International sales declined eight percent compared with the first quarter of 2007.

Income from continuing operations was $24 million or $.07 per common share and $137 million or $.35 per common share in the first quarters of 2008 and 2007, respectively.

The first quarter of 2008 results were adversely affected by significantly lower sales volume to the new home construction market and a continued decline in consumer spending for home improvement products.

The first quarter of 2008 results included non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax), currency losses of $10 million pre-tax ($.02 per common share, after tax) and the negative impact of a higher tax rate of $.03 per common share. In aggregate, these items reduced the first quarter of 2008 earnings by $.10 per common share.

The first quarter of 2007 results benefited from net gains related to financial investments of $22 million pre-tax ($.04 per common share, after tax).

1

As previously disclosed, in the first quarter of 2008, the Company determined that several European business units are not core to the Company’s long-term growth strategy and accordingly, embarked on a plan of disposition. The dispositions are expected to be completed within the next twelve months.

The Company has been focused on the rationalization of its businesses, including sourcing programs, business consolidations, plant closures, headcount reductions and other initiatives. During the first quarters of 2008 and 2007, the Company incurred costs and charges of $9 million pre-tax ($.02 per common share, after tax) and $25 million pre-tax ($.04 per common share, after tax), respectively, related to these initiatives. Since late 2006, the Company has aggressively reduced its cost structure including closing 11 manufacturing facilities, reducing headcount by 15,000 (which exceeds 25 percent of North American headcount) and reducing installation branches by over 20 percent.

Business conditions remain difficult in a number of the Company’s markets. The Company continues to estimate that 2008 housing starts will decline an additional 25 to 33 percent, to a range of 900,000 to one million units, compared to 1.3 million units in 2007. (In the first quarter of 2008, housing starts declined 30 percent). While the Company’s view on housing starts for 2008 has not changed since it developed its earnings guidance earlier this year, the Company currently believes that consumer spending for home improvement products and demand for certain of the Company’s International products will be weaker than originally anticipated. As a result, the Company currently estimates that its 2008 percentage sales decline will be low-double digits to mid-teens compared to 2007. The Company’s previous guidance estimated that its 2008 percentage sales decline would be high-single to low-double digits.

While forecasting future business conditions in the current uncertain economic environment remains challenging, the Company currently believes that 2008 earnings will be in a range of $.50 to $.65 per common share. This compares to the Company’s previous guidance of $.85 to $1.15 per common share. The Company estimates that free cash flow (cash from operations, after capital expenditures and before dividends) will continue to be strong and approximate $640 million, compared to its previous estimate of $700 million.

The Company’s revised guidance also reflects increasingly competitive market conditions for its services and products and increasing costs for freight and logistics and for certain commodities, including metals and commodities impacted by energy costs.

The Company’s revised guidance includes the Company’s estimate that its full-year tax rate will approximate 48 to 49 percent (due to the U.S. tax on the anticipated repatriation of low-taxed foreign earnings to utilize favorable provisions of the U.S. tax law) which, compared to the Company’s normalized tax rate of approximately 36 percent, will reduce earnings by approximately $.17 per common share. The Company’s original guidance estimated that the 2008 full-year tax rate would approximate 42 to 43 percent and reduce earnings by $.11 per common share compared to the Company’s normalized tax rate. The increase in the estimated 2008 tax rate reflects a decrease in the Company’s projected 2008 pre-tax income from continuing operations. The Company estimates that its tax rate on income from continuing operations for 2009 will approximate 35 to 36 percent.

2

The Company’s revised guidance includes: the first quarter of 2008 impairment charges for financial investments and currency losses; the impact of discontinued operations; and the benefit of the first quarter 2008 share repurchases. These items, together with the expected increase in the tax rate, decrease full-year estimated earnings by approximately $.27 per common share, net. (Relative to these items, the Company’s original guidance reflected that earnings would be reduced by $.11 per common share, based on the expectation that the full-year tax rate would increase to 42 to 43 percent).

Although the Company expects market conditions in its industry, over the next several quarters, to be very challenging, the Company is confident that the long-term fundamentals for the new home construction and home improvement products markets are positive. The Company believes that its current strategy of dividend increases and share repurchases, concentrating on organic growth, improving returns and generating superior cash flow, together with the leveraging of the combined market strength of its retail service, distribution and installation capabilities, brands and scale, will allow Masco to continue to drive long-term growth and value for its 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.

A conference call regarding items contained in this release is scheduled for Tuesday, April 29, 2008 at 11:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (913) 312-1226 (confirmation #4316668). The conference call will be webcast simultaneously on the Company’s website 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 website. A replay of the call will be available on Masco’s website or by phone by dialing (719) 457-0820 (replay access code #4316668) approximately two hours after the end of the call and will continue through May 6, 2008.

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 website at www.masco.com.

# # #

Statements contained herein that reflect the Company’s views about its future performance 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, accordingly, the Company’s results may differ materially from the results discussed in such forward-looking statements. For an explanation of various factors that may affect our performance, refer to our most recent Annual Report on Form 10-K (particularly the “Risk Factors” section) 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. The Company believes that certain non-GAAP performance measures and ratios that may be 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.

3

MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED
For the Three Months Ended March 31, 2008 and 2007
(In Millions, Except Per Common Share Data)

	Three Months Ended
	March 31,
	2008			2007
Net sales	$	2,446		$	2,803
Cost of sales		1,818			2,067
Gross profit		628			736
Selling, general and administrative expenses		468			484
Operating profit		160			252
Other income (expense), net		(84	)		(21	)
Income from continuing operations before income taxes and minority interest		76			231
Income taxes		40			85
Income from continuing operations before minority interest		36			146
Minority interest		12			9
Income from continuing operations		24			137
(Loss) income from discontinued operations, net		(22	)		6
Net income	$	2		$	143
Earnings per common share (diluted):
Income from continuing operations	$	0.07		$	0.35
(Loss) income from discontinued operations, net		(0.06	)		0.02
Net income	$	0.01		$	0.37
Average diluted common shares outstanding		356			388

MASCO CORPORATION
BUSINESS AND FINANCIAL HIGHLIGHTS

As previously disclosed, in the first quarter of 2008, the Company determined that several European business units are not core to the Company’s long-term growth strategy and, accordingly, embarked on a plan of disposition. The dispositions are expected to be completed within the next twelve months.

In accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company has accounted for the 2008 business units held for sale and the 2007 disposition of a European business unit as discontinued operations.

First Quarter 2008

• Net sales from continuing operations declined 13 percent, with North American sales declining 16 percent and International sales increasing one percent. In local currencies, International sales declined eight percent compared with the first quarter of 2007.

• Key retailer sales from continuing operations decreased ten percent in the 2008 first quarter compared with a decline of two percent in the 2007 first quarter and a decline of five percent in the 2007 fourth quarter.

• Sales changes by segment in the first quarter of 2008 versus the first quarter of 2007 were:

• Cabinets and Related Products sales declined 14 percent;

• Plumbing Products sales declined three percent;

• Installation and Other Services sales declined 24 percent;

• Decorative Architectural Products sales declined 10 percent; and

• Other Specialty Products sales declined 22 percent.

• The first quarter of 2008 results were adversely affected by significantly lower sales volume to the new home construction market and a continued decline in consumer spending for home improvement products.

(more)

1

MASCO CORPORATION
BUSINESS AND FINANCIAL HIGHLIGHTS

First Quarter 2008 (continued)

• The Company has been focused on the rationalization of its businesses, including sourcing programs, business consolidations, plant closures, headcount reductions and other initiatives. During the first quarters of 2008 and 2007, the Company incurred costs and charges of $9 million pre-tax ($.02 per common share, after tax) and $25 million pre-tax ($.04 per common share, after tax), respectively, related to these initiatives. Since late 2006, the Company has aggressively reduced its cost structure including closing 11 manufacturing facilities, reducing headcount by 15,000 (which exceeds 25 percent of North American headcount) and reducing installation branches by over 20 percent.

• Results included non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax) and currency losses of $10 million pre-tax ($.02 per common share, after tax) in the first quarter of 2008. The first quarter of 2008 results also included the negative impact of a higher tax rate (53 percent in the first quarter of 2008 compared to 37 percent in the first quarter of 2007) of $.03 per common share. In aggregate, these items reduced the first quarter of 2008 earnings by $.10 per common share.

• Results benefited from net gains related to financial investments of $22 million pre-tax ($.04 per common share, after tax) in the first quarter of 2007.

• Income from continuing operations was $24 million or $.07 per common share and $137 million or $.35 per common share in the first quarters of 2008 and 2007, respectively.

• Net income in the first quarter of 2008 was $2 million or $.01 per common share, including loss from discontinued operations, net, of $22 million. Net income in the first quarter of 2007 was $143 million or $.37 per common share, including income from discontinued operations, net, of $6 million.

• The Company reviews its business portfolio on an ongoing basis as part of its corporate strategic planning and, as previously disclosed, has determined that several of its European business units are not core to the Company’s long-term growth strategy and, accordingly, has embarked on a plan of disposition. These business units had combined 2007 net sales in excess of $235 million and aggregate operating profit of $13 million (excluding an impairment charge for goodwill of $108 million). The Company expects proceeds from the dispositions to exceed $140 million. The dispositions are expected to be completed within the next twelve months.

(more)

2

MASCO CORPORATION
BUSINESS AND FINANCIAL HIGHLIGHTS

First Quarter 2008 (continued)

• In the first quarter of 2008, the Company recognized a charge for discontinued operations expected to be sold at a loss of $49 million pre-tax ($.08 per common share, after tax), included in (loss) from discontinued operations. Any gains resulting from the disposition of individual business units will be recognized as such transactions are completed.

• Gross margins were 25.7 percent in the first quarter of 2008 compared with 26.3 percent in the first quarter of 2007. Operating profit margins were 6.5 percent in the first quarter of 2008 compared with 9.0 percent in the first quarter of 2007. Operating profit margins in the first quarter of 2008 were negatively affected by lower sales volumes and increasing costs for certain commodities, including metals and commodities impacted by energy costs.

• SG&A expenses as a percent of sales, including general corporate expense, were 19.1 percent in the 2008 first quarter compared with 17.3 percent in the 2007 first quarter, reflecting lower sales volume, as well as increased bad debt expense, principally related to the new home construction market.

• General corporate expense was 1.8 percent of sales in both the first quarters of 2008 and 2007.

• Accounts receivable days at the end of both the first quarters of 2008 and 2007 were 52 days.

• Inventory days at the end of the first quarter were 51 days compared with 50 days a year ago.

• Accounts payable days at the end of the first quarter were 44 days compared with 42 days a year ago.

• Working capital at March 31, 2008 (defined as accounts receivable and inventories less accounts payable) was 17.3 percent of the last twelve months’ sales compared with 17.4 percent a year earlier.

(more)

3

MASCO CORPORATION
BUSINESS AND FINANCIAL HIGHLIGHTS

First Quarter 2008 (continued)

• For the twelve months ended March 31, 2008 and 2007, return on invested capital (as reported) was 8.5 percent and 8.8 percent, respectively. For the twelve months ended March 31, 2008 and 2007, return on invested capital (as reconciled) was 9.2 percent and 11.3 percent, respectively. While the Company remains committed to the continued improvement in its ROIC, recent macro business trends have resulted in a reduction in operating profit over the last several quarters, which has negatively impacted ROIC. The Company continues to believe that it will achieve its long-term ROIC goal of 18 percent and will provide guidance as to the timing when there is more clarity in the recovery of the housing market.

• The Company’s tax rate was 53 percent in the first quarter of 2008 compared to 37 percent in the comparable period of the prior year. The Company anticipates that its tax rate on income from continuing operations for 2008 will approximate 48 to 49 percent. The increase in the expected tax rate for 2008 is primarily due to the U.S. tax on anticipated dividend distributions of low-taxed foreign earnings. These dividends are being distributed to utilize the favorable provisions of the U.S. income tax law that are scheduled to expire at December 31, 2008. The Company estimates that its tax rate on income from continuing operations for 2009 will approximate 35 to 36 percent.

• At the end of the quarter, the Company had a strong balance sheet with over $600 million of cash and $2 billion in unused bank lines.

• Debt as a percent of total capitalization was 51 percent at both March 31, 2008 and 2007.

• During the quarter, the Company repurchased five million shares of Company common stock.

• The Company’s diluted common shares for purposes of calculating earnings per common share were 356 million for the first quarter of 2008 compared with 388 million for the first quarter of 2007.

(more)

4

MASCO CORPORATION
BUSINESS AND FINANCIAL HIGHLIGHTS

First Quarter 2008 (concluded)

•

The Company expects to continue its current strategy of returning $1 billion annually to shareholders, on average, through share repurchases and dividends as part of its ongoing commitment to value creation. As previously mentioned, management expects to recommend to Masco’s Board of Directors later this year that we increase Masco’s dividend for the 50th consecutive year! This reflects our current expectation, from a macro standpoint, that the decline in new home construction and the home improvement products markets will bottom in 2008 and at least modestly improve in 2009. In the first quarter of 2008, the Company returned $184 million to shareholders through share repurchases (five million common shares) and dividends. Given the current operating environment, however, 2008 dividends and share repurchases may not aggregate $1 billion.

The Company has returned over $6 billion to shareholders over the last five calendar years, including the repurchase of 157 million common shares and dividends.

Outlook for 2008

• Business conditions remain difficult in a number of the Company’s markets. The Company continues to estimate that 2008 housing starts will decline an additional 25 to 33 percent, to a range of 900,000 to one million units, compared to 1.3 million units in 2007. (In the first quarter of 2008, housing starts declined 30 percent). While the Company’s view on housing starts for 2008 has not changed since it developed its earnings guidance earlier this year, the Company currently believes that consumer spending for home improvement products and demand for certain of the Company’s International products will be weaker than originally anticipated. (In the first quarter of 2008, the Company’s sales to its key retail customers declined by ten percent and its International sales declined eight percent in local currencies.) As a result, the Company currently estimates that its 2008 percentage sales decline will be low-double digits to mid-teens compared to 2007. The Company’s previous guidance estimated that its 2008 percentage sales decline would be high-single to low-double digits.

• While forecasting future business conditions in the current uncertain economic environment remains challenging, the Company currently believes that 2008 earnings will be in a range of $.50 to $.65 per common share. This compares to the Company’s previous guidance of $.85 to $1.15 per common share. The Company estimates that free cash flow (cash from operations, after capital expenditures and before dividends) will continue to be strong and approximate $640 million, compared to its previous estimate of $700 million.

(more)

5

MASCO CORPORATION
BUSINESS AND FINANCIAL HIGHLIGHTS

Outlook for 2008 (concluded)

• The Company’s revised guidance also reflects increasingly competitive market conditions for its services and products and increasing costs for freight and logistics and for certain commodities, including metals and commodities impacted by energy costs.

• The Company’s revised guidance also estimates that its full-year tax rate will approximate 48 to 49 percent (due to the U.S. tax on the anticipated repatriation of low-taxed foreign earnings to utilize favorable provisions of the U.S. tax law) which, compared to the Company’s normalized tax rate of approximately 36 percent, will reduce earnings by approximately $.17 per common share. The Company’s original guidance estimated that the 2008 full-year tax rate would approximate 42 to 43 percent and reduce earnings by $.11 per common share compared to the Company’s normalized tax rate. The increase in the estimated 2008 tax rate reflects a decrease in the Company’s projected 2008 pre-tax income from continuing operations. The Company estimates that its tax rate on income from continuing operations for 2009 will approximate 35 to 36 percent.

• The Company’s revised guidance includes: the first quarter of 2008 impairment charges for financial investments and currency losses; the impact of discontinued operations; and the benefit of the first quarter 2008 share repurchases. These items, together with the expected increase in the tax rate, decrease full-year estimated earnings by approximately $.27 per common share, net. (Relative to these items, the Company’s original guidance reflected that earnings would be reduced by $.11 per common share, based on the expectation that the full-year tax rate would increase to 42 to 43 percent).

• Although the Company expects market conditions in its industry, over the next several quarters, to be very challenging, the Company is confident that the long-term fundamentals for the new home construction and home improvement products markets are positive. The Company believes that its current strategy of dividend increases and share repurchases, concentrating on organic growth, improving returns and generating superior cash flow, together with the leveraging of the combined market strength of its retail service, distribution and installation capabilities, brands and scale, will allow Masco to continue to drive long-term growth and value for its shareholders.

• Based on the current market price for the Company’s common stock, diluted common shares for the computation of earnings per common share at April 1, 2008 were 354 million. This excludes the impact of any April 2008 repurchases of common stock.

# # #

6

Statements contained herein that reflect the Company’s views about its future performance 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, accordingly, the Company’s results may differ materially from the results discussed in such forward-looking statements. For an explanation of various factors that may affect our performance, refer to our most recent Annual Report on Form 10-K (particularly the “Risk Factors” section) 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. The Company believes that certain non-GAAP performance measures and ratios that may be 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.

7

MASCO CORPORATION — 1st Quarter 2008

Page

1	Condensed Consolidated Statements of Operations — 2008 & 2007 by Quarter — Unaudited
2	Notes to Condensed Consolidated Statements of Operations — 2008 & 2007 by Quarter — Unaudited
3	Sales by Segment and Geographic Area — Three Months Ended March 31, 2008 & 2007 — Unaudited
4	2008 Quarterly Segment Data Excluding Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
5	2008 Quarterly Segment Data Including Costs and Charges for Business Rationalizations and Other Initiatives — Unaudited
6	2007 Quarterly Segment Data Excluding Net Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
7	2007 Quarterly Segment Data Including Net Costs and Charges for Business Rationalizations and Other Initiatives and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
8	Other Income (Expense), Net — 2008 & 2007 by Quarter — Unaudited
9	Condensed Consolidated Statements of Income — Three Months Ended March 31, 2008 & 2007 — Unaudited
10	Condensed Consolidated Balance Sheets — Unaudited
11	Discontinued Operations — Unaudited
	GAAP Reconciliations:
12	Sales Growth Excluding the Effect of Acquisitions and Currency Translation — Unaudited
13	Operating Profit and Margins — Unaudited
14	Operating Profit and Shareholders’ Equity — Unaudited

MASCO CORPORATION
Condensed Consolidated Statements of Operations
2008 & 2007 — by Quarter — Unaudited
(dollars in millions, except per share data)

	2008							2007
	Year	Qtr. 4	Qtr. 3	Qtr. 2	Qtr. 1			Year			Qtr. 4			Qtr. 3			Qtr. 2			Qtr. 1
Net Sales:
- North America					$	1,893		$	9,271		$	2,048		$	2,417		$	2,548		$	2,258
- International, principally Europe						553			2,261			587			588			541			545
- Consolidated						2,446			11,532			2,635			3,005			3,089			2,803
Cost of Sales						1,818			8,380			1,960			2,155			2,198			2,067
Gross Profit						628			3,152			675			850			891			736
(Gross Margin as a % of Sales)						25.7	%		27.3	%		25.6	%		28.3	%		28.8	%		26.3	%
S,G&A Expense (before GCE & (Gain) on Sale of Corporate Fixed Assets)						425			1,806			449			435			486			436
(S,G&A Expense as a % of Sales)						17.4	%		15.7	%		17.0	%		14.5	%		15.7	%		15.6	%
Operating Profit (before GCE, (Gain) on Sale of Corporate Fixed Assets & Impairment Charges for Goodwill and Other Intangible Assets)						203			1,346			226			415			405			300
(Operating Margin as a % of Sales)						8.3	%		11.7	%		8.6	%		13.8	%		13.1	%		10.7	%
- North America						149			1,008			60			346			360			242
(Margin as a % of Sales)						7.9	%		10.9	%		2.9	%		14.3	%		14.1	%		10.7	%
- International, principally Europe						54			219			47			69			45			58
(Margin as a % of Sales)						9.8	%		9.7	%		8.0	%		11.7	%		8.3	%		10.6	%
General Corporate Expense (GCE), Net						43			181			37			44			49			51
S,G&A Expense as a % of Sales (Including GCE & (Gain) on Sale of Corporate Fixed Assets)						19.1	%		17.2	%		18.4	%		15.9	%		17.2	%		17.3	%
(Gain) on Sale of Corporate Fixed Assets, Net						—			(8	)		—			—			(5	)		(3	)
Impairment Charges for Goodwill and Other Intangible Assets						—			119			119			—			—			—
Operating Profit per F/S					$	160		$	1,054		$	70		$	371		$	361		$	252
Earnings (Loss) per Common Share (Diluted):
Income (Loss) from Continuing Operations					$	0.07		$	1.32		$	(0.09	)	$	0.56		$	0.49		$	0.35
(Loss) Income from Discontinued Operations, Net						(0.06	)		(0.29	)		(0.33	)		—			0.02			0.02
Net Income (Loss)					$	0.01		$	1.03		$	(0.42	)	$	0.56		$	0.51		$	0.37

Please see page 2 for Notes.

Page 1

MASCO CORPORATION
Notes to Condensed Consolidated Statements of Operations
2008 & 2007 — by Quarter — Unaudited

Notes:

– Operating results for the first quarter of 2008 include costs and charges related to business rationalizations and other initiatives of $9 million pre-tax ($.02 per common share, after tax).

– Income from continuing operations for the first quarter of 2008 includes non-cash impairment charges for financial investments of $26 million pre-tax ($.05 per common share, after tax).

– Loss from discontinued operations for the first quarter of 2008 includes a non-cash charge for those business units that are expected to be divested at a loss of $49 million pre-tax ($.08 per common share, after tax).

– Operating results for the fourth quarter of 2007 include non-cash impairment charges for goodwill and other intangible assets of $119 million pre-tax ($.28 per common share, after tax).

– Operating results for the first, second, third and fourth quarters of 2007 include costs and charges related to business rationalizations and other initiatives of $25 million pre-tax ($.04 per common share, after tax), $23 million pre-tax ($.04 per common share, after tax), $12 million pre-tax ($.02 per common share, after tax, net of an $8 million gain from the sale of fixed assets) and $19 million pre-tax ($.03 per common share, after tax), respectively.

– Income from continuing operations for the second and third quarters of 2007 includes non-cash impairment charges for financial investments of $10 million pre-tax ($.02 per common share, after tax) and $12 million pre-tax ($.02 per common share, after tax), respectively.

– Income from continuing operations for the first, second, third and fourth quarters of 2007 includes income related to financial investments of $22 million pre-tax ($.04 per common share, after tax), $7 million pre-tax ($.01 per common share, after tax), $11 million pre-tax ($.02 per common share, after tax) and $3 million pre-tax ($.01 per common share, after tax), respectively.

– Loss from discontinued operations for the fourth quarter of 2007 includes a non-cash impairment charge for goodwill of $108 million pre-tax ($.30 per common share, after tax).

– Per common share amounts for the four quarters of 2007 do not total to the per common share amounts for the year, primarily due to the timing of common stock transactions.

Page 2

MASCO CORPORATION
Sales by Segment and Geographic Area
Three Months Ended March 31, 2008 & 2007 — Unaudited
(dollars in millions)

	Three Months Ended				1st Qtr '08
	March 31,				vs.
	2008		2007		1st Qtr '07
Cabinets and Related Products	$	596	$	691		- 14	%
Plumbing Products		817		838		- 3	%
Installation and Other Services		486		638		- 24	%
Decorative Architectural Products		379		420		- 10	%
Other Specialty Products		168		216		- 22	%
Total	$	2,446	$	2,803		- 13	%
North America	$	1,893	$	2,258		- 16	%
International, principally Europe		553		545		+ 1	%
Total, as above	$	2,446	$	2,803		- 13	%

Notes:

– Data exclude discontinued operations.

– Excluding acquisitions, consolidated net sales decreased 14 percent, North American net sales decreased 18 percent and International net sales increased one percent compared with the first quarter of 2007 (please see page 12 for the GAAP reconciliation).

– International net sales in local currencies decreased eight percent compared with the first quarter of 2007 (please see page 12 for the GAAP reconciliation).

Page 3

MASCO CORPORATION
Quarterly Segment Data — 2008
Excluding Costs & Charges for Business Rationalizations and Other Initiatives
(dollars in millions)

	Year	Qtr. 4	Qtr. 3	Qtr. 2	Qtr. 1
Net Sales:
- Cabinets and Related Products					$	596
- Plumbing Products						817
- Installation and Other Services						486
- Decorative Architectural Products						379
- Other Specialty Products						168
- Total					$	2,446
- North America					$	1,893
- International, principally Europe						553
- Total, as above					$	2,446
Operating Profit:
- Cabinets and Related Products					$	29
- Plumbing Products						102
- Installation and Other Services						(1	)
- Decorative Architectural Products						74
- Other Specialty Products						8
- Total					$	212
- North America					$	157
- International, principally Europe						55
- Total, as above					$	212
General Corporate Expense (GCE), Net						43
(Gain) on Sale of Corporate Fixed Assets, Net						—
Operating Profit (after GCE and Adjustments)						169
Other Income (Expense), Net						(84	)
Income from Continuing Operations before Income Taxes and Minority Interest					$	85
Margins:
- Cabinets and Related Products						4.9	%
- Plumbing Products						12.5	%
- Installation and Other Services						-0.2	%
- Decorative Architectural Products						19.5	%
- Other Specialty Products						4.8	%
- Total						8.7	%
- North America						8.3	%
- International, principally Europe						9.9	%
- Total, as above						8.7	%

Notes:

– Data exclude discontinued operations.

– Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets.

– Operating profit margins for the first quarter of 2008 exclude costs and charges of $9 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($1 million), Plumbing Products ($3 million) and Installation and Other Services ($5 million).

Page 4

MASCO CORPORATION
Quarterly Segment Data — 2008
Including Costs & Charges for Business Rationalizations and Other Initiatives
(dollars in millions)

	Year	Qtr. 4	Qtr. 3	Qtr. 2	Qtr. 1
Net Sales:
- Cabinets and Related Products					$	596
- Plumbing Products						817
- Installation and Other Services						486
- Decorative Architectural Products						379
- Other Specialty Products						168
- Total					$	2,446
- North America					$	1,893
- International, principally Europe						553
- Total, as above					$	2,446
Operating Profit:
- Cabinets and Related Products					$	28
- Plumbing Products						99
- Installation and Other Services						(6	)
- Decorative Architectural Products						74
- Other Specialty Products						8
- Total					$	203
- North America					$	149
- International, principally Europe						54
- Total, as above					$	203
General Corporate Expense (GCE), Net						43
(Gain) on Sale of Corporate Fixed Assets, Net						—
Operating Profit (after GCE and Adjustments)						160
Other Income (Expense), Net						(84	)
Income from Continuing Operations before Income Taxes and Minority Interest					$	76
Margins:
- Cabinets and Related Products						4.7	%
- Plumbing Products						12.1	%
- Installation and Other Services						-1.2	%
- Decorative Architectural Products						19.5	%
- Other Specialty Products						4.8	%
- Total						8.3	%
- North America						7.9	%
- International, principally Europe						9.8	%
- Total, as above						8.3	%

Notes:

– Data exclude discontinued operations.

– Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets.

– Operating profit margins for the first quarter of 2008 include costs and charges of $9 million pre-tax for business rationalizations and other initiatives as follows: Cabinets and Related Products ($1 million), Plumbing Products ($3 million) and Installation and Other Services ($5 million).

Page 5

MASCO CORPORATION
Quarterly Segment Data — 2007
Excluding Net Costs & Charges for BusinessRationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)

	Year			Qtr. 4			Qtr. 3			Qtr. 2			Qtr. 1
Net Sales:
- Cabinets and Related Products	$	2,829		$	665		$	736		$	737		$	691
- Plumbing Products		3,391			819			865			869			838
- Installation and Other Services		2,615			589			689			699			638
- Decorative Architectural Products		1,768			347			467			534			420
- Other Specialty Products		929			215			248			250			216
- Total	$	11,532		$	2,635		$	3,005		$	3,089		$	2,803
- North America	$	9,271		$	2,048		$	2,417		$	2,548		$	2,258
- International, principally Europe		2,261			587			588			541			545
- Total, as above	$	11,532		$	2,635		$	3,005		$	3,089		$	2,803
Operating Profit:
- Cabinets and Related Products	$	368		$	71		$	108		$	107		$	82
- Plumbing Products		349			66			103			97			83
- Installation and Other Services		197			34			65			62			36
- Decorative Architectural Products		385			62			114			116			93
- Other Specialty Products		119			12			36			42			29
- Total	$	1,418		$	245		$	426		$	424		$	323
- North America	$	1,122		$	126		$	356		$	377		$	263
- International, principally Europe		227			50			70			47			60
- Total, as above	$	1,349		$	176		$	426		$	424		$	323
General Corporate Expense (GCE), Net		174			37			43			45			49
(Gain) on Sale of Corporate Fixed Assets, Net		(8	)		—			—			(5	)		(3	)
Operating Profit (after GCE and Adjustments)		1,183			139			383			384			277
Other Income (Expense), Net		(188	)		(58	)		(45	)		(64	)		(21	)
Income from Continuing Operations before Income Taxes and Minority Interest	$	995		$	81		$	338		$	320		$	256
Margins:
- Cabinets and Related Products		13.0	%		10.7	%		14.7	%		14.5	%		11.9	%
- Plumbing Products		10.3	%		8.1	%		11.9	%		11.2	%		9.9	%
- Installation and Other Services		7.5	%		5.8	%		9.4	%		8.9	%		5.6	%
- Decorative Architectural Products		21.8	%		17.9	%		24.4	%		21.7	%		22.1	%
- Other Specialty Products		12.8	%		5.6	%		14.5	%		16.8	%		13.4	%
- Total		12.3	%		9.3	%		14.2	%		13.7	%		11.5	%
- North America		12.1	%		6.2	%		14.7	%		14.8	%		11.6	%
- International, principally Europe		10.0	%		8.5	%		11.9	%		8.7	%		11.0	%
- Total, as above		11.7	%		6.7	%		14.2	%		13.7	%		11.5	%

Notes:

– Data exclude discontinued operations.

– Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets.

– Operating profit margins for the fourth quarter of 2007 exclude $119 million of impairment charges for goodwill and other intangible assets as follows: Plumbing Products ($69 million) and Other Specialty Products ($50 million).

– Operating profit margins for the fourth quarter of 2007 exclude costs and charges of $19 million pre-tax related business rationalizations and other initiatives as follows: Cabinets and Related Products ($8 million), Plumbing Products ($5 million) and Installation and Other Services ($6 million).

– Operating profit margins for the third quarter of 2007 exclude net costs and charges of $12 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($3 million, net of an $8 million gain from the sale of fixed assets), Plumbing Products ($3 million), Installation and Other Services ($5 million), and GCE ($1 million).

– Operating profit margins for the second quarter of 2007 exclude costs and charges of $23 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($11 million), Plumbing Products ($2 million), Installation and Other Services ($4 million), Decorative Architectural Products ($1 million), Other Specialty Products ($1 million) and GCE ($4 million).

– Operating profit margins for the first quarter of 2007 exclude costs and charges of $25 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($10 million), Plumbing Products ($6 million), Installation and Other Services ($6 million), Other Specialty Products ($1 million) and GCE ($2 million).

Page 6

MASCO CORPORATION
Quarterly Segment Data — 2007
Including Net Costs & Charges for Business Rationalizations and Other Initiatives
and Impairment Charges for Goodwill and Other Intangible Assets — Unaudited
(dollars in millions)

	Year			Qtr. 4			Qtr. 3			Qtr. 2			Qtr. 1
Net Sales:
- Cabinets and Related Products	$	2,829		$	665		$	736		$	737		$	691
- Plumbing Products		3,391			819			865			869			838
- Installation and Other Services		2,615			589			689			699			638
- Decorative Architectural Products		1,768			347			467			534			420
- Other Specialty Products		929			215			248			250			216
- Total	$	11,532		$	2,635		$	3,005		$	3,089		$	2,803
- North America	$	9,271		$	2,048		$	2,417		$	2,548		$	2,258
- International, principally Europe		2,261			587			588			541			545
- Total, as above	$	11,532		$	2,635		$	3,005		$	3,089		$	2,803
Operating Profit (Loss):
- Cabinets and Related Products	$	336		$	63		$	105		$	96		$	72
- Plumbing Products		264			(8	)		100			95			77
- Installation and Other Services		176			28			60			58			30
- Decorative Architectural Products		384			62			114			115			93
- Other Specialty Products		67			(38	)		36			41			28
- Total	$	1,227		$	107		$	415		$	405		$	300
- North America	$	1,008		$	60		$	346		$	360		$	242
- International, principally Europe		219			47			69			45			58
- Total, as above	$	1,227		$	107		$	415		$	405		$	300
General Corporate Expense (GCE), Net		181			37			44			49			51
(Gain) on Sale of Corporate Fixed Assets, Net		(8	)		—			—			(5	)		(3	)
Operating Profit (after GCE and Adjustments)		1,054			70			371			361			252
Other Income (Expense), Net		(188	)		(58	)		(45	)		(64	)		(21	)
Income from Continuing Operations before Income Taxes and Minority Interest	$	866		$	12		$	326		$	297		$	231
Margins:
- Cabinets and Related Products		11.9	%		9.5	%		14.3	%		13.0	%		10.4	%
- Plumbing Products		7.8	%		-1.0	%		11.6	%		10.9	%		9.2	%
- Installation and Other Services		6.7	%		4.8	%		8.7	%		8.3	%		4.7	%
- Decorative Architectural Products		21.7	%		17.9	%		24.4	%		21.5	%		22.1	%
- Other Specialty Products		7.2	%		-17.7	%		14.5	%		16.4	%		13.0	%
- Total		10.6	%		4.1	%		13.8	%		13.1	%		10.7	%
- North America		10.9	%		2.9	%		14.3	%		14.1	%		10.7	%
- International, principally Europe		9.7	%		8.0	%		11.7	%		8.3	%		10.6	%
- Total, as above		10.6	%		4.1	%		13.8	%		13.1	%		10.7	%

Notes:

– Data exclude discontinued operations.

– Operating profit and margins by segment and geographic area are before general corporate expense and (gain) on sale of Corporate fixed assets.

– Operating profit margins for the fourth quarter of 2007 include $119 million of impairment charges for goodwill and other intangible assets as follows: Plumbing Products ($69 million) and Other Specialty Products ($50 million).

– Operating profit margins for the fourth quarter of 2007 include net costs and charges of $19 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($8 million), Plumbing Products ($5 million) and Installation and Other Services ($6 million).

– Operating profit margins for the third quarter of 2007 include net costs and charges of $12 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($3 million, net of an $8 million gain from the sale of fixed assets), Plumbing Products ($3 million), Installation and Other Services ($5 million), and GCE ($1 million).

– Operating profit margins for the second quarter of 2007 include costs and charges of $23 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($11 million), Plumbing Products ($2 million), Installation and Other Services ($4 million), Decorative Architectural Products ($1 million), Other Specialty Products ($1 million) and GCE ($4 million).

– Operating profit margins for the first quarter of 2007 include costs and charges of $25 million pre-tax related to business rationalizations and other initiatives as follows: Cabinets and Related Products ($10 million), Plumbing Products ($6 million), Installation and Other Services ($6 million), Other Specialty Products ($1 million) and GCE ($2 million).

Page 7

MASCO CORPORATION
Other Income (Expense), Net
2008 & 2007 — by Quarter — Unaudited
(in millions)

	2008							2007
	Year	Qtr. 4	Qtr. 3	Qtr. 2	Qtr. 1			Year			Qtr. 4			Qtr. 3			Qtr. 2			Qtr. 1
Interest Expense					$	(56	)	$	(258	)	$	(61	)	$	(65	)	$	(69	)	$	(63	)
Income from Cash and Cash Investments						6			37			8			7			8			14
Other Interest Income						—			3			1			1			1			—
Realized (Losses) Gains from Financial Investments, Net						(3	)		43			3			11			7			22
Dividend Income						—			6			—			—			1			5
Impairment Charges for Financial Investments						(26	)		(22	)		—			(12	)		(10	)		—
Other, Net						(5	)		3			(9	)		13			(2	)		1
Total Other Income (Expense), Net					$	(84	)	$	(188	)	$	(58	)	$	(45	)	$	(64	)	$	(21	)

Notes:

– Data exclude discontinued operations.

– Other, net, includes currency losses of $10 million for the first quarter of 2008.

– Other, net, includes currency gains (losses) of $3 million, $9 million and $(3) million for the second, third and fourth quarters of 2007, respectively.

Page 8

\

MASCO CORPORATION
Condensed Consolidated Statements of Income
Three Months Ended March 31, 2008 & 2007 — Unaudited
(dollars and shares in millions, except per share data)

						Three Months Ended						As a Percent of Sales
			%			March 31,						Three Months Ended March 31,
Line			Change			2008			2007			2008			2007
	1	Net Sales		-13	%	$	2,446		$	2,803			100.0	%		100.0	%
	2	Cost of Sales		-12	%		1,818			2,067			74.3	%		73.7	%
	3	Gross Profit		-15	%		628			736			25.7	%		26.3	%
		Operating Profit
	4	- Before GCE and (Gain) on Sale of Corporate Fixed Assets (3-8)		-32	%		203			300			8.3	%		10.7	%
	5	- After GCE and (Gain) on Sale of Corporate Fixed Assets (3-9)		-37	%		160			252			6.5	%		9.0	%
		S,G&A Expense:
	6	- General Corporate Expense (GCE)		-16	%		43			51			1.8	%		1.8	%
	7	- (Gain) on Sales of Corporate Fixed Assets, Net					—			(3	)		0.0	%		-0.1	%
	8	- All Other		-3	%		425			436			17.4	%		15.6	%
	9	- Total S,G&A Expense		-3	%		468			484			19.1	%		17.3	%
	10	Other Income (Expense), Net					(58	)		(21	)		-2.4	%		-0.7	%
	11	Impairment Charges for Financial Investments					(26	)		—			-1.1	%		0.0	%
	12	Income from Continuing Operations before Income Taxes and Minority Interest (5+10+11)		-67	%		76			231			3.1	%		8.2	%
	13	Income Taxes		-53	%		40			85			1.6	%		3.0	%
		(Tax Rate)					52.6	%		36.8	%
	14	Income from Continuing Operations before Minority Interest		-75	%		36			146			1.5	%		5.2	%
	15	Minority Interest					(12	)		(9	)		-0.5	%		-0.3	%
	16	Income from Continuing Operations		-82	%		24			137			1.0	%		4.9	%
	17	(Loss) Gain from Discontinued Operations, Net					(22	)		6			-0.9	%		0.2	%
	18	Net Income		-99	%	$	2		$	143			0.1	%		5.1	%
		Earnings Per Common Share (Diluted):
		Income from Continuing Operations		-81	%	$	0.07		$	0.35
		(Loss) Gain from Discontinued Operations, Net					(0.06	)		0.02
		Net Income		-98	%	$	0.01		$	0.37
		Average (Diluted) Common Shares		-8	%		356			388

Page 9

MASCO CORPORATION
Condensed Consolidated Balance Sheets — Unaudited
(in millions)

	March 31,		December 31,
	2008		2007
Assets
Current Assets:
Cash and Cash Investments	$	630	$	922
Receivables		1,541		1,405
Assets Held for Sale		112		—
Inventories		1,160		1,126
Prepaid Expenses and Other		345		355
Total Current Assets		3,788		3,808
Property and Equipment, Net		2,261		2,367
Goodwill		3,942		3,938
Other Intangible Assets, Net		321		323
Assets Held for Sale		113		—
Other Assets		464		471
Total Assets	$	10,889	$	10,907
Liabilities
Current Liabilities:
Accounts Payable	$	768	$	714
Liabilities Held for Sale		46		—
Notes Payable		117		122
Accrued Liabilities		932		1,072
Total Current Liabilities		1,863		1,908
Long-term Debt		3,996		3,966
Deferred Income Taxes and Other		1,038		1,008
Total Liabilities		6,897		6,882
Shareholders’ Equity		3,992		4,025
Total Liabilities and Shareholders’ Equity	$	10,889	$	10,907

Page 10

MASCO CORPORATION
Discontinued Operations — Unaudited
(in millions)

	Three Months Ended
	March 31,
	2008			2007
Net Sales	$	65		$	78
Income from Discontinued Operations	$	7		$	5
Gain on Disposal of Discontinued Operations, Net		—			1
Impairment of assets held for sale		(49	)		—
(Loss) Income before Income Tax		(42	)		6
Income Tax Benefit		20			—
(Loss) Income from Discontinued Operations, Net	$	(22	)	$	6

Page 11

MASCO CORPORATION
GAAP Reconciliation of Sales Growth
Excluding the Effect of Acquisitions and Currency Translation — Unaudited
(in millions)

	Three Months Ended
	March 31,
	2008			2007
Consolidated Net Sales, As Reported	$	2,446		$	2,803
- Acquisitions		(33	)		—
Consolidated Net Sales, Excluding Acquisitions	$	2,413		$	2,803
North American Net Sales, As Reported	$	1,893		$	2,258
- Acquisitions		(33	)		—
North American Net Sales, Excluding Acquisitions	$	1,860		$	2,258
International Net Sales, As Reported	$	553		$	545
- Acquisitions		—			—
International Net Sales, Excluding Acquisitions		553			545
- Currency Translation		(53	)		—
International Net Sales, Excluding Acquisitions and Currency Translation	$	500		$	545

Notes:

– Data exclude discontinued operations.

– The Company presents information comparing results from one period to another excluding the results of businesses acquired in order to assess the performance of the underlying businesses and to assess to what extent acquisitions are driving growth.

– The Company also presents information comparing results of International operations from one period to another using constant exchange rates. To present this information, current period results for foreign entities are converted into U.S. dollars using the prior period’s exchange rates, rather than exchange rates for the current period. The Company presents this information in order to assess how the underlying businesses performed in local currencies before taking into account currency fluctuations.

Page 12

MASCO CORPORATION
GAAP Reconciliation of Operating Profit and Margins — Unaudited
(dollars in Millions)

	Three Months Ended March 31,
	2008					2007
	$		Margin			$		Margin
Operating Profit, As Reported	$	160		6.5	%	$	252		9.0	%
Business Rationalizations and Other Initiatives		9					25
Operating Profit, As Reconciled	$	169		6.9	%	$	277		9.9	%

Notes:

– Data exclude discontinued operations.

– The Company believes that certain non-GAAP performance measures and ratios, 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.

Page 13

MASCO CORPORATION
GAAP Reconciliation of Operating Profit and Shareholders’ Equity — Unaudited
(in millions)

	Twelve
	Months Ended
	March 31,
	2008
Operating Profit, As Reported	$	962
Impairment Charges for Goodwill and Other Intangible Assets, Continuing Operations		119
Operating Profit, As Reconciled	$	1,081

	Twelve Months Ended
	March 31,
	2008		2007
Shareholders’ Equity, As Reported	$	3,992	$	4,261
Impairment Charges for Goodwill and Other Intangible Assets (after tax)		208		331
Income Regarding Litigation Settlement (after tax)		—		(1	)
Shareholders’ Equity, As Reconciled	$	4,200	$	4,591

Notes:

– Data exclude discontinued operations.

– The Company believes that certain non-GAAP performance measures and ratios, 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.

– This information is provided as detail for the calculation of return on invested capital (“ROIC”) which is calculated as after-tax operating profit (last twelve months, as reconciled) divided by the total of average debt (net of average cash) and average shareholders’ equity.

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