THIRD QUARTER 2020 AND THE FIRST NINE MONTHS 2020 VERSUS


           THIRD QUARTER 2019 AND THE FIRST NINE MONTHS 2019


                              SALES AND OPERATIONS

The following table sets forth our net sales and operating profit (loss) by business segment and geographic area, dollars in millions:


                                                           Three Months Ended September 30,                   Percent Change
                                                               2020                    2019                    2020  vs.   2019
Net Sales:
Plumbing Products                                      $           1,141          $     1,006                                  13  %
Decorative Architectural Products                                    842                  710                                  19  %

Total                                                  $           1,983          $     1,716                                  16  %

North America                                          $           1,599          $     1,374                                  16  %
International, principally Europe                                    384                  342                                  12  %
Total                                                  $           1,983          $     1,716                                  16  %



                                                            Nine Months Ended September 30,                   Percent Change
                                                               2020                    2019                    2020  vs.   2019
Net Sales:
Plumbing Products                                      $           2,964          $     2,958                                   -  %
Decorative Architectural Products                                  2,364                2,110                                  12  %

Total                                                  $           5,328          $     5,068                                   5  %

North America                                          $           4,337          $     4,033                                   8  %
International, principally Europe                                    991                1,035                                  (4) %
Total                                                  $           5,328          $     5,068                                   5  %



                                                Three Months Ended September 30,              Nine Months Ended September 30,
                                                    2020                   2019                  2020                  2019
Operating Profit (Loss): (A)
Plumbing Products                           $             271          $      179          $         583          $       530
Decorative Architectural Products                         179                 134                    475                  380

Total                                       $             450          $      313          $       1,058          $       910

North America                               $             368          $      262          $         899          $       759
International, principally Europe                          82                  51                    159                  151
Total                                                     450                 313                  1,058                  910
General corporate expense, net                            (26)                (24)                   (70)                 (77)
Operating profit                            $             424          $      289          $         988          $       833

(A) Before general corporate expense, net; see Note M to the condensed consolidated financial statements.


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  We report our financial results in accordance with generally accepted
accounting principles ("GAAP") in the United States of America. However, we
believe 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, our reported results under GAAP.

The following discussion of consolidated results of operations and segment and geographic results refers to the three-month and nine-month periods ended September 30, 2020 compared to the same periods of 2019.


                                   NET SALES

  Net sales increased 16 percent for the three-month period ended September 30,
2020 and five percent for the nine-month period ended September 30, 2020.
Excluding the effect of currency translation, net sales increased 15 percent and
five percent for the three-month and nine-month periods ended September 30,
2020, respectively. The following table reconciles reported net sales to net
sales, excluding the effect of currency translation, in millions:

                                            Three Months Ended September 30,                 Nine Months Ended September 30,
                                                2020                    2019                    2020                    2019
Net sales, as reported                  $           1,983          $     1,716          $           5,328          $     5,068

Currency translation                                  (13)                   -                          9                    -
Net sales, excluding the effect of
currency translation                    $           1,970          $     1,716          $           5,337          $     5,068



  North American net sales increased 16 percent and eight percent for the
three-month and nine-month periods ended September 30, 2020. Higher sales volume
of paints and other coating products, plumbing products and builders' hardware
products, in aggregate, increased sales by 17 percent and nine percent for the
three-month and nine-month periods, respectively. Such increases were slightly
offset by lower net selling prices of paints and other coating products, which
decreased sales by one percent for both periods.

  International net sales increased 12 percent for the three-month period ended
September 30, 2020. In local currencies (including sales in currencies outside
their respective functional currencies), net sales increased nine percent.
Higher sales volume of plumbing products increased sales by nine percent.
International net sales decreased four percent for the nine-month period ended
September 30, 2020. In local currencies, net sales decreased four percent. Lower
sales volume and unfavorable sales mix of plumbing products, in aggregate,
decreased sales by four percent.

  Net sales in the Plumbing Products segment increased 13 percent for the
three-month period ended September 30, 2020. Higher sales volume increased sales
by 12 percent. Favorable foreign currency translation further increased sales by
one percent. Net sales in the Plumbing Products segment was flat for the
nine-month period ended September 30, 2020. Higher sales volume and net selling
prices, in aggregate, increased net sales by one percent, offset by unfavorable
sales mix, which decreased sales by one percent.

  Net sales in the Decorative Architectural Products segment increased 19
percent for the three-month period ended September 30, 2020, due mostly to
higher sales volume of paints and other coating products, and to a lesser
extent, builders' hardware products and lighting products. This increase was
slightly offset by unfavorable net selling prices of paints and other coating
products and builders' hardware products. Net sales in the Decorative
Architectural Products segment increased 12 percent for the nine-month period
ended September 30, 2020, due mostly to higher sales volume of paints and other
coating products, and to a lesser extent, builders' hardware products. This
increase was slightly offset by unfavorable net selling prices of paints and
other coating products and lower sales volume of lighting products.








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                                OPERATING PROFIT

  Our gross profit margin was 37.9 percent and 36.2 percent for the three-month
and nine-month periods ended September 30, 2020, respectively, compared to 35.6
percent for both comparable periods of 2019. Gross profit margins for the
three-month period ended September 30, 2020 were positively impacted by
increased sales volume, cost savings initiatives, including actions taken to
mitigate the coronavirus disease 2019 ("COVID-19") pandemic impact, as well as
decreased commodity costs, partially attributed to tariff mitigation. Such
increases were partially offset by lower net selling prices. Gross profit
margins for the nine-month period ended September 30, 2020 were positively
impacted by increased sales volume and cost savings initiatives, including
actions taken to mitigate the impact of the COVID-19 pandemic. Such increases
were partially offset by lower net selling prices, unfavorable sales mix and
increased commodity costs, primarily attributed to tariffs.

  Selling, general and administrative expenses, as a percentage of sales, were
16.5 percent and 17.6 percent for the three-month and nine-month periods ended
September 30, 2020, respectively, compared to 18.8 percent and 19.0 percent for
the comparable periods of 2019. Selling, general and administrative expenses
were positively impacted by cost containment activities including those actions
taken to mitigate the COVID-19 pandemic impact and leverage of fixed expenses
due primarily to increased sales volume.

  Operating profit in the Plumbing Products segment for the three-month period
ended September 30, 2020 was positively impacted by increased sales volume, cost
savings initiatives, including actions taken to mitigate the COVID-19 pandemic
impact and decreased commodity costs, partially attributed to tariff mitigation.
Operating profit in the Plumbing Products segment for the nine-month period
ended September 30, 2020 was positively impacted by cost savings initiatives,
including actions taken to mitigate the COVID-19 pandemic impact, favorable net
selling prices and higher sales volume. These positive impacts were partially
offset by increases in commodity costs, primarily attributed to tariffs.

  Operating profit in the Decorative Architectural Products segment for the
three-month period ended September 30, 2020 benefited primarily from increased
sales volume, as well as cost savings initiatives, including actions taken to
mitigate the COVID-19 pandemic impact and decreased commodity costs. These
positive impacts were partially offset by lower net selling prices. Operating
profit in the Decorative Architectural Products segment for the nine-month
period ended September 30, 2020 benefited primarily from increased sales volume,
as well as cost savings initiatives, including actions taken to mitigate the
COVID-19 pandemic impact. Additionally, operating profit was positively impacted
by the non-recurrence of a 2019 non-cash impairment charge related to an other
indefinite-lived intangible asset for a trademark associated with lighting
products. These positive impacts were partially offset by unfavorable net
selling prices and higher fixed expenses in our lighting business.

                          OTHER INCOME (EXPENSE), NET

  Interest expense for the three-month and nine-month periods ended September
30, 2020 was $40 million and $110 million, respectively, compared to $39 million
and $119 million for the three-month and nine-month periods ended September 30,
2019, respectively. In the third quarter of 2020, we recognized a loss on debt
extinguishment of $6 million on the early retirement of our 3.5% Notes due April
1, 2021, which was recorded to interest expense. This increase was offset by
lower interest charges due to the extinguishment of our 7.125% Notes due March
15, 2020 in the fourth quarter of 2019.

  Other, net, for the three-month and nine-month periods ended September 30,
2020 included $9 million and $25 million, respectively, of net periodic pension
and post-retirement benefit cost, $3 million and $7 million, respectively, of
dividend income related to preferred stock of ACProducts Holding, Inc., and $1
million of foreign currency transaction gains for the three-month period and $6
million of foreign currency transaction losses for the nine-month period. Other,
net, for the three-month and nine-month periods ended September 30, 2019
included $6 million and $17 million, respectively, of net periodic pension and
post-retirement benefit cost and $5 million and $3 million, respectively of
foreign currency transaction losses.






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INCOME AND INCOME PER COMMON SHARE FROM CONTINUING OPERATIONS - ATTRIBUTABLE TO

MASCO CORPORATION

  Income from continuing operations for the three-month and nine-month periods
ended September 30, 2020 was $275 million and $618 million, respectively,
compared to $163 million and $481 million for the comparable periods of 2019.
Diluted income per common share for the three-month and nine-month periods ended
September 30, 2020 was $1.05 and $2.31, respectively, per common share, compared
with $0.56 and $1.65, respectively, per common share for the comparable periods
of 2019.

  Our effective tax rate was 23 percent and 24 percent for the three-month and
nine-month periods ended September 30, 2020, respectively. Our tax rates were
lower than our normalized tax rate of 26 percent due primarily to a $10 million
reduction in income tax expense in both periods, resulting from IRS guidance
released during the third quarter of 2020, that allows us to exclude certain
high-taxed foreign income from the U.S. tax effects on Global Intangible
Low-taxed Income. Also, our effective tax rate for the nine-month period was
lower than our normalized tax rate due to an additional $5 million income tax
benefit on stock-based compensation.

Our effective tax rate was 27 percent and 26 percent for the three-month and
nine-month periods ended September 30, 2019, respectively. Our normalized tax
rate for 2019 was 26 percent.

                          OTHER FINANCIAL INFORMATION

  Our current ratio was 2.0 to 1 and 1.8 to 1 at September 30, 2020 and December
31, 2019, respectively. The increase in our current ratio is due primarily to
increased cash on hand as a result of the temporary suspension of our share
repurchase activity beginning in the first quarter of 2020. We have announced
our intention to resume our share repurchase activity in the fourth quarter as
part of our strategic initiative to drive long-term shareholder value. We
anticipate using approximately $100 million of cash for share repurchases in the
fourth quarter, for a total of approximately $700 million of share repurchases
in 2020.

  For the nine-month period ended September 30, 2020, net cash provided by
operating activities was $573 million. Cash provided by operations of $590
million was affected by the income tax expense of $179 million resulting from
the gain recorded in connection with the divestiture of Cabinetry. Additionally,
cash from operating activities was affected by increased receivables and
payables as a result of increased demand for our products in the third quarter
of 2020.

  For the nine-month period ended September 30, 2020, net cash used for
financing activities was $721 million, primarily due to $602 million for the
repurchase and retirement of our common stock (including 0.4 million shares
repurchased to offset the dilutive impact of restricted stock units granted in
2020), $400 million for the early retirement of our 3.5% Notes due April 1,
2021, $108 million for the payment of cash dividends, $23 million for dividends
paid to noncontrolling interest and $25 million for employee withholding taxes
paid on stock-based compensation. These uses of cash were partially offset by
the issuances of $300 million of 2.0% Notes due October 1, 2030 and an
incremental $100 million on our existing 4.5% Notes due May 15, 2047 that was
issued at a premium of $19 million and $26 million of proceeds from the exercise
of stock options.

  For the nine-month period ended September 30, 2020, net cash provided by
investing activities was $770 million, comprised of $853 million of proceeds
from the sale of Cabinetry, net of cash disposed, and $15 million from the
finalization of working capital items on the sale of Milgard, partially offset
by $72 million for capital expenditures and $24 million for the acquisition of
SmarTap, net of cash acquired.

  Our cash and cash investments were $1.3 billion and $697 million at September
30, 2020 and December 31, 2019, respectively. Our cash and cash investments
consist of overnight interest-bearing money market demand accounts, time deposit
accounts, and money market mutual funds containing government securities and
treasury obligations.

  Of the $1.3 billion and $697 million of cash and cash investments held at
September 30, 2020 and December 31, 2019, $324 million and $297 million,
respectively, was held in our foreign subsidiaries. If these funds were needed
for our operations in the U.S., their repatriation into the U.S. would not
result in significant additional U.S. income tax or foreign withholding tax, as
we have recorded such taxes on substantially all undistributed foreign earnings,
except for those that are legally restricted.

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On September 18, 2020, we issued $300 million of 2.0% Notes due October 1, 2030
and received proceeds of $300 million, net of discount, for the issuance of the
2030 Notes. Also on September 18, 2020, we issued an incremental $100 million on
our existing 4.5% Notes due May 15, 2047 and received proceeds of $119 million,
including a premium, for the issuance of the 2047 Notes. The incremental $100
million will form a single series with the existing $300 million of 4.5% Notes
due May 15, 2047. The 2030 Notes and 2047 Notes are senior indebtedness and are
redeemable at our option at the applicable redemption price. On September 29,
2020, proceeds from the debt issuances were used to repay and early retire $400
million of our 3.5% Notes due April 1, 2021. In connection with this early
retirement, we incurred a loss on debt extinguishment of $6 million, which was
recorded as interest expense.

  On March 13, 2019, we entered into a credit agreement (the "Credit Agreement")
with an aggregate commitment of $1.0 billion and a maturity date of March 13,
2024. Under the Credit Agreement, at our request and subject to certain
conditions, we can increase the aggregate commitment up to an additional $500
million with the current lenders or new lenders. Upon entry into the Credit
Agreement, our credit agreement dated March 28, 2013, as amended, with an
aggregate commitment of $750 million, was terminated. See Note I to the
condensed consolidated financial statements.

  The Credit Agreement contains financial covenants requiring us to maintain
(A) a net leverage ratio, as adjusted for certain items, not exceeding 4.0 to
1.0, and (B) a minimum interest coverage ratio, as adjusted for certain items,
not less than 2.5 to 1.0.  We were in compliance with all covenants and no
borrowings were outstanding under our Credit Agreement at September 30, 2020.

  As part of our ongoing efforts to improve our cash flow and related liquidity,
we work with suppliers to optimize our terms and conditions, including extending
payment terms. We also facilitate a voluntary supply chain finance program (the
"program") to provide certain of our suppliers with the opportunity to sell
receivables due from us to participating financial institutions at the sole
discretion of both the suppliers and the financial institutions. A third party
administers the program; our responsibility is limited to making payment on the
terms originally negotiated with our supplier, regardless of whether the
supplier sells its receivable to a financial institution. We do not enter into
agreements with any of the participating financial institutions in connection
with the program. The range of payment terms we negotiate with our suppliers is
consistent, irrespective of whether a supplier participates in the program.

  All outstanding payments owed under the program are recorded within accounts
payable in our condensed consolidated balance sheets. The amounts owed to
participating financial institutions under the program and included in accounts
payable for our continuing operations were $47 million and $29 million at
September 30, 2020 and December 31, 2019, respectively. We account for all
payments made under the program as a reduction to our cash flows from operations
and reported within our increase in accounts payable and accrued liabilities,
net, line within our condensed consolidated statements of cash flows. The
amounts settled through the program and paid to participating financial
institutions were $97 million and $92 million for our continuing operations
during the nine-month periods ended September 30, 2020 and 2019, respectively. A
downgrade in our credit rating or changes in the financial markets could limit
the financial institutions' willingness to commit funds to, and participate in,
the program. We do not believe such risk would have a material impact on our
working capital or cash flows, as substantially all of our payments are made
outside of the program.

  The COVID-19 pandemic did not impact our financial performance during the
third quarter of 2020 to the extent we anticipated. Operational activity that
was previously slowed at certain of our facilities, as a result of the pandemic,
have largely resumed operations at normal capacities enabling them to progress
on the fulfillment of production and distribution backlogs that developed in the
first half of the year as well as to meet current consumer demand.

Many, but not all, of our businesses remained operating in the first nine months
of 2020 because the products we provide are critical to infrastructure sectors
and the day-to-day operations of homes and businesses in our communities as
defined by applicable local orders. However, certain of our facilities
experienced full closures ranging from a few days to several weeks, and if
certain governmental orders are reimposed or if we are required to close a
facility for employee safety reasons, we could experience new or extended
closures which might adversely impact our ability to produce and distribute our
products. Finally, we may experience supply chain disruptions, particularly
disruptions related to our ability to source plumbing, lighting and builders'
hardware products.


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We may experience an adverse impact to our fourth quarter of 2020 results due to
economic contraction as a result of high unemployment levels and remaining or
potential renewed shelter-in-place and social distancing orders. However, given
our portfolio of lower ticket, repair and remodel-oriented products, we expect
that demand for our products will continue to be solid as we recover from the
COVID-19 pandemic.

We believe that our present cash balance, cash flows from operations, and
borrowing availability under our Credit Agreement are sufficient to fund our
near-term working capital and other investment needs. We anticipate that our
longer-term working capital and other general corporate requirements will be
satisfied through cash flows from operations and, to the extent necessary, from
bank borrowings and future financial market activities. However, due to the
highly uncertain nature, severity and duration or resurgence of the COVID-19
pandemic and its impact on our customers, suppliers and employees, we are unable
to fully estimate the extent of the impact it may have on our future financial
condition.

In preparing this Form 10-Q, including our financial statements contained in
this report, we made certain estimates and assumptions that affect or could have
affected the reported amounts of assets and liabilities, disclosure of any
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. As
the impact of the COVID-19 pandemic to our business becomes more certain, we
will update and refine our estimates and assumptions, which could affect the
reported amounts of assets and liabilities and related disclosures, and future
revenues and expenses.

We continue to be committed to the safety and well-being of our employees during
this time, and, led by our cross-functional COVID-19 task force, we have
employed best practices and followed guidance from the World Health Organization
and the Centers for Disease Control and Prevention. We have implemented and are
continuing to implement alternative work arrangements to support the health and
safety of our employees, including working remotely and avoiding large
gatherings. In addition, we have modified work areas and workstations to provide
protective measures for employees, are staggering shifts, requiring the use of
face coverings, practicing social distancing and increasing the cleaning of our
facilities, and in the event that we learn of an employee testing positive for
COVID-19, we are completing contact tracing and requiring impacted employees to
self-quarantine.

                            OUTLOOK FOR THE COMPANY

  We continue to execute our strategies of leveraging our strong brand
portfolio, industry-leading positions and the Masco Operating System, our
methodology to drive growth and productivity, to create long-term shareholder
value. We believe that our strong financial position and cash flow generation,
together with our investments in our industry-leading branded building products,
our continued focus on innovation and disciplined capital allocation, will allow
us to drive long-term growth and create value for our shareholders. While we
continue to remain uncertain regarding the short-term impact that the COVID-19
pandemic may have on our businesses, we remain confident in the fundamentals of
our businesses and long-term strategy.





















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                           FORWARD-LOOKING STATEMENTS

  This report contains statements that reflect our views about our future
performance and constitute "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. Forward-looking statements can be
identified by words such as "outlook," "believe," "anticipate," "appear," "may,"
"will," "should," "intend," "plan," "estimate," "expect," "assume," "seek,"
"forecast," and similar references to future periods. Our views about future
performance 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 the
levels of residential repair and remodel activity and new home construction, our
ability to maintain our strong brands and reputation and to develop innovative
products, our ability to maintain our competitive position in our industries,
our reliance on key customers, the length and severity of the ongoing COVID-19
pandemic, including its impact on domestic and international economic activity,
consumer demand for our products, our production capabilities, our employees and
our supply chain, the cost and availability of materials and the imposition of
tariffs, our dependence on third-party suppliers, risks associated with our
international operations and global strategies, our ability to achieve the
anticipated benefits of our strategic initiatives, our ability to successfully
execute our acquisition strategy and integrate businesses that we have and may
acquire, our ability to attract, develop and retain talented personnel, risks
associated with our reliance on information systems and technology, and our
ability to achieve the anticipated benefits from our investments in new
technology. 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 other
filings we make with the Securities and Exchange Commission.  The
forward-looking statements in this report speak only as of the date of this
report. 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.

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MASCO CORPORATION
                            Item 4.
                              CONTROLS AND PROCEDURES



a.   Evaluation of Disclosure Controls and Procedures.

  The Company's principal executive officer and principal financial officer have
concluded, based on an evaluation of the Company's disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or
15d-15(e)) as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15
that, as of September 30, 2020, the Company's disclosure controls and procedures
were effective.

b. Changes in Internal Control over Financial Reporting.



  In connection with the evaluation of the Company's internal control over
financial reporting that occurred during the quarter ended September 30, 2020,
which is required under the Securities Exchange Act of 1934 by paragraph (d) of
Exchange Rules 13a-15 or 15d-15 (as defined in paragraph (f) of Rule 13a-15),
management determined that there was no change that materially affected or is
reasonably likely to materially affect internal control over financial
reporting.



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                               MASCO CORPORATION

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