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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 1-5794
Masco Corporation
(Exact name of Registrant as Specified in its Charter)

Delaware |  | 38-1794485
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
17450 College Parkway, | Livonia, | Michigan |  | 48152
(Address of Principal Executive Offices) |  | (Zip Code)

(313) 274-7400
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class |  | Trading Symbol |  | Name of Each Exchange On Which Registered
Common Stock, $1.00 par value |  | MAS |  | New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☑ |  | Accelerated filer | ☐
Non-accelerated filer | ☐ |  | Smaller reporting company | ☐
|  |  | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class |  | Shares Outstanding at March 31, 2023
Common stock, par value $1.00 per share |  | 225,088,525

MASCO CORPORATION
INDEX

|  |  |  | Page
|  | PART I. FINANCIAL INFORMATION |  |
Item 1. |  | Financial Statements (Unaudited): |  | 1
|  | Condensed Consolidated Balance Sheets - as of March 31, 2023 and December 31, 2022 |  | 1
|  | Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 |  | 2
|  | Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and 2022 |  | 3
|  | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 |  | 4
|  | Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2023 and 2022 |  | 5
|  | Notes to Condensed Consolidated Financial Statements |  | 6
Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 12
Item 4. |  | Controls and Procedures |  | 20
|  | PART II. OTHER INFORMATION |  | 21
Item 1. |  | Legal Proceedings |  | 21
I tem 1A. |  | Risk Factors |  | 21
I tem 2. |  | Unregistered Sales of Equity Securiti es and Use of Proceeds |  | 21
Item 6. |  | Exhibits |  | 22
|  | Signature |  | 23

MASCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, 2023 and December 31, 2022
(In Millions, Except Share Data)

| March 31, 2023 |  | December 31, 2022
ASSETS
Current assets: |  |  |
Cash and cash investments | $ | 510 |  |  | $ | 452 |
Receivables | 1,329 |  |  | 1,149 |
Inventories | 1,196 |  |  | 1,236 |
Prepaid expenses and other | 113 |  |  | 109 |
Total current assets | 3,148 |  |  | 2,946 |
Property and equipment, net | 1,019 |  |  | 975 |
Goodwill | 540 |  |  | 537 |
Other intangible assets, net | 344 |  |  | 350 |
Operating lease right-of-use assets | 266 |  |  | 266 |
Other assets | 113 |  |  | 113 |
Total assets | $ | 5,430 |  |  | $ | 5,187 |
LIABILITIES
Current liabilities: |  |  |
Accounts payable | $ | 913 |  |  | $ | 877 |
Notes payable | 413 |  |  | 205 |
Accrued liabilities | 692 |  |  | 807 |
Total current liabilities | 2,018 |  |  | 1,889 |
Long-term debt | 2,946 |  |  | 2,946 |
Noncurrent operating lease liabilities | 254 |  |  | 255 |
Other liabilities | 332 |  |  | 339 |
Total liabilities | $ | 5,550 |  |  | $ | 5,429 |
Commitments and contingencies (Note L) |  |  |
Redeemable noncontrolling interest | 20 |  |  | 20 |
EQUITY
Masco Corporation's shareholders' equity: |  |  |
Common shares, par value $1 per share Authorized shares: 1,400,000,000; Issued and outstanding: 2023 – 225,000,000; 2022 – 225,300,000 | 225 |  |  | 225 |
Preferred shares authorized: 1,000,000; Issued and outstanding: 2023 and 2022 – None | — |  |  | — |
Paid-in capital | — |  |  | 16 |
Retained deficit | (847) |  |  | (947) |
Accumulated other comprehensive income | 243 |  |  | 226 |
Total Masco Corporation's shareholders' deficit | (379) |  |  | (480) |
Noncontrolling interest | 239 |  |  | 218 |
Total equity | (140) |  |  | (262) |
Total liabilities and equity | $ | 5,430 |  |  | $ | 5,187 |

See notes to condensed consolidated financial statements.
1

MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended March 31, 2023 and 2022
(In Millions, Except Per Common Share Data)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Net sales |  |  |  |  | $ | 1,979 |  |  | $ | 2,201 |
Cost of sales |  |  |  |  | 1,310 |  |  | 1,497 |
Gross profit |  |  |  |  | 669 |  |  | 704 |
Selling, general and administrative expenses |  |  |  |  | 354 |  |  | 351 |
Operating profit |  |  |  |  | 315 |  |  | 353 |
Other income (expense), net: |  |  |  |  |  |  |
Interest expense |  |  |  |  | (28) |  |  | (25) |
Other, net |  |  |  |  | (2) |  |  | (1) |
|  |  |  |  | (30) |  |  | (26) |
Income before income taxes |  |  |  |  | 285 |  |  | 327 |
Income tax expense |  |  |  |  | 64 |  |  | 75 |
Net income |  |  |  |  | 221 |  |  | 252 |
Less: Net income attributable to noncontrolling interest |  |  |  |  | 16 |  |  | 19 |
Net income attributable to Masco Corporation |  |  |  |  | $ | 205 |  |  | $ | 233 |
Income per common share attributable to Masco Corporation: |  |
Basic: |  |  |  |  |  |  |
Net income |  |  |  |  | $ | 0.91 |  |  | $ | 0.98 |
Diluted: |  |  |  |  |  |  |
Net income |  |  |  |  | $ | 0.90 |  |  | $ | 0.97 |

See notes to condensed consolidated financial statements.
2

MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
For the Three Months Ended March 31, 2023 and 2022
(In Millions)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Net income |  |  |  |  | $ | 221 |  |  | $ | 252 |
Less: Net income attributable to noncontrolling interest |  |  |  |  | 16 |  |  | 19 |
Net income attributable to Masco Corporation |  |  |  |  | $ | 205 |  |  | $ | 233 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |
Cumulative translation adjustment |  |  |  |  | $ | 22 |  |  | $ | (11) |
Pension and other post-retirement benefits |  |  |  |  | — |  |  | 1 |
Other comprehensive income (loss), net of tax |  |  |  |  | 22 |  |  | (10) |
Less: Other comprehensive income (loss) attributable to the noncontrolling interest |  |  |  |  | 5 |  |  | (4) |
Other comprehensive income (loss) attributable to Masco Corporation |  |  |  |  | $ | 17 |  |  | $ | (6) |
Total comprehensive income |  |  |  |  | $ | 243 |  |  | $ | 242 |
Less: Total comprehensive income attributable to noncontrolling interest |  |  |  |  | 21 |  |  | 15 |
Total comprehensive income attributable to Masco Corporation |  |  |  |  | $ | 222 |  |  | $ | 227 |

See notes to condensed consolidated financial statements.
3

MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Three Months Ended March 31, 2023 and 2022
(In Millions)

| Three Months Ended March 31,
| 2023 |  | 2022
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: |  |  |
Cash provided by operations | $ | 286 |  |  | $ | 334 |
Increase in receivables | (194) |  |  | (349) |
Decrease (increase) in inventories | 45 |  |  | (127) |
Decrease in accounts payable and accrued liabilities, net | (104) |  |  | (85) |
Net cash from (for) operating activities | 33 |  |  | (227) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES: |  |  |
Purchase of Company common stock | (53) |  |  | (364) |
Proceeds from revolving credit borrowings, net | 210 |  |  | 263 |
Cash dividends paid | (65) |  |  | (67) |
Proceeds from the exercise of stock options | 9 |  |  | 1 |
Employee withholding taxes paid on stock-based compensation | (20) |  |  | (17) |
Decrease in debt, net | (3) |  |  | (3) |
Net cash from (for) financing activities | 78 |  |  | (187) |
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES: |  |  |
Capital expenditures | (61) |  |  | (27) |
Other, net | 2 |  |  | 1 |
Net cash for investing activities | (59) |  |  | (26) |
Effect of exchange rate changes on cash and cash investments | 6 |  |  | (7) |
CASH AND CASH INVESTMENTS: |  |  |
Increase (decrease) for the period | 58 |  |  | (447) |
At January 1 | 452 |  |  | 926 |
At March 31 | $ | 510 |  |  | $ | 479 |

See notes to condensed consolidated financial statements.
4

MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
For the Three Months Ended March 31, 2023 and 2022
(In Millions, Except Per Common Share Data)

| Total |  | Common Shares ($1 par value) |  | Paid-In Capital |  | Retained (Deficit) Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Noncontrolling Interest
Balance, January 1, 2022 | $ | 56 |  |  | $ | 241 |  |  | $ | — |  |  | $ | (652) |  |  | $ | 232 |  |  | $ | 235 |
Total comprehensive income (loss) | 242 |  |  | — |  |  | — |  |  | 233 |  |  | (6) |  |  | 15 |
Shares issued | 1 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |
Shares retired: |  |  |  |  |  |  |  |  |  |  |
Repurchased | (364) |  |  | (6) |  |  | (27) |  |  | (331) |  |  | — |  |  | — |
Surrendered (non-cash) | (17) |  |  | — |  |  | — |  |  | (17) |  |  | — |  |  | — |
Cash dividends declared | (67) |  |  | — |  |  | — |  |  | (67) |  |  | — |  |  | — |
Redeemable noncontrolling interest - redemption adjustment | 1 |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |
Stock-based compensation | 27 |  |  | — |  |  | 27 |  |  | — |  |  | — |  |  | — |
Balance, March 31, 2022 | $ | (121) |  |  | $ | 236 |  |  | $ | — |  |  | $ | (833) |  |  | $ | 226 |  |  | $ | 250 |

Balance, January 1, 2023 | $ | (262) |  |  | $ | 225 |  |  | $ | 16 |  |  | $ | (947) |  |  | $ | 226 |  |  | $ | 218 |
Total comprehensive income | 243 |  |  | — |  |  | — |  |  | 205 |  |  | 17 |  |  | 21 |
Shares issued | 6 |  |  | 1 |  |  | 5 |  |  | — |  |  | — |  |  | — |
Shares retired: |  |  |  |  |  |  |  |  |  |  |
Repurchased | (56) |  |  | (1) |  |  | (32) |  |  | (23) |  |  | — |  |  | — |
Surrendered (non-cash) | (17) |  |  | — |  |  | — |  |  | (17) |  |  | — |  |  | — |
Cash dividends declared | (65) |  |  | — |  |  | — |  |  | (65) |  |  | — |  |  | — |
Stock-based compensation | 11 |  |  | — |  |  | 11 |  |  | — |  |  | — |  |  | — |
Balance, March 31, 2023 | $ | (140) |  |  | $ | 225 |  |  | $ | — |  |  | $ | (847) |  |  | $ | 243 |  |  | $ | 239 |

See notes to condensed consolidated financial statements.
5

MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
A. ACCOUNTING POLICIES
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to fairly state our financial position at March 31, 2023, and our results of operations, comprehensive income (loss), cash flows and changes in shareholders' equity for the three months ended March 31, 2023 and 2022. The condensed consolidated balance sheet at December 31, 2022 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted ("GAAP") in the United States of America.
Recently Adopted Accounting Pronouncements. In September 2022, the Financial Accounting Standards Board ("FASB") issued ASU 2022-04, "Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” which requires that an entity that uses a supplier finance program in connection with the purchase of goods or services disclose information about the program’s nature, activity during the period, changes from period to period, and potential magnitude. We adopted this standard for annual periods on a retrospective basis, including interim periods within those annual periods, beginning January 1, 2023, except for the amendment on rollforward information, which is effective prospectively for annual periods beginning January 1, 2024 and will be adopted at that time. The adoption of this guidance modified our disclosures, but did not have an impact on our financial position and results of operations.
Recently Issued Accounting Pronouncements. In March 2023, the FASB issued ASU 2023-02, "Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” which permits an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received. ASU 2023-02 is effective for annual periods on either a modified retrospective or retrospective basis, including interim periods within those annual periods, beginning January 1, 2024. Early adoption is permitted. We plan to adopt this standard beginning January 1, 2024, and we are currently reviewing the provisions of this standard and the impact, if any, the adoption of this guidance will have on our financial position and results of operations.
B. REVENUE
Our revenues are derived from sales to customers in North America and Internationally, principally Europe. Net sales from these geographic markets, by segment, were as follows, in millions:

| Three Months Ended March 31, 2023
| Plumbing Products |  | Decorative Architectural Products |  | Total
Primary geographic markets: |  |  |  |  |
North America | $ | 798 |  |  | $ | 757 |  |  | $ | 1,555 |
International, principally Europe | 424 |  |  | — |  |  | 424 |
Total | $ | 1,222 |  |  | $ | 757 |  |  | $ | 1,979 |

| Three Months Ended March 31, 2022
| Plumbing Products |  | Decorative Architectural Products |  | Total
Primary geographic markets: |  |  |  |  |
North America | $ | 892 |  |  | $ | 842 |  |  | $ | 1,734 |
International, principally Europe | 467 |  |  | — |  |  | 467 |
Total | $ | 1,359 |  |  | $ | 842 |  |  | $ | 2,201 |

We recognized $1 million and $5 million of revenue for the three months ended March 31, 2023 and 2022, respectively, related to performance obligations settled in previous years.
6

MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
B. REVENUE (Concluded)
Our contract asset balance was $2 million and $1 million at March 31, 2023 and December 31, 2022, respectively. Our contract liability balance was $24 million and $61 million at March 31, 2023 and December 31, 2022, respectively.
Changes in the allowance for credit losses deducted from accounts receivable were as follows, in millions:

| Three Months Ended March 31, 2023 |  | Twelve Months Ended December 31, 2022
Balance at January 1 | $ | 8 |  |  | $ | 6 |
Provision for expected credit losses during the period | — |  |  | 5 |
Write-offs charged against the allowance | (1) |  |  | (4) |
Recoveries of amounts previously written off | 1 |  |  | 1 |
Balance at end of period | $ | 8 |  |  | $ | 8 |

C. DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense was $35 million for both the three months ended March 31, 2023 and 2022.
D. INVENTORIES
The components of inventory were as follows, in millions:

| At March 31, 2023 |  | At December 31, 2022
Finished goods | $ | 750 |  |  | $ | 715 |
Raw materials | 338 |  |  | 408 |
Work in process | 108 |  |  | 113 |
Total | $ | 1,196 |  |  | $ | 1,236 |

E. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill at March 31, 2023, by segment, was as follows, in millions:

| Gross Goodwill At March 31, 2023 |  | Accumulated Impairment Losses |  | Net Goodwill At March 31, 2023
Plumbing Products | $ | 614 |  |  | $ | (301) |  |  | $ | 313 |
Decorative Architectural Products | 366 |  |  | (139) |  |  | 227 |
Total | $ | 980 |  |  | $ | (440) |  |  | $ | 540 |

The changes in the carrying amount of goodwill for the three months ended March 31, 2023, by segment, were as follows, in millions:

| Gross Goodwill At December 31, 2022 |  | Accumulated Impairment Losses |  | Net Goodwill At December 31, 2022 |  |  |  |  |  |  |  | Foreign Currency Translation |  | Net Goodwill At March 31, 2023
Plumbing Products | $ | 611 |  |  | $ | (301) |  |  | $ | 310 |  |  |  |  |  |  |  |  | $ | 3 |  |  | $ | 313 |
Decorative Architectural Products | 366 |  |  | (139) |  |  | 227 |  |  |  |  |  |  |  |  | — |  |  | 227 |
Total | $ | 977 |  |  | $ | (440) |  |  | $ | 537 |  |  |  |  |  |  |  |  | $ | 3 |  |  | $ | 540 |

7

MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
E. GOODWILL AND OTHER INTANGIBLE ASSETS (Concluded)
The carrying value of our other indefinite-lived intangible assets was $102 million at both March 31, 2023 and December 31, 2022 and principally included registered trademarks. The carrying value of our definite-lived intangible assets wa s $242 million (net of accumulated amortization o f $100 million) at March 31, 2023 and $248 million (net of accumulated amortization of $94 million) at December 31, 2022, and principally included customer relationships.
F. SUPPLIER FINANCE PROGRAM
We 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 confirmed as valid under the program and included in accounts payable were $52 million and $50 million at March 31, 2023 and December 31, 2022, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $26 million and $29 million at March 31, 2023 and December 31, 2022, respectively. All payments made under the program are recorded as a decrease in accounts payable and accrued liabilities, net, in our condensed consolidated statements of cash flows.
G. DEBT
On April 26, 2022, we entered into a revolving credit agreement (the “2022 Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of April 26, 2027. Under the 2022 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.
The 2022 Credit Agreement provides for an unsecured revolving credit facility available to us and one of our foreign subsidiaries in U.S. dollars, European euros, British pounds sterling, Canadian dollars and certain other currencies for revolving credit loans, swingline loans and letters of credit. Borrowings under the revolving credit loans denominated in any agreed upon currency other than U.S. dollars are limited to the equivalent of $500 million. We can also borrow swingline loans up to $125 million and obtain letters of credit of up to $25 million. Outstanding letters of credit under the 2022 Credit Agreement reduce our borrowing capacity and we had no outstanding letters of credit under the 2022 Credit Agreement at March 31, 2023.
The 2022 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) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0.
In order for us to borrow under the 2022 Credit Agreement, there must not be any default in our covenants in the 2022 Credit Agreement (i.e., in addition to the two financial covenants described above, principally limitations on subsidiary debt, negative pledge restrictions, and requirements relating to legal compliance, maintenance of our properties and insurance) and our representations and warranties in the 2022 Credit Agreement must be true in all material respects on the date of borrowing (i.e., principally no material adverse change or litigation likely to result in a material adverse change, since December 31, 2021, no material ERISA or environmental non-compliance, and no material tax deficiency). We were in compliance with all covenants and $210 million was borrowed and outstanding at an interest rate of 5.974% at March 31, 2023.
8

MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
G. DEBT (Concluded)
On April 26, 2022, we entered into a 364-day $500 million senior unsecured delayed draw term loan due April 26, 2023 with a syndicate of lenders. The senior unsecured term loan and commitments thereunder are subject to prepayment or termination at our option and the loans will bear interest at SOFR plus a spread adjustment and 0.70%. The covenants, including the financial covenants, are substantially the same as those in the 2022 Credit Agreement. We repaid $300 million during 2022.
Subsequent to March 31, 2023, we increased our borrowing under the 2022 Credit Agreement to $266 million at a weighted average interest rate of 6.190%, and repaid the remaining $200 million outstanding under the term loan.
Fair Value of Debt. The fair value of our short-term and long-term fixed-rate debt instruments is based principally upon modeled market prices for the same or similar issues, which are Level 1 inputs. The 364-day term loan has an interest rate that resets monthly and the fair value of this instrument approximates the carrying value at March 31, 2023. The aggregate estimated market value of our short-term and long-term debt at March 31, 2023 was approximately $3.0 billion, compared with the aggregate carrying value of $3.4 billion. The aggregate estimated market value of our short-term and long-term debt at December 31, 2022 was approximately $2.7 billion, compared with the aggregate carrying value of $3.2 billion.
H. SEGMENT INFORMATION
Information by segment and geographic area was as follows, in millions:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  |  |  | 2023 |  | 2022 |  | 2023 |  | 2022
|  |  |  |  | Net Sales (A) |  | Operating Profit
Our operations by segment were: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plumbing Products |  |  |  |  |  |  |  |  | $ | 1,222 |  |  | $ | 1,359 |  |  | $ | 206 |  |  | $ | 228 |
Decorative Architectural Products |  |  |  |  |  |  |  |  | 757 |  |  | 842 |  |  | 132 |  |  | 155 |
Total |  |  |  |  |  |  |  |  | $ | 1,979 |  |  | $ | 2,201 |  |  | $ | 338 |  |  | $ | 383 |
Our operations by geographic area were: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  |  |  |  |  |  |  |  | $ | 1,555 |  |  | $ | 1,734 |  |  | $ | 266 |  |  | $ | 300 |
International, principally Europe |  |  |  |  |  |  |  |  | 424 |  |  | 467 |  |  | 72 |  |  | 83 |
Total, as above |  |  |  |  |  |  |  |  | $ | 1,979 |  |  | $ | 2,201 |  |  | 338 |  |  | 383 |
General corporate expense, net |  |  |  |  |  |  |  |  |  |  |  |  | (23) |  |  | (30) |
Operating profit |  |  |  |  |  |  |  |  |  |  |  |  | 315 |  |  | 353 |
Other income (expense), net |  |  |  |  |  |  |  |  |  |  |  |  | (30) |  |  | (26) |
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  | $ | 285 |  |  | $ | 327 |

(A) Inter-segment sales were not material.
9

MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
I. OTHER INCOME (EXPENSE), NET
Other, net, which is included in other income (expense), net, was as follows, in millions:

|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Net periodic pension and post-retirement benefit expense |  |  |  |  | $ | (3) |  |  | $ | (2) |
Foreign currency transaction gains |  |  |  |  | 1 |  |  | 4 |
Income from cash and cash investments |  |  |  |  | 1 |  |  | — |
Realized gains from private equity funds |  |  |  |  | 1 |  |  | — |
Contingent consideration (A) |  |  |  |  | — |  |  | (4) |
Gain on sale of business (B) |  |  |  |  | — |  |  | 2 |
Other items, net |  |  |  |  | (2) |  |  | (1) |
Total other, net |  |  |  |  | $ | (2) |  |  | $ | (1) |

(A)In the first quarter of 2022, we recognized $4 million of expense from the revaluation of contingent consideration related to our acquisition of Kraus USA Inc.
(B)In the first quarter of 2022, we recognized a pre-tax post-closing gain related to the finalization of working capital items related to the divestiture of Hüppe GmbH.
J. INCOME TAXES
Our effective tax rate was 22 percent and 23 percent for the three months ended March 31, 2023 and 2022, respectively. Our tax rate in each period was favorably impacted by $11 million of income tax benefits. For both periods, the income tax benefits resulted from a reduction in the liability for uncertain tax positions resulting from the expiration of statutes of limitation and stock-based compensation.
K. INCOME PER COMMON SHARE
Reconciliations of the numerators and denominators used in the computations of basic and diluted earnings per common share were as follows, in millions:

|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Numerator (basic and diluted): |  |  |  |  |  |  |
Net income |  |  |  |  | $ | 205 |  |  | $ | 233 |
Less: Allocation to redeemable noncontrolling interest |  |  |  |  | — |  |  | (1) |
Less: Allocation to unvested restricted stock awards |  |  |  |  | — |  |  | — |
Net income attributable to common shareholders |  |  |  |  | $ | 205 |  |  | $ | 234 |
Denominator: |  |  |  |  |  |  |
Basic common shares (based upon weighted average) |  |  |  |  | 226 |  |  | 239 |
Add: Stock option dilution |  |  |  |  | 1 |  |  | 2 |
Diluted common shares |  |  |  |  | 227 |  |  | 241 |

For the three months ended March 31, 2023 and 2022, we allocated dividends and undistributed earnings to the unvested restricted stock awards.
10

MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Concluded)
K. INCOME PER COMMON SHARE (Concluded)
The following stock options, restricted stock units and performance restricted stock units were excluded from the computation of weighted-average diluted common shares outstanding due to their anti-dilutive effect, in thousands:

|  |  | Three Months Ended March 31,
|  |  |  |  | 2023 |  | 2022
Number of stock options |  |  |  |  | 789 |  | 265
Number of restricted stock units |  |  |  |  | 272 |  | — |
Number of performance restricted stock units |  |  |  |  | 15 |  | — |

Effective October 20, 2022, our Board of Directors authorized the repurchase, for retirement, of up to $2.0 billion of shares of our common stock in open-market transactions or otherwise, replacing the previous Board of Directors authorization established in 2021. We repurchased and retired approximately 1.1 million shares of our common stock in the three months ended March 31, 2023 for approximately $56 million, of which approximately $53 million was paid in cash. This included 0.1 million shares to offset the dilutive impact of restricted stock units granted in the three months ended March 31, 2023. At March 31, 2023, we had approximately $1.9 billion remaining under the 2022 authorization.
We have declared and paid cash dividends per common share of $0.285 for the three months ended March 31, 2023 and $0.280 for the three months ended March 31, 2022.
L. OTHER COMMITMENTS AND CONTINGENCIES
Litigation. We are involved in claims and litigation, including class actions, mass torts and regulatory proceedings, which arise in the ordinary course of our business. The types of matters may include, among others: advertising, competition, contract, data privacy, employment, environmental, insurance coverage, intellectual property, personal injury, product compliance, product liability, securities and warranty. We believe we have adequate defenses in these matters. We are also subject to product safety regulations, product recalls and direct claims for product liabilities. We believe the likelihood that the outcome of these claims, litigation and product safety matters would have a material adverse effect on us is remote. However, there is no assurance that we will prevail in these matters, and we could, in the future, incur judgments or penalties, enter into settlements of claims or revise our expectations regarding the outcome of these matters, which could materially impact our results of operations.
Warranty. Changes in our warranty liability were as follows, in millions:

| Three Months Ended March 31, 2023 |  | Twelve Months Ended December 31, 2022
Balance at January 1 | $ | 80 |  |  | $ | 80 |
Accruals for warranties issued during the period | 10 |  |  | 40 |
Accruals related to pre-existing warranties | 1 |  |  | (3) |
Settlements made (in cash or kind) during the period | (10) |  |  | (34) |
Other, net (including currency translation) | — |  |  | (3) |
Balance at end of period | $ | 81 |  |  | $ | 80 |

11

MASCO CORPORATION
Item 2. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview
Due to changing market conditions, we are experiencing, and may continue to experience, lower market demand for our products. We have been experiencing, and may continue to experience, elevated commodity and other input costs, as well as employee-related cost inflation. While still elevated, we have recently seen some reduction of certain costs, and we aim to offset the potential unfavorable impact of our costs and lower demand for our products with productivity improvement, pricing, and other initiatives.
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 remain confident in the fundamentals of our business and long-term strategy. 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.
FIRST QUARTER 2023 VERSUS FIRST QUARTER 2022
Consolidated Results of Operations
We report our financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 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 refers to the three months ended March 31, 2023 compared to the same period of 2022.
SALES AND OPERATIONS
Net Sales
Below is a summary of our net sales, in millions, for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | Change
Net sales, as reported |  |  |  |  |  |  | $ | 1,979 |  |  | $ | 2,201 |  |  | $ | (222) |
Currency translation |  |  |  |  |  |  | 30 |  |  | — |  |  | 30 |
Net sales, excluding the effect of currency translation |  |  |  |  |  |  | $ | 2,009 |  |  | $ | 2,201 |  |  | $ | (192) |

Net sales for the three months ended March 31, 2023 were $2.0 billion, which decreased 10 percent compared to the three months ended March 31, 2022. Excluding the effect of currency translation, net sales decreased nine percent.
12

Net sales for the three months ended March 31, 2023 decreased primarily due to:
•Lower sales volume across the entire company which decreased sales by 14 percent.
•Unfavorable foreign currency translation which decreased sales by one percent.
These amounts were partially offset by:
•Higher net selling prices across the entire company which increased sales by six percent.
Gross Profit and Gross Margin
Below is a summary of our gross profit, in millions, and gross margin for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | Favorable / (Unfavorable)
Gross profit |  |  |  |  |  |  | $ | 669 |  | $ | 704 |  | $ | (35)
Gross margin |  |  |  |  |  |  | 33.8 | % |  | 32.0 | % |  | 180 bps

For the three months ended March 31, 2023, gross profit margin was positively impacted by:
•Higher net selling prices.
•Cost savings initiatives.
These amounts were partially offset by:
•Lower sales volume.
•Increased commodity and other input costs.
Selling, General and Administrative Expenses
Below is a summary of our selling, general and administrative expenses, in millions, and selling, general and administrative expenses as a percentage of net sales for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | (Favorable) / Unfavorable
Selling, general and administrative expenses |  |  |  |  |  |  | $ | 354 |  | $ | 351 |  | $ | 3
Selling, general and administrative expenses as percentage of net sales |  |  |  |  |  |  | 17.9 | % |  | 15.9 | % |  | 200 bps

For the three months ended March 31, 2023, selling, general, and administrative expenses as a percentage of net sales was negatively impacted by:
•Lower net sales resulting from lower volumes.
•Increased marketing costs.
13

Operating Profit
Below is a summary of our operating profit, in millions, and operating profit margin for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | Favorable / (Unfavorable)
Operating profit |  |  |  |  |  |  | $ | 315 |  | $ | 353 |  | $ | (38)
Operating profit margin |  |  |  |  |  |  | 15.9 | % |  | 16.0 | % |  | (10) bps

For the three months ended March 31, 2023, operating profit was negatively impacted by:
•Lower sales volume.
•Increased commodity and other input costs.
•Increased marketing costs.
These amounts were partially offset by:
•Higher net selling prices.
•Cost savings initiatives.
OTHER INCOME (EXPENSE), NET
Interest Expense
Below is a summary of our interest expense, in millions, for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | Favorable / (Unfavorable)
Interest expense |  |  |  |  |  |  | $ | (28) |  |  | $ | (25) |  |  | $ | (3) |

Other, net
Below is a summary of our other, net, in millions, for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | Favorable / (Unfavorable)
Other, net |  |  |  |  |  |  | $ | (2) |  |  | $ | (1) |  |  | $ | (1) |

14

INCOME TAXES
Below is a summary of our income tax expense, in millions, and our effective tax rate for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | (Favorable) / Unfavorable
Income tax expense |  |  |  |  |  |  | $ | 64 |  | $ | 75 |  | $ | (11)
Effective tax rate |  |  |  |  |  |  | 22 | % |  | 23 | % |  | (1) | %

Our tax rate in each period was favorably impacted by $11 million of income tax benefits. For both periods, the income tax benefits resulted from a reduction in the liability for uncertain tax positions resulting from the expiration of statutes of limitation and stock-based compensation.
NET INCOME AND INCOME PER COMMON SHARE - ATTRIBUTABLE TO MASCO CORPORATION
Below is a summary of our net income and diluted income per common share, in millions, except per share data, for the three months ended March 31, 2023 and 2022:

|  |  | Three Months Ended March 31,
|  |  |  |  |  |  | 2023 |  | 2022 |  | Favorable / (Unfavorable)
Net income |  |  |  |  |  |  | $ | 205 |  |  | $ | 233 |  |  | $ | (28) |
Diluted income per common share |  |  |  |  |  |  | $ | 0.90 |  |  | $ | 0.97 |  |  | $ | (0.07) |

15

Business Segment and Geographic Area Results
The following tables set forth our net sales and operating profit information by business segment and geographic area, dollars in millions.

|  |  |  |  | Three Months Ended March 31, |  | Percent Change
|  |  |  |  |  |  | 2023 |  | 2022 |  | 2023 vs. 2022
Net Sales: |  |  |  |  |  |  |  |  |  |  |
Plumbing Products |  |  |  |  |  |  | $ | 1,222 |  |  | $ | 1,359 |  |  | (10) | %
Decorative Architectural Products |  |  |  |  |  |  | 757 |  |  | 842 |  |  | (10) | %
Total |  |  |  |  |  |  | $ | 1,979 |  |  | $ | 2,201 |  |  | (10) | %
North America |  |  |  |  |  |  | $ | 1,555 |  |  | $ | 1,734 |  |  | (10) | %
International, principally Europe |  |  |  |  |  |  | 424 |  |  | 467 |  |  | (9) | %
Total |  |  |  |  |  |  | $ | 1,979 |  |  | $ | 2,201 |  |  | (10) | %

|  |  |  |  | Three Months Ended March 31, |  | Percent Change
|  |  |  |  |  |  | 2023 |  | 2022 |  | 2023 vs. 2022
Operating Profit (A): |  |  |  |  |  |  |  |  |  |  |
Plumbing Products |  |  |  |  |  |  | $ | 206 |  |  | $ | 228 |  |  | (10) | %
Decorative Architectural Products |  |  |  |  |  |  | 132 |  |  | 155 |  |  | (15) | %
Total |  |  |  |  |  |  | $ | 338 |  |  | $ | 383 |  |  | (12) | %
North America |  |  |  |  |  |  | $ | 266 |  |  | $ | 300 |  |  | (11) | %
International, principally Europe |  |  |  |  |  |  | 72 |  |  | 83 |  |  | (13) | %
Total |  |  |  |  |  |  | 338 |  |  | 383 |  |  | (12) | %
General corporate expense, net |  |  |  |  |  |  | (23) |  |  | (30) |  |  | (23) | %
Total operating profit |  |  |  |  |  |  | $ | 315 |  |  | $ | 353 |  |  | (11) | %

(A)Before general corporate expense, net; refer to Note H to the condensed consolidated financial statements.
The following discussion of business segment and geographic area results refers to the three months ended March 31, 2023 compared to the same period of 2022. Changes in operating profit in the following business segment and geographic area results discussion exclude general corporate expense, net.
BUSINESS SEGMENT RESULTS DISCUSSION
Plumbing Products
Sales
Net sales in the Plumbing Products segment decreased 10 percent for the three months ended March 31, 2023 due primarily to lower sales volume which decreased sales by 12 percent, unfavorable foreign currency translation which decreased sales by two percent, and unfavorable sales mix which decreased sales by one percent. These amounts were partially offset by higher net selling prices which increased sales by five percent.
Operating Results
Operating profit in the Plumbing Products segment for the three months ended March 31, 2023 was negatively impacted by lower sales volume, increased marketing costs, unfavorable sales mix and unfavorable foreign currency translation. These amounts were partially offset by higher net selling prices and, to a lesser extent, cost savings initiatives.
16

Decorative Architectural Products
Sales
Net sales in the Decorative Architectural Products segment decreased 10 percent for the three months ended March 31, 2023 due primarily to lower sales volume across the segment, partially offset by higher net selling prices across the segment.
Operating Results
Operating profit in the Decorative Architectural Products segment for the three months ended March 31, 2023 was negatively impacted by lower sales volume and higher commodity and other input costs and marketing costs. These amounts were partially offset by higher net selling prices.
GEOGRAPHIC AREA RESULTS DISCUSSION
North America
Sales
North America net sales decreased 10 percent for the three months ended March 31, 2023. Lower sales volume across all product categories decreased sales by 15 percent, partially offset by higher net selling prices across all product categories which increased sales by five percent.
Operating Results
North America operating profit for the three months ended March 31, 2023 was negatively impacted by lower sales volume and higher commodity and other input costs and marketing costs. These amounts were partially offset by higher net selling prices and, to a lesser extent, cost savings initiatives.
International, Principally Europe
Sales
International net sales decreased nine percent for the three months ended March 31, 2023. In local currencies (including sales in currencies outside their respective functional currencies), net sales decreased three percent. Lower sales volume decreased sales by nine percent and unfavorable sales mix decreased sales by one percent. These amounts were partially offset by higher net selling prices which increased sales by six percent.
Operating Results
International operating profit for the three months ended March 31, 2023 was negatively impacted by lower sales volume, unfavorable sales mix and increased marketing costs. These amounts were partially offset by higher net selling prices.
Liquidity and Capital Resources
Overview of Capital Structure
We had cash and cash investments of approximately $510 million and $452 million at March 31, 2023 and December 31, 2022, 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. While we attempt to diversify these investments in a prudent manner to minimize risk, it is possible that future changes in the financial markets could affect the security or availability of these investments. Of the cash and cash investments we held at March 31, 2023 and December 31, 2022, $304 million and $321 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.
Our current ratio was 1.6 to 1 at both March 31, 2023 and December 31, 2022.
17

We believe that our present cash balance and cash flows from operations, and borrowing availability under our 2022 Credit Agreement, are sufficient to fund our near-term working capital and other investment needs. We believe 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 changing market conditions and its impact on our customers and suppliers, we are unable to fully estimate the extent of the impact it may have on our future financial condition.
Credit Agreement
On April 26, 2022, we entered into a revolving credit agreement (the “2022 Credit Agreement”) with an aggregate commitment of $1.0 billion and a maturity date of April 26, 2027.
Under the 2022 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. See Note G to the condensed consolidated financial statements for additional information.
The 2022 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) an interest coverage ratio, as adjusted for certain items, not less than 2.5 to 1.0. We were in compliance with all covenants and $210 million was borrowed and outstanding at an interest rate of 5.974% at March 31, 2023.
364-day Term Loan
On April 26, 2022, we entered into a 364-day $500 million senior unsecured delayed draw term loan due April 26, 2023 with a syndicate of lenders. The senior unsecured term loan and commitments thereunder are subject to prepayment or termination at our option and the loans will bear interest at SOFR plus a spread adjustment and 0.70%. The covenants, including the financial covenants, are substantially the same as those in the 2022 Credit Agreement. We repaid $300 million during 2022.
Subsequent to March 31, 2023, we increased our borrowing under the 2022 Credit Agreement to $266 million at a weighted average interest rate of 6.190%, and repaid the remaining $200 million outstanding under the term loan.
Other Liquidity and Capital Resource Activities
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. The amounts confirmed as valid under the program and included in accounts payable were $52 million and $50 million at March 31, 2023 and December 31, 2022, respectively. Of the amounts confirmed as valid under the program, the amounts owed to participating financial institutions were $26 million and $29 million at March 31, 2023 and December 31, 2022, respectively. All payments made under the program are recorded as a decrease in accounts payable and accrued liabilities, net, in our condensed consolidated statements of cash flows. 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.
Cash Flows
For the three months ended March 31, 2023, net cash provided by operations was $33 million, primarily driven by operating profit, partially offset by changes in working capital, due mostly to higher receivables and lower accounts payable and accrued liabilities balances.
For the three months ended March 31, 2023, net cash provided by financing activities was $78 million, primarily due to $210 million in net proceeds from revolving credit loan borrowings. These cash proceeds were partially offset by $65 million for the payment of cash dividends, $53 million for the repurchase and retirement of our common stock (including 0.1 million shares repurchased to offset the dilutive impact of restricted stock units granted in 2023), and $20 million for employee withholding taxes paid on stock-based compensation.
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For the three months ended March 31, 2023, net cash used for investing activities was $59 million, primarily driven by $61 million of capital expenditures.
Cautionary Statement Concerning 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 to a lesser extent, new home construction, our ability to maintain our strong brands and to develop innovative products, our ability to maintain our public reputation, our ability to maintain our competitive position in our industries, our reliance on key customers, the cost and availability of materials, our dependence on suppliers and service providers, extreme weather events and changes in climate, 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 acquired and may in the future acquire, our ability to attract, develop and retain a talented and diverse workforce, risks associated with cybersecurity vulnerabilities, threats and attacks, risks associated with our reliance on information systems and technology and the impact of the ongoing COVID-19 pandemic on our business and operations.
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. Any forward-looking statement made by us speaks only as of the date on which it was made. 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 March 31, 2023, 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 March 31, 2023, 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
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings involving us is set forth in Note L to our condensed consolidated financial statements included in Part I, Item 1 of this Report and is incorporated herein by reference.
Item 1A. Risk Factors
There have been no material changes to the risk factors of the Company set forth in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information regarding the repurchase of our common stock for the three months ended March 31, 2023 under the 2022 share repurchase authorization:

Period |  | Total Number Of Shares Purchased |  | Average Price Paid Per Common Share |  | Total Number Of Shares Purchased As Part Of Publicly Announced Plans or Programs |  | Maximum Value Of Shares That May Yet Be Purchased Under The Plans Or Programs
1/1/23 - 1/31/23 |  | 268,947 |  |  | $ | 49.71 |  |  | 268,947 |  |  | $ | 1,986,629,339 |
2/1/23 - 2/28/23 |  | 160,658 |  |  | $ | 53.41 |  |  | 160,658 |  |  | $ | 1,978,048,307 |
3/1/23 - 3/31/23 |  | 669,352 |  |  | $ | 50.09 |  |  | 669,352 |  |  | $ | 1,944,521,964 |
Total for the quarter |  | 1,098,957 |  |  | $ | 50.48 |  |  | 1,098,957 |  |  | $ | 1,944,521,964 |

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MASCO CORPORATION
PART II. OTHER INFORMATION, Continued
Item 6. Exhibits

31.a |  | Certification by Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
31.b |  | Certification by Chief Financial Officer required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
32 |  | Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.
101 |  | The following financial information from Masco Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders' Equity, and (vi) Notes to Condensed Consolidated Financial Statements.
104 |  | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

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MASCO CORPORATION
PART II. OTHER INFORMATION, Concluded
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: | /s/ John G. Sznewajs
|  | John G. Sznewajs Vice President, Chief Financial Officer

April 26, 2023
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