MASCO CORP /DE/ - Annual Report 2018

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM ll - K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK

PURCHASE, SAVINGS AND SIMILAR PLANS

PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

( Mark O ne ) :
x	ANNU A L RE PORT PURSUA NT T O SE C T I ON 1 5 ( d ) O F T H E S E CURITI E S E X CH ANG E ACT OF 1 93 4
F o r the fis c al year ended December 31 , 2017
OR
¨	TRANSITION REP O RT PUR S UANT TO SE C TION 15 ( d ) OF THE S ECU RIT I E S EX CHA NGE A C T O F 1934
For the t ransit i on p e riod from ___ to _____
C ommission file number 1-5794
A.	Full title of th e p l an and the addres s o f the plan, if di ff er e nt fr o m that of the issuer named below :
M asco Cor p o ration H o urly 4 0 1 ( k ) Plan
B.	Name of issuer o f th e se cu rities held pu r suan t t o t he pla n an d the address o f its prin ci pal ex e cutive office :
Masco Corporation
17450 College Parkway
Livonia, Michigan 48152

MASCO CORPORATION HOURLY 401(k) PLAN

TABLE OF CONTENTS

	Page No.
Report of Independent Registered Public Accounting Firm	3
Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2017 and 2016	4
Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2017	5
Notes to Financial Statements	6
Supplemental Schedule:
Schedule H, line 4i - Schedule of Assets (Held at End of Year)	11
Note: Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Plan Administrator and Plan Participants

Masco Corporation Hourly 401(k) Plan

Opinion on the financial statements

We have audited the accompanying statements of net assets available for benefits of Masco Corporation Hourly 401(k) Plan (the “Plan”) as of December 31, 2017 and 2016, the related statement of changes in net assets available for benefits for the year ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2017 and 2016, and the changes in net assets available for benefits for the year ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Supplemental information

The supplemental information in the accompanying schedule, Schedule H, Line 4i-Schedule of Assets (Held at End of Year) as of December 31, 2017 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements but include supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the basic financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedule, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information referred to above is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

/s/ Grant Thornton LLP

We have served as the Plan’s auditor since 2013.

Southfield, Michigan

June 8, 2018

MASCO CORPORATION HOURLY 401(k) PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2017 and 2016

	2017	2016
ASSETS
Investments, at fair value:
Collective trust funds	$ 146,600,878	$ 118,424,816
Mutual funds	120,025,236	105,262,920
Stock fund	2,660,440	1,887,286
Brokerage account	758,079	622,618
Total investments	270,044,633	226,197,640
Receivables:
Notes receivable from participants	20,966,793	18,255,036
Participant contributions	246,041	222
Employer contributions	4,795,460	4,713,529
Total receivables	26,008,294	22,968,787
Net assets available for benefits	$ 296,052,927	$ 249,166,427

The acco mpanying notes a re an integr al part o f t he financial stat e m e n ts .

MASCO CORPORATION HOURLY 401(k) PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

For the year ended December 31, 2017

ADDITIONS
Investment income:
Net appreciation in fair value of investments	$ 33,600,079
Interest and dividend income	6,644,838
Total investment income	40,244,917
Contributions:
Participant contributions	11,682,390
Participant rollover contributions	621,023
Employer contributions	11,901,029
Total contributions	24,204,442
Interest income on notes receivable from participants	636,119
Total additions	65,085,478
DEDUCTIONS
Benefit payments	(16,497,254	)
Other, net	(190,077	)
Total deductions	(16,687,331	)
Net increase in net assets available for benefits	48,398,147
Net transfers out of the Plan	(1,511,647	)
Net assets available for benefits:
Beginning of year	249,166,427
End of year	$ 296,052,927

The accompa nying note s are an i ntegral pa r t o f t h e fin a n ci a l statements.

MASCO CORPORATION HOURLY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

A. DESCRIPTION OF PLAN

The fol l o w i ng description of the M asco C o rporat i on ( " Company " ) Hourly 40 1 (k) Plan ( " Plan " ) pr ovides o nly general inf o r mat i o n . Part i c i pants sh o uld refer to the Plan document f or a m o re c o mplete descri pti o n of the Pl a n ' s pro v i sions .

G e n e ral . Th e P l a n is a defi ne d con t ri bution plan cov eri n g h o ur l y emp l o y ee s at c e rtain div isi on s and subsidiaries o f the Compan y . El i g i ble employees m ay pa r t i c i pate in t h e Pl an on the i r da t e o f h ire . The P la n i s subj e ct t o t h e pro v isi ons of th e Emp lo ye e Re ti re men t I n co me S e curit y Ac t o f 1974 , as amend e d ( " ERI S A " ) .
Contri butions . Particip ant s m ay co ntribut e (on either a pre-tax or Roth after-tax basis) u p to 75 percent o f th e ir p retax annual co mpensation , as defi ne d i n th e Pl an. A l l employees who a re e ligibl e to pa rticipa t e und e r th i s Pl a n a nd who ha v e a ttai ned the age of 50 bef o r e the clo se of the pla n y ear s hall be eligib l e to make c a tch - u p con trib utions . Pa r t i c ip ants m ay also mak e roll ov er cont ri bu t i ons representing dist r ibutions from i ndivid u al retirement accounts , simplified employee pension plan s , 4 03(b) a n d 457 p l ans o r o t her e m plo y e r s ' tax qual ifie d pl a ns. The Compan y m ak es m atchi ng and/ or pr o f i t shar i ng employer cont ri buti o ns in ac c o rdanc e with t h e p r ov ision s of the P lan . These employer co ntr i buti ons , i f applicabl e , v ar y by div ision or subs i d i a ry and are i nvested purs ua n t t o the partic i pant ' s in v es t men t elect i on . At December 31, 2017 and 2016 , employer profit sharing contributions receivable totaled $4,577,989 and $4,676,869 , respectively. Cont r ibu tio ns a re s ubject to ce rtai n Interna l Re v e nu e Serv i ce ( " IRS " ) l i mit ati ons . P arti c ipant s ma y direc t co ntrib ut i ons i n one pe r c ent in c r e m ents in a ny of the variou s inves tment option s. T hese options i nc l ud e pro f ess i ona ll y m a naged mu t ual fu nds , collective trust funds, sto c k f u nds a nd a b r o ker age account which all ows partici p a nts to buy , s e l l or trade m os t pu b l i c l y l is t ed comm on s tocks , co rporate and government bond s o r c e r t i ficates o f depos i t ; these o pti ons vary in t h eir resp ec t i ve strat egi e s , risks a n d g o a ls . Part i cipants m ay ch a nge thei r inv est m e nt o pt i o n s d aily .
P a r ticipa nt A ccoun ts . Each a ct i ve particip a nt ' s a cco u nt is cr ed ited with the pa rt ic i pan t ' s cont ri buti on s a n d a l loc a tions o f ( a ) employer cont ri butions ( i f app li cab l e ) , and ( b ) investm e n t earnings , as defined in the Pl an . P lan adm i n istra ti v e ex p enses ar e paid b y the Company and n ot charg e d to participa nts ' account s . Ce rt ai n expense s m a y be incurred by i n d ivid ua l part ic ipant s fo r special ser v i ces re l a tin g t o the i r accounts . Thes e costs are charg e d di r e c tly to the i n di vidual part i c i pa n t ' s account . T he ben efit to wh i c h a pa r t i ci pant i s entitl ed is the be n ef it th a t can be prov i d ed fr om the p articipa nt ' s v es te d account .
V es ting a n d F orf eited Employer Con tribution s . Par t icipants are i mme di ate l y vest e d in th ei r cont r ibutions pl u s ac tual earning s ther eo n . Partici pa nts ar e also i mme d i ately v e sted in the C om pa n y match i ng cont r ibuti on plus earnin gs thereon . V esting in Company p r o fit s haring c o ntr i bu t i ons oc cu rs a fter th r ee yea rs of s ervice comm enci ng at d a t e of h i re . A t December 31, 2017 and 2016 , f orfe ited non vested e mployer contribu t ions tot a l e d $277,309 and $215,730 , r espec t ively . All forfeit e d amoun ts are us e d in each s uccee din g y ea r t o red uce employer co nt rib ution s .
Voting R ights . Each parti cipant w h o has an i nterest i n the Masco Corporation Company S toc k Fund is enti tle d to ex ercise vot i ng r ights attributa b l e to the sh ares alloc ated to his or he r Company Stoc k Fund account and i s n ot i fied b y t he Tru s te e, Fidelit y Manag e ment Tru st C o m pany ( "F idel i ty " ), as defi ne d by t he Plan, p r i o r to th e tim e that such rights are to be exe r c ise d . If t he Tru s te e d oe s n o t re c ei v e timely i nstruct i on s , the Trustee its e l f o r by proxy sha ll vot e all s uch shares in t he s a me rat i o as the share s with respe ct to wh i ch inst r u ctions were r ec ei v ed fr o m pa r ti ci p a nts .
Notes Re ce i v a ble from P arti c i pants . Gen erally, par tic i pant s may borrow fr o m their accoun t a m in i m u m of $ 1 , 0 0 0 up t o a m axim u m eq u al t o the lesser of $50,000 or 5 0 perc ent o f their ves t e d ac co unt bala nce at th e t ime of the loan . Loan terms g en e rally range fr om 1- 5 ye ars, or up to 15 yea rs in lim ite d circumstance s . The loans a re co ll ate rali z ed b y the b al ance in t h e participant ' s account a n d ge n era lly bear inte rest at a r a t e equa l to the Prime R a t e on t he la s t bus i n ess da y of t he month pri or to the da te o f the l oa n a pplicati on . Princip al a n d interest ar e pai d ratably t h rou g h pa y r o ll dedu c ti on s .

MASCO CORPORATION HOURLY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS, Continued

A. DESCRIPTION OF PLAN (Concluded)

Pay m e nt of Be nefit s. G e ne r ally , afte r separa tion from service due to terminati o n, de a t h , disabilit y o r r et ir e m ent , a p a r t i cip a nt may elect t o receive an a mo un t e qual to the va l u e of th e partici pant ' s ve sted interest in his or her a c c o u nt i n either a single l ump-sum amoun t o r in an nual installment s over a peri o d n o t to exceed fi v e ye ar s. In - ser v i c e an d h a rdship withdrawa ls are distrib uted in a s i ngle p ayment .

B. S UMMARY OF SIGNIFICANT ACCOUNTING POLICIES

T he following i s a summ ar y of sig n i fic a nt acco u nt ing po li c i e s in a cco rdan ce w it h acco unting pri nciples gen erally ac cepted in the Un ited State s o f Am e rica ( " GAAP " ) f ollow ed in the p re parat i o n of t he s e f i nancial state m e nts .

Basis o f Ac co un t in g. The accompa ny in g f i n a n c ial st a t e m ent s are prepared on t he ac crual basis o f ac counting.

Use of Est imates. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of additions and deductions during the reporting period. Actual results could differ from these estimates and assumptions.

Risks a n d Uncertainties. The Pla n provides for v ar i ous in v estment options in collective trust funds, mut ua l fund s, stock funds an d oth er i nvestm ent secu r i tie s . Inv es tment sec uri ties a r e exposed to var ious r i sk s , i ncludin g interest rate , ma r ket a n d credit risks . Due t o the lev e l of ris k ass o ciat e d with ce r tain collective trust funds, m utu a l fun d s, stock funds and in v estment securities and th e l e v el o f un c e r ta i nty related t o c hanges i n the val u e o f in v es t ment securiti e s , it is reasonab l y poss i b l e t hat changes in risks in the n e ar term could mater ia lly affec t p artic ipan ts ' account ba l ance s a n d t h e am ounts re p orted in t he statem ents o f n et a ssets avai lable f o r benefits a nd the st at ement o f changes in net asse ts a vai l a b l e for ben efi ts .

I n v estment V a l uat i on and Income R e co gnition. I nvest ments are s ta ted at fa i r va l ue as dete r min e d by Fide lit y Pric ing a nd Ca sh M anagem ent Servic es , Inc . See Note D for a summary of the valuation method by type of fund.

I n v es tm e nt transact i ons are r e fle c te d on a t ra d e - d a te ba si s . Interest inc o me i s recogni ze d on the accrua l ba si s of accounting . Div i dend income is reco rde d on th e e x - div id e nd da t e . Income f rom othe r sec uri t i e s i s r eco rde d as e arned on a n accrual bas is .

The Plan p r esents in the stat e ment of ch a nges i n n e t assets available for benef i ts t he ne t a pprec i at i o n ( depreciati o n ) in the fair v a lue o f it s in v estm e nts , which consist s of the rea li zed ga in s or losses and the un rea lized a ppr eciatio n (d epre ci a ti on) of th ose inve s tments .

Notes R ece ivable f r om Participan t s. Notes r ecei v ab l e f r om pa r tic i pants are measu r ed at their unp a id princi pa l balanc e p l us any a ccrued bu t u npaid in tere s t . I nterest income is r ec orded on the a c cru al b as i s . De linquen t notes rec e ivab l e fr o m part i c ip ants ar e r ecorde d a s b ene fi t paymen ts b ased upon the term s of the P la n.

Payment of Benefit s. B enef i t s ar e r eco r d e d when p a i d.

Recently Issued Account i n g Prono unc e me n ts. I n February 2017 , th e Financial Accounting Standards Board i ss ue d Accounting Standards Update 2017-06 ("ASU 2017-06") , "Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting", which changes the presentation and disclosures for plans that participate in a master trust. ASU 2017-06 is effective for annual periods beginning after December 15, 2018 and requires retrospective application. We do not expect the adoption of this new standard to impact the Plan's financial statements.

MASCO CORPORATION HOURLY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS, Continued

C. INVESTMENTS

At December 31, 2017 and 2016 , the stock fund totaled $2,660,440 and $1,887,286 , respectively, and was comprised o f the Masco Corporat io n Company Stock Fund , which exclusively included Masco Corporation Common Stock.

D. FAIR VALUE MEASUREMENTS

Accounting Poli cy . T he Plan foll ows f a i r v alue g uidan ce ( A SC 820) that defin es fa ir value , es tab l ishes a fra mewor k for measuring f a ir val u e and requires certain d i sclosures about f air v alue meas urem en ts . T h e g uida nce d efin e s fair val ue as "t h e price tha t wou l d be received to se ll an a sset or p aid to tr ansf e r a li ab i l ity in an orderl y t r an s act i on bet w ee n mark e t part icipa n ts at the m e as u r e ment dat e ." Fur t her , i t de f ine s a fai r v al u e h i era r ch y , a s follo w s : L e v e l 1 inpu ts as qu ote d p ri c es in a c ti ve ma rket s fo r ide nt i cal asset s or liab iliti e s ; Leve l 2 inp u t s as ob ser v a b le inpu t s ot h e r than Le vel 1 p rices , such as quot e d ma rket prices fo r s imi l ar assets o r liab i lities o r oth e r i n p u ts that ar e observ able or can be c o rroborated b y ma rk et data; and Le ve l 3 i n p ut s as unobser v abl e inputs that are supported by little or no market act ivi t y a nd t hat are fi na n c i a l instruments whose value is determin e d u s ing pricing m o d e ls or ins t rumen t s for which the determination of fa ir v al u e r e quires si gni f icant m a n a g e me nt judgment o r e stimation .

A desc ri ption of the valua ti on metho dol o gi e s u sed fo r assets m e asur ed at f air value is as follows:

Collective trust funds: Valued based on Net Asset Value ("NAV"), which approximates fair value as of December 31, 2017 and 2016 . Such basis is determined by reference to the respective fund’s underlying assets, which are primarily marketable equity and fixed income securities.

Mutual funds: Valu e d at the daily c losing price as rep o rt e d by the fund . Mutual funds held by th e Plan are open - end mutual fun d s that are r e gistered with the S ecurities and E xc ha nge Commissi o n ("SEC"). T hese funds are r equi r ed to publish t he ir d a ily NAV and t r a n s ac t at tha t pric e . Th e m u tual funds h eld b y the Plan ar e de e med to be acti v e ly tr aded .

Stock fund : V al ue d at t he c l o s ing p r ice as re p o rted on the a ctive market on whi c h th e individual s ec u ri ties are t ra d e d .

B r ok erage acc ount : Part icipant-dir ected inve stments that primarily inclu de c o mm on st ocks , mutual funds, and cash . Common stocks are valued at t he c l o s ing p r ice as re p o rted on the a ctive market on whi c h th e individual s ec u ri ties are t ra d e d . Mutual funds are valued at the daily c losing price as rep o rt e d by the fund . Mutual funds held by th e Plan are open - end mutual fun d s that are r e gistered with the SEC. T hese funds are r equi r ed to publish t he ir d a ily NAV and t r a n s ac t at tha t pric e . Th e m u tual funds h eld b y the Plan ar e de e med to be acti v e ly tr aded .

T h e methods desc r ib e d ab o v e m a y pr oduc e a f air value ca lcu lat io n that may not be i ndicative of n et r ealizable va lu e or re flective of f ut ure fair values . Furthermore , while t h e Pla n belie v e s i ts va l uation meth o d s are appropriate and consistent with oth er market partici p ants , the use of dif f er e nt methodologies or assumptions to d e term in e the fair v alue of certain fina nc i a l i nstruments cou l d result in a dif fe re nt fair value me a su r e m e nt at the rep o r t in g da t e.

T h e f ollowing tables set fort h by l ev e l , w it hi n t h e fair value hierarchy , th e P l a n 's assets at fair value as o f December 31, 2017 and 2016 .

	Assets at Fair Value as of December 31, 2017 — Level 1	Level 2	Level 3	Measured at NAV	Total
Collective trust funds	$ —	$ —	$ —	$ 146,600,878	$ 146,600,878
Mutual funds	120,025,236	—	—	—	120,025,236
Stock fund	2,660,440	—	—	—	2,660,440
Br ok e r a ge account	758,079	—	—	—	758,079
Total assets at fair value	$ 123,443,755	$ —	$ —	$ 146,600,878	$ 270,044,633

MASCO CORPORATION HOURLY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS, Continued

D. FAIR VALUE MEASUREMENTS (Concluded)

	Assets at Fair Value as of December 31, 2016 — Level 1	Level 2	Level 3	Measured at NAV	Total
Collective trust funds	$ —	$ —	$ —	$ 118,424,816	$ 118,424,816
Mutual funds	105,262,920	—	—	—	105,262,920
Stock fund	1,887,286	—	—	—	1,887,286
Br ok e r a ge account	622,618	—	—	—	622,618
Total assets at fair value	$ 107,772,824	$ —	$ —	$ 118,424,816	$ 226,197,640

The following table summarizes investments measured at fair value using the NAV per share practical expedient as of December 31, 2017 and 2016 . Were the Plan to initiate a full redemption of the collective trust funds, the investment adviser reserves the right to temporarily delay withdrawal from the trust in order to ensure the securities liquidations will be carried out in an orderly business manner.

	Fair Value at December 31, — 2017	2016	Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Collective trust funds:
FIAM Small Capitalization Core Commingled Pool Class D	$ 3,041,483	$ 2,749,220	None	Daily	30 days
Fidelity® Diversified International Commingled Pool	6,286,858	5,330,677	None	Daily	90 days
Fidelity® Low-Priced Stock Commingled Pool	6,965,968	4,446,808	None	Daily	90 days
FIAM Target Date 2005 Commingled Pool Class X	145,512	125,634	None	Daily	30 days
FIAM Target Date 2010 Commingled Pool Class X	1,124,099	1,069,024	None	Daily	30 days
FIAM Target Date 2015 Commingled Pool Class X	3,636,255	3,731,197	None	Daily	30 days
FIAM Target Date 2020 Commingled Pool Class X	14,005,301	12,156,528	None	Daily	30 days
FIAM Target Date 2025 Commingled Pool Class X	18,315,767	14,804,233	None	Daily	30 days
FIAM Target Date 2030 Commingled Pool Class X	22,358,525	17,740,674	None	Daily	30 days
FIAM Target Date 2035 Commingled Pool Class X	18,588,051	14,408,873	None	Daily	30 days
FIAM Target Date 2040 Commingled Pool Class X	14,312,787	11,580,473	None	Daily	30 days
FIAM Target Date 2045 Commingled Pool Class X	11,887,271	9,071,750	None	Daily	30 days
FIAM Target Date 2050 Commingled Pool Class X	7,406,075	5,838,308	None	Daily	30 days
FIAM Target Date 2055 Commingled Pool Class X	4,646,897	3,184,910	None	Daily	30 days
FIAM Target Date 2060 Commingled Pool Class X	2,181,773	1,132,708	None	Daily	30 days
FIAM Target Date Income Commingled Pool Class X	452,004	501,484	None	Daily	30 days
FIAM Core Plus Commingled Pool Class K	11,246,252	10,552,315	None	Daily	30 days
Total investments measured at NAV	$ 146,600,878	$ 118,424,816

E. INCOME TAX STATUS

The IRS determined and informed the Company by letter dated March 31, 2014 that the Plan is designed in accordance with the applicable sections of the Internal Revenue Code ("Code"). The Plan has since been amended; however, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan's financial statements.

Acco un ti ng p r inciples generall y ac c ep t ed i n the United States of Ame ri c a require Pla n m a n age ment to evaluate tax pos i t i o ns taken b y the Plan and recogn ize a tax liabili ty if the Plan has take n an uncer t ai n position that more l i k e ly t h an not would not b e s ustained upon exa m inat i o n b y the IRS. The Plan admini s t rator has anal y zed th e tax positions take n b y t he Pla n , and has conclud e d t h at as of December 31, 2017 and 2016 , there are n o un c e rt ai n positions taken or exp e ct e d to be taken that would r e qu i re recognition of a li ab ili t y or disclosure i n th e financial state m e n ts. The Plan is subject to r o u tine audits by taxing ju risdictions; ho w e v er, th e re a re currently no audi t s f o r an y tax period in prog ress.

MASCO CORPORATION HOURLY 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS, Concluded

F. PLAN TERMINATION

Altho ugh the Company has not e xpressed an i n t e nt to do so , the Com pany h a s the right at an y time to discontinue its contribu ti on s a n d to terminat e t h e Plan , subjec t to the provisions of ERISA . At the date o f a n y such termin a t i on , all partic ipan t s would become fully vested in their accounts and the Adm ini st r ative Committ ee of the Pl a n shall direct the T r u s t ee to dist rib ut e to the participant s all assets of th e Plan , net of any t er minatio n expen s e s w hi ch wi ll be prorat e d among the partici pa nts ' accou n ts .

G. RELATED PARTY TRANSACTIONS

Cert ain Plan invest m ents a r e in shar es of collective trust funds and m utual funds managed by Fidel ity . Fid e l ity is also the T rustee as defin ed by t he P l an and , th eref ore , these purch ases and sales qual ify as pa rty-in-interest transactions . The r e were no fees paid by the Pla n for in v est m e nt management ser v i ces for the year ended December 31, 2017 . Notes receiv a b le f r om participant s ar e also considered party -i n - interest t ran s actions.

The Pla n inv e sts in a Masco Co r poration Common Stock Fund . As of December 31, 2017 a n d 2016 , t h e v a lue of the Masco Corporation Comm o n Stock Fund was $2,660,440 and $1,887,286 , respect i vely . For the year ended December 31, 2017 , the Masco Corporation Common Stock Fund appreciated in value by $734,856 and earned interest and dividend income of $24,133 .

H . RECONCILIATION OF PLAN'S FINANCIAL STATEMENTS TO FORM 5500

Participant loans are shown net of deemed distributions on the Form 5500.

The following is a reconciliation of net assets per the financial statements to the Form 5500:

	As of December 31, — 2017	2016
Net assets available for benefits per the financial statements	$ 296,052,927	$ 249,166,427
Less: Deemed distributions	179,568	110,361
Net assets per the Form 5500	$ 295,873,359	$ 249,056,066

The following is a reconciliation of the net increase in net assets available for benefits per the financial statements to net income per the Form 5500 for the year ended December 31:

	2017
Net increase in net assets available for benefits per the financial statements	$ 48,398,147
Less: Change in deemed distributions	69,207
Net income per the Form 5500	$ 48,328,940

MASCO CORPORATION HOURLY 401(k) PLAN

SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)

December 31, 2017

(a)	(b) Identity of Issue, Borrower or Similar Party	(c) Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value and Number of Shares Outstanding	(e) Current Value
	Artisan Mid Cap Fund	Mutual fund
	- Institutional Class	101,949 shares	$ 4,229,871
	JP Morgan Mid Cap Value Fund	Mutual fund
	- Institutional Class	192,381 shares	7,749,112
	Vanguard Wellington Fund ™	Mutual fund
	- Admiral™ Shares	333,525 shares	24,207,275
	Dodge & Cox Stock Fund	Mutual fund
		30,574 shares	6,225,127
	Harbor Capital Appreciation Fund	Mutual fund
	- Institutional Class	280,395 shares	19,470,642
**	Fidelity® Extended Market Index Fund	Mutual fund
	- Premium Class	9,677 shares	600,449
**	Fidelity® Institutional Money Market	Mutual fund
	Government Portfolio - Institutional Class	24,331,724 shares	24,331,724
**	Fidelity® Independence Fund - Class K	Mutual fund
		282,656 shares	10,543,080
**	Fidelity® 500 Index Fund	Mutual fund
	- Institutional Class	158,259 shares	14,789,286
**	Fidelity® 500 Index Institutional Fund	Mutual fund
	- Premium Class	1 share	45
**	Fidelity® Emerging Markets Fund - Class K	Mutual fund
		93,293 shares	3,056,281
**	Fidelity® International Index Fund	Mutual fund
	- Institutional Class	50,505 shares	2,180,844
**	Fidelity® U.S. Bond Index Fund	Mutual fund
	- Institutional Class	227,860 shares	2,640,891
	PIMCO Total Return Fund	Mutual Fund
	- Institutional Class	59 shares	609
**	Fidelity® Diversified International	Collective trust fund
	Commingled Pool	482,121 shares	6,286,858
**	Fidelity® Low-Priced Stock	Collective trust fund
	Commingled Pool	486,111 shares	6,965,968
**	FIAM Small Capitalization Core	Collective trust fund
	Commingled Pool Class D	25,529 shares	3,041,481
**	FIAM Target Date Income	Collective trust fund
	Commingled Pool Class X	32,778 shares	452,004
**	FIAM Core Plus	Collective trust fund
	Commingled Pool Class K	566,562 shares	11,246,252

MASCO CORPORATION HOURLY 401(k) PLAN

SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR), Concluded

December 31, 2017

(a)	(b) Identity of Issue, Borrower or Similar Party	(c) Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value and Number of Shares Outstanding	(e) Current Value
**	FIAM Target Date 2005	Collective trust fund
	Commingled Pool Class X	9,805 shares	145,512
**	FIAM Target Date 2010	Collective trust fund
	Commingled Pool Class X	69,777 shares	1,124,099
**	FIAM Target Date 2015	Collective trust fund
	Commingled Pool Class X	221,723 shares	3,636,255
**	FIAM Target Date 2020	Collective trust fund
	Commingled Pool Class X	866,128 shares	14,005,302
**	FIAM Target Date 2025	Collective trust fund
	Commingled Pool Class X	1,085,057 shares	18,315,767
**	FIAM Target Date 2030	Collective trust fund
	Commingled Pool Class X	1,330,865 shares	22,358,525
**	FIAM Target Date 2035	Collective trust fund
	Commingled Pool Class X	1,063,390 shares	18,588,051
**	FIAM Target Date 2040	Collective trust fund
	Commingled Pool Class X	828,766 shares	14,312,787
**	FIAM Target Date 2045	Collective trust fund
	Commingled Pool Class X	684,751 shares	11,887,271
**	FIAM Target Date 2050	Collective trust fund
	Commingled Pool Class X	432,851 shares	7,406,075
**	FIAM Target Date 2055	Collective trust fund
	Commingled Pool Class X	253,237 shares	4,646,898
**	FIAM Target Date 2060	Collective trust fund
	Commingled Pool Class X	177,380 shares	2,181,773
**	Masco Corporation Company Stock Fund	Stock fund
		60,547 shares	2,660,440
	Fidelity BrokerageLink®	Brokerage account
		758,079 shares	758,079
**	Notes Receivable from Participants	Ranging 1-15 years maturity with
		Rates of Interest, 3.25% - 8.25%	20,966,793
			$ 291,011,426

His t orical cost informa tio n is no t req u ir ed on t he Sch edule o f As se ts ( He l d a t En d o f Year ) for par t ic ipant-directed in v es tme nts .

** Th ese inv estments are with a party - i n -interes t.

MASCO CORPORATION HOURLY 401(k) PLAN

SIGNATURE

The Plan . Pursuant to t h e re qu ire m ents o f t h e Sec u rities Exchange Act o f 1 934, the tr u s t ees (or other persons who adm i n i s t er the employee benefit plan) h a v e duly caused t h is a nnual report to be sig n ed o n i t s behalf by the undersigned h ere u nto duly authorize d .

Masco Corporation Hourly 401(k) Plan
By:	Masco Corporation, Plan Administrator of the Masco Corporation Hourly 401(k) Plan

Date:
John G. Sznewajs
Vice President, Chief Financial Officer
Authorized Signatory

MASCO CORPORATION HOURLY 401(k) PLAN

EXHIBIT INDEX

Exhibit Number	Description
23	Consent of Grant Thornton LLP relating to the Plan's financial statements

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