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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950124-03-001531.txt : 20030506
<SEC-HEADER>0000950124-03-001531.hdr.sgml : 20030506
<ACCEPTANCE-DATETIME>20030506081057
ACCESSION NUMBER:		0000950124-03-001531
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20030506
ITEM INFORMATION:		Financial statements and exhibits
ITEM INFORMATION:		Regulation FD Disclosure
FILED AS OF DATE:		20030506

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MASCO CORP /DE/
		CENTRAL INDEX KEY:			0000062996
		STANDARD INDUSTRIAL CLASSIFICATION:	MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS [2430]
		IRS NUMBER:				381794485
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05794
		FILM NUMBER:		03683045

	BUSINESS ADDRESS:	
		STREET 1:		21001 VAN BORN RD
		CITY:			TAYLOR
		STATE:			MI
		ZIP:			48180
		BUSINESS PHONE:		3132747400

	MAIL ADDRESS:	
		STREET 1:		21001 VAN BORN ROAD
		CITY:			TAYLOR
		STATE:			MI
		ZIP:			48180

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MASCO SCREW PRODUCTS CO
		DATE OF NAME CHANGE:	19731025
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>k76743e8vk.txt
<DESCRIPTION>CURRENT REPORT
<TEXT>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  ------------

                                    FORM 8-K
                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          Date of report (Date of earliest event reported) MAY 6, 2003

                        --------------------------------

                                MASCO CORPORATION
               (Exact name of Registrant as Specified in Charter)




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





    21001 VAN BORN ROAD, TAYLOR, MICHIGAN                          48180
    -------------------------------------                          -----
   (Address of Principal Executive Offices)                      (Zip Code)




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






<PAGE>


ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

         The following information is being provided under Item 12 and is being
furnished under Item A in accordance with SEC Release No. 33-8216.

         (c)  Exhibits

                 99.1  Press Release of Masco Corporation, dated May 6, 2003,
         reporting Masco Corporation's financial results for the first quarter
         of 2003.

                 99.2  Supplemental Information prepared for use in connection
         with the financial results for the first quarter of 2003.

         ITEM 9.  REGULATION FD DISCLOSURE.

         This information set forth under "Item 9. Regulation FD Disclosure" is
intended to be furnished under Item 9 and also under "Item 12. Results Of
Operations And Financial Condition" in accordance with SEC Release No. 33-8216.
Such information, including the Exhibits attached hereto under Item 7, shall not
be deemed "filed" for purposes of Section 18 of the Securities Act under of
1934, nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.

         Attached and incorporated herein by reference as Exhibit 99.1 is a copy
of a press release of Masco Corporation, dated May 6, 2003, reporting Masco
Corporation's financial results for the first quarter of 2003.

         On May 6, 2003, Masco Corporation will hold an investor conference and
webcast to disclose financial results for the first quarter of 2003. The
Supplemental Information package for use at this conference is attached and
incorporated by reference herein as Exhibit 99.2. All information in the
Supplemental Information package is presented as of March 31, 2003, and Masco
Corporation does not assume any obligation to correct or update such information
in the future.

<PAGE>
                                    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/ Timothy Wadhams
                                              -------------------------------
                                          Name:  Timothy Wadhams
                                          Title: Vice President and
                                                  Chief Financial Officer



May 6, 2003


<PAGE>


                                  EXHIBIT INDEX


               99.1    Press Release of Masco Corporation, dated May 6, 2003,
                       reporting Masco Corporation's financial results for the
                       first quarter of 2003.

               99.2    Supplemental Information prepared for use in connection
                       with the financial results for the first quarter of 2003.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>k76743exv99w1.txt
<DESCRIPTION>PRESS RELEASE DATED MAY 6, 2003
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.1

FOR IMMEDIATE RELEASE                                Contact:
                                                     Samuel Cypert
                                                     313-792-6646








                            MASCO CORPORATION REPORTS
                        FIRST QUARTER SALES AND EARNINGS
                AND FORECASTS RECORD SALES AND EARNINGS FOR 2003



         Taylor, Michigan (May 6, 2003) -- Masco Corporation (NYSE:MAS)
today reported that net sales for the first quarter ended March 31, 2003, aided
by acquisitions, increased 19 percent to a first quarter record $2.5 billion,
compared with $2.1 billion for the first quarter of 2002. Net income for the
quarter was $165.8 million and earnings per common share increased to $.32,
compared with $.12 per common share for the 2002 first quarter (including a $.19
per common share non-cash goodwill impairment charge).

         Operating profit margins in the 2003 first quarter were negatively
impacted by sales being somewhat lower than expected due to adverse weather
conditions in certain markets and by higher energy, insurance and pension costs.

         The Company's favorable sales performance has continued early in the
current quarter, and, based on present business trends, the Company believes
that second quarter earnings should approximate $.43 to $.45 per common share
and, as previously forecast, expects to achieve record sales and earnings for
2003 with full-year earnings in a range of $1.65 to $1.70 per common share.

         Headquartered in Taylor, Michigan, Masco Corporation is one of the
world's leading manufacturers of home improvement and building products as well
as a leading provider of services that include the installation of insulation
and other building products.



<PAGE>




         A conference call regarding the Company's first quarter 2003 sales and
earnings is scheduled for Tuesday, May 6, 2003 at 10:30 a.m. ET. Participants in
the call are asked to register five to ten minutes prior to the scheduled start
time by dialing (913) 981-4910 (confirmation #624313). The conference call will
be webcast simultaneously on the Company's website at www.masco.com and
supplemental material, including the financial data referred to on the call and
a reconciliation of all non-GAAP information provided on the call will also be
available on the website. A replay of the call will be available on Masco's
website or by phone by dialing (719) 457-0820 (replay access code #624313)
approximately two hours after the end of the call and will continue through May
12, 2003.

         Masco Corporation's press releases and other information are available
through the Company's toll free number, 1-800-MAS-NEWS, or you may visit Masco's
website at www.masco.com.



                                     # # # #





























Statements contained herein may include certain forward-looking statements
regarding Masco's future sales, earnings growth potential and other
developments. Actual results may vary materially because of external factors
such as interest rate fluctuations, changes in consumer spending and other
factors over which management has no control. Additional information about our
products, markets and conditions, which could affect our future performance, is
contained in the Company's filings with the Securities and Exchange Commission
and is available on Masco's website at www.masco.com.

<PAGE>


MASCO CORPORATION ANNOUNCES
FIRST QUARTER SALES AND EARNINGS


Amounts are in thousands, except per share data.

<TABLE>
<CAPTION>
                                                                                        Three Months Ended
                                                                                             March 31
                                                                                  ----------------------------
                                                                                      2003            2002
                                                                                  -----------      -----------
<S>                                                                               <C>              <C>
Net Sales                                                                         $ 2,498,300      $ 2,100,000

Cost of Sales                                                                       1,744,540        1,454,050
                                                                                  -----------      -----------

     Gross Profit                                                                     753,760          645,950

Selling, General and Administrative Expenses                                          452,380          355,350

(Income) Regarding Litigation Settlement                                              (13,520)           ---
                                                                                  -----------      -----------

Operating Profit                                                                      314,900          290,600

Other Income (Expense), net                                                           (55,050)         (63,000)
                                                                                  -----------      -----------

     Income before Income Taxes, Minority
           Interest and Cumulative Effect of
           Accounting Change, net                                                     259,850          227,600

Income Taxes                                                                           90,400           77,400
                                                                                  -----------      -----------

Income before Minority Interest and Cumulative
     Effect of Accounting Change, net                                                 169,450          150,200

Minority Interest                                                                       3,650            ---
                                                                                  -----------      -----------

Income before Cumulative Effect of Accounting Change, net                             165,800          150,200

Cumulative Effect of Accounting Change, net                                             ---            (92,400)
                                                                                  -----------      -----------

Net Income                                                                        $   165,800      $    57,800
                                                                                  ===========      ===========

Earnings Per Common Share (Diluted):
     Income before Cumulative Effect
          of Accounting Change, net                                               $      0.32      $      0.31
     Cumulative Effect of Accounting
          Change, net                                                                   ---              (0.19)
                                                                                  -----------      -----------
     As Reported                                                                  $      0.32      $      0.12
                                                                                  -----------      -----------

Average Diluted Common Shares
     Outstanding                                                                      519,600          483,900
                                                                                  ===========      ===========
</TABLE>



<PAGE>
                                                                    EXHIBIT 99.2


                                MASCO CORPORATION
                        BUSINESS AND FINANCIAL HIGHLIGHTS



The Company reports its financial results in accordance with generally accepted
accounting principles (GAAP). However, management believes that certain non-GAAP
performance measures and ratios, used in managing the business, may provide
users of this financial information with additional meaningful comparisons
between current results and results in prior periods. See the attached tables
for supplemental financial data and the corresponding reconciliations to GAAP
financial measures for the three months ended March 31, 2003 and March 31,
2002. Non-GAAP financial measures should be viewed in addition to, and not as an
alternative for the Company's reported results prepared in accordance with
GAAP.



FIRST QUARTER 2003


- -    Net sales, aided by acquisitions, were a first quarter record, increasing
     19 percent, with North American sales increasing 11 percent and
     International sales increasing 66 percent. Stronger sales to non-retail
     customers, sales of acquired companies (particularly Service Partners in
     our Installation Group and Hansgrohe AG in our International Plumbing
     Products Group) and the favorable impact of foreign currencies more than
     offset slower sales growth with certain of the Company's retail customers.

- -    Excluding acquisitions and divestitures, first quarter 2003 consolidated
     net sales increased five percent compared with first quarter 2002 sales;
     North American sales increased two percent and International sales
     increased 20 percent. In local currencies, International sales were flat
     compared with 2002.

- -    The first quarter two percent organic growth in North America is below the
     Company's historic rate of internal growth. Given the economic challenges
     in the first quarter, including adverse weather conditions, the Iraqi war,
     and higher energy costs reducing consumer disposable income, this lower
     rate of growth compares favorably with most of our peer group. The Company
     expects that its organic growth rate for the remainder of the year should
     be higher than that achieved in the first quarter.





                                       1

<PAGE>




                                MASCO CORPORATION
                        BUSINESS AND FINANCIAL HIGHLIGHTS

FIRST QUARTER 2003 (CONTINUED)


- -    The Company reported net income of $165.8 million or $.32 per common share,
     at the higher end of the Company's previously forecast earnings guidance
     range of $.30-$.32 per common share.

- -    The Company estimates that adverse weather conditions (particularly
     impacting new residential construction sites) reduced first quarter 2003
     sales by approximately 2-3 percent from what was anticipated at the
     beginning of the quarter, resulting in earnings per common share being
     $.02-$.03 lower than originally expected. Historically, a substantial
     portion of weather-deferred sales are usually recovered later in the year.

     As previously announced, first quarter earnings were also adversely
     affected by the expense resulting from the accelerated vesting of deferred
     compensation due to the recent unexpected passing of Masco's President,
     which reduced earnings by approximately $.03 per common share. In addition,
     the Company estimates that higher energy prices impacting material, freight
     and other operating costs during the quarter reduced earnings by
     approximately $.02 per common share. The Company also incurred
     higher-than-normal expenses in the quarter related to the installation of
     new Color Solutions Centers at Home Depot stores, the planned rollout of a
     new paint product line at Wal-Mart and certain plant start-up costs.

     These reductions were partially offset by $.01 per common share of realized
     gains from the sale of marketable securities and $.02 per common share of
     insurance recovery income related to the Behr litigation. The Company
     expects further insurance recoveries related to the Behr litigation later
     in the year.

- -    Key retailer sales growth in the quarter increased four percent, compared
     with an increase of three percent in the fourth quarter of 2002. Combined
     sales to Home Depot, Lowe's and Wal-Mart in the first quarter of 2003,
     increased by approximately three percent compared with a strong 18 percent
     in the 2002 first quarter.




                                       2


<PAGE>




                                MASCO CORPORATION
                        BUSINESS AND FINANCIAL HIGHLIGHTS

FIRST QUARTER 2003 (CONTINUED)

- -    Sales by segment in the 2003 first quarter versus the 2002 first quarter
     were:

     -   Cabinets and Related Products sales were up seven percent;

     -   Plumbing Products sales were up 32 percent;

     -   Installation and Other Services sales were up 39 percent;

     -   Decorative Architectural Products sales were relatively flat; and

     -   Other Specialty Products sales increased 23 percent.

- -    Gross margins were 30.2 percent in the 2003 first quarter compared with
     30.8 percent in 2002. The decrease reflects lower than expected sales due
     to adverse weather and increased energy, insurance and pension costs as
     well as relatively higher sales in product segments with somewhat lower
     margins.

- -    Operating margins decreased to 12.6 percent compared with 13.8 percent in
     the first quarter of 2002. Lower operating margins reflect $21 million of
     accelerated benefit expense related to the unexpected passing of the
     Company's President as well as the items noted above which lowered gross
     margins, partially offset by $14 million of Behr litigation insurance
     recovery.

- -    SG&A expense as a percent of sales was 18.1 percent compared with 16.9
     percent in the 2002 first quarter. SG&A expense in the 2003 first quarter
     included the above-mentioned accelerated benefit expense. Excluding the
     benefit expense, SG&A expense would have been 17.3 percent of sales.

- -    General corporate expense was 1.1 percent of sales in the first quarter of
     both 2003 and 2002.

- -    Inventory days were 60 days at March 31, 2003 compared with 55 days at
     March 31, 2002.




                                       3

<PAGE>




                                MASCO CORPORATION
                        BUSINESS AND FINANCIAL HIGHLIGHTS

FIRST QUARTER 2003 (CONTINUED)

- -    Accounts receivable at the end of the first quarter were 56 days compared
     with 58 days a year ago, despite extended payment terms with certain
     customers.

- -    Accounts payable days at the end of the first quarter improved to 35 days
     from 24 days a year ago, as we continue to negotiate more favorable
     supplier terms.

- -    Working capital at March 31, 2003 (defined as accounts receivable and
     inventories less accounts payable) improved to 21.9 percent of the last
     twelve months of sales from 22.1 percent a year earlier.

- -    Internal growth and working capital management all contributed to
     improvement in the last twelve months of operating profit return (excluding
     the charge for the Behr litigation, net) on net operating assets (defined
     as accounts receivable, inventory, property and equipment, goodwill and
     other intangibles less accounts payable) to 17.9 percent for the 2003 first
     quarter compared with 16.9 percent for the comparable period in 2002.

- -    The Company's tax rate was 34.8 percent in the first quarter of 2003
     compared with 34.0 for the comparable period of the prior year. The rate
     increase is principally the result of recent acquisitions increasing the
     proportion of domestic income, which is generally taxed at higher rates
     than foreign income. The Company anticipates that its tax rate for 2003
     will approximate 35 percent.

- -    At the end of the quarter, the Company had a strong balance sheet, with
     approximately $1.1 billion in cash and marketable securities and $2 billion
     in unused bank lines.

- -    Debt as a percent of total capitalization was 47 percent at both March 31,
     2003 and December 31, 2002.

- -    The Company repurchased approximately 14 million common shares during the
     quarter. Approximately two million of these shares were used for employee
     long-term stock incentive plans.



                                       4


<PAGE>




                                MASCO CORPORATION
                        BUSINESS AND FINANCIAL HIGHLIGHTS

FIRST QUARTER 2003 (CONCLUDED)

- -    As previously announced, beginning January 1, 2003, the Company will
     expense stock options on a prospective basis.

- -    The weighted average diluted shares outstanding for the quarter were 519.6
     million (528.5 million for the quarter ended December 31, 2002). Shares
     outstanding at the end of the quarter, including the reduction for shares
     repurchased and for the portion not included in the first quarter weighted
     average shares outstanding, would have been approximately 514 million.
     Contingently issuable shares utilized in the calculation of earnings per
     share in the first quarter were based on a quarter end share price of
     $18.62.

- -    As previously announced, in late January 2003 the Company acquired
     PowerShot Tool Company, Inc., a leading manufacturer of fastening products,
     including staple guns, glue guns, hammer tackers and riveting products,
     headquartered in Florham Park, New Jersey.



FULL-YEAR OUTLOOK

- -    In the second quarter of 2003, the Company completed the sale of its 42
     percent equity interest in Emco Limited for cash proceeds of approximately
     $75 million. The sale resulted in a pre-tax gain of approximately $5
     million to the Company.

- -    In early May 2003, Masterchem, makers of KILZ(R) brand primers, announced a
     new product launch, KILZ(TM) Casual Colors(TM) one-coat latex paint.
     Available in a variety of finishes and colors for interior and exterior
     use, this line will be offered in select Wal-Mart stores throughout the
     United States. The line will be sold in a new non-traditional container
     designed specifically for ease of carrying, lifting and pouring.

- -    Because the first quarter is seasonally a low quarter for Masco, sales and
     earnings per common share in the last three quarters of 2003 should average
     higher than the first quarter results, contributing to significantly
     improved sales and earnings for the full-year 2003.



                                       5

<PAGE>




                                MASCO CORPORATION
                        BUSINESS AND FINANCIAL HIGHLIGHTS

FULL-YEAR OUTLOOK (CONCLUDED)

- -    Masco's favorable sales performance has continued early in the current
     quarter, and, based on present business trends, the Company continues to be
     guardedly optimistic and anticipates that its earnings per common share for
     the second quarter of 2003 should approximate $.43 to $.45 per common share
     and, as previously forecast, expects to achieve record sales and earnings
     for 2003 with full-year earnings in a range of $1.65 to $1.70 per common
     share.


Statements contained herein may include certain forward-looking statements
regarding Masco's future sales, earnings growth potential and other
developments. Actual results may vary materially because of external factors
such as interest rate fluctuations, changes in consumer spending and other
factors over which management has no control. Additional information about our
products, markets and conditions, which could affect our future performance, is
contained in the Company's filings with the Securities and Exchange Commission
and is available on Masco's website at www.masco.com.



                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>4
<FILENAME>k76743exv99w2.txt
<DESCRIPTION>SUPPLEMENTAL INFORMATION
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.2



                      MASCO CORPORATION 2003 FIRST QUARTER


  Page

   1       CONDENSED STATEMENT OF INCOME - 2003 & 2002 QUARTERS

   2       SALES BY SEGMENT AND GEOGRAPHIC AREA - 1st QUARTER 2003 & 2002

   3       2003 QUARTERLY SEGMENT DATA

   4       2002 QUARTERLY SEGMENT DATA

   5       OTHER INCOME (EXPENSE)

   6       CONDENSED STATEMENT OF INCOME 1st QUARTER 2003 & 2002

   7       CONDENSED CONSOLIDATED BALANCE SHEET

           GAAP RECONCILIATIONS:

   8       - Sales Growth excluding acquisitions, divestitures & currency

   9       - Operating Profit, Net Income and E.P.S. for the year ended December
             31, 2002


<PAGE>


                                MASCO CORPORATION
                          CONDENSED STATEMENT OF INCOME
                             2003 and 2002 QUARTERLY
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                              2003                2002 ACTUAL
                                                                   ----------------------   -------------------------
                                                                               1ST
                                                                               QTR.                    YEAR
                                                                   ----------------------   ------------------------
<S>                                                               <C>                      <C>
Net  Sales:
   - North America                                                 $            1,993,000    $            7,956,700
   - International                                                                505,300                 1,462,700
                                                                   ----------------------   ------------------------
   - Combined                                                                   2,498,300                 9,419,400
                                                                   ----------------------
Cost of Sales                                                                   1,744,540                 6,450,590
                                                                   ----------------------   ------------------------
Gross Profit                                                                      753,760                 2,968,810
   (G.P. Margin)                                                                    30.2%                     31.5%
                                                                   ----------------------   ------------------------
S,G & A  Expense: (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                              403,380                 1,408,540
   S,G&A Pct. to Sales                                                              16.1%                     15.0%
                                                                   ----------------------   ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                              350,380                 1,560,270
   (O.P. Margin)                                                                    14.0%                     16.6%
   - North America                                                                283,560                 1,361,270
      (Margin)                                                                      14.2%                     17.1%
   - International                                                                 66,820                   199,000
      (Margin)                                                                      13.2%                     13.6%
                                                                   ----------------------   ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                              350,380                 1,560,270
    (Margin)                                                                        14.0%                     16.6%
                                                                   ----------------------   ------------------------
General Corp. Expense                                                              28,000                    98,000
                                                                   ----------------------   ------------------------
S,G & A  Pct. to Sales (Incl. Gen'l Corp. Exp.)                                     18.1%                     16.0%
                                                                   ----------------------   ------------------------
(Income)/Charge Regarding Litigation Settlement, Net                              (13,520)                  146,800
                                                                   ----------------------   ------------------------
Accelerated Benefit Payments                                                       21,000                         -
                                                                   ----------------------   ------------------------
Reversal of a Charge for the Planned
 Disposition of a Business                                                              -                   (15,630)
                                                                   ----------------------   ------------------------
Operating Profit per F/S                                           $              314,900    $            1,331,100
                                                                   ======================== ========================

Earnings Per Common Share (Diluted)                                $                 0.32    $                 1.33

Goodwill impairment charge                                                              -                     (0.18)

Earnings Per Common Share (Diluted) - Reported                     $                 0.32    $                 1.15
                                                                   ----------------------   ------------------------
</TABLE>


<TABLE>
<CAPTION>
                                                                                    2002 ACTUAL
                                                                 ---------------------------------------------------
                                                                              4TH                     3RD
                                                                              QTR.                    QTR.
                                                                         ------------             ------------
<S>                                                              <C>                       <C>
Net  Sales:
    - North America                                               $            2,074,700    $           2,114,000
    - International                                                              412,700                  404,000
                                                                 ------------------------- ------------------------
    - Combined                                                                 2,487,400                2,518,000

Cost of Sales                                                                  1,729,850                1,717,040
                                                                 ------------------------- ------------------------
Gross Profit                                                                     757,550                  800,960
   (G.P. Margin)                                                                   30.5%                    31.8%
                                                                 ------------------------- ------------------------
S,G & A  Expense: (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                             377,480                  354,460
   S,G&A Pct. to Sales                                                             15.2%                    14.1%
                                                                 ------------------------- ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                             380,070                  446,500
   (O.P. Margin)                                                                   15.3%                    17.7%
   - North America                                                               321,570                  390,300
      (Margin)                                                                     15.5%                    18.5%
   - International                                                                58,500                   56,200
      (Margin)                                                                     14.2%                    13.9%
                                                                 ------------------------- ------------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                             380,070                  446,500
  (Margin)                                                                         15.3%                    17.7%
                                                                 ------------------------- ------------------------
General Corp. Expense                                                             25,000                   25,000
                                                                 ------------------------- ------------------------
S,G & A  Pct. to Sales (Incl. Gen'l Corp. Exp.)                                    16.2%                    15.1%
                                                                 ------------------------- ------------------------
(Income)/Charge Regarding Litigation Settlement, Net                             (19,200)                 166,000
                                                                 ------------------------- ------------------------
Accelerated Benefit Payments                                                           -                        -
                                                                 ------------------------- ------------------------
Reversal of a Charge for the Planned
 Disposition of a Business                                                       (15,630)                       -
                                                                 ------------------------- ------------------------
Operating Profit per F/S                                          $              389,900    $             255,500
                                                                 ========================= ========================

Earnings Per Common Share (Diluted)                               $                 0.37    $                0.24

Goodwill impairment charge                                                             -                        -

Earnings Per Common Share (Diluted) - Reported                    $                 0.37    $                0.24
                                                                 ------------------------- ------------------------
</TABLE>


<TABLE>
<CAPTION>
                                                                                      2002 ACTUAL
                                                                  ----------------------------------------------------
                                                                               2ND                     1ST
                                                                               QTR.                    QTR.
                                                                          ------------             ------------
<S>                                                               <C>                       <C>
Net  Sales:
   - North America                                                  $           1,973,000    $           1,795,000
   - International                                                                341,000                  305,000
                                                                  ------------------------- -----------------------
   - Combined                                                                   2,314,000                2,100,000

Cost of Sales                                                                   1,549,650                1,454,050
                                                                  ------------------------- -----------------------
Gross Profit                                                                      764,350                  645,950
   (G.P. Margin)                                                                    33.0%                    30.8%
                                                                  ------------------------- -----------------------
S,G & A  Expense: (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                              345,250                  331,350
   S,G&A Pct. to Sales                                                              14.9%                    15.8%
                                                                  ------------------------- -----------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                              419,100                  314,600
   (O.P. Margin)                                                                    18.1%                    15.0%
   - North America                                                                372,700                  276,700
      (Margin)                                                                      18.9%                    15.4%
   - International                                                                 46,400                   37,900
      (Margin)                                                                      13.6%                    12.4%
                                                                  ------------------------- -----------------------
Operating Profit (Before Gen'l Corp. Exp., Income/Charge
 & Benefit Payments)                                                              419,100                  314,600
      (Margin)                                                                      18.1%                    15.0%
                                                                  ------------------------- -----------------------
General Corp. Expense                                                              24,000                   24,000
                                                                  ------------------------- -----------------------
S,G & A  Pct. to Sales (Incl. Gen'l Corp. Exp.)                                     16.0%                    16.9%
                                                                  ------------------------- -----------------------
(Income)/Charge Regarding Litigation Settlement, Net                                    -                        -
                                                                  ------------------------- -----------------------
Accelerated Benefit Payments                                                            -                        -
                                                                  ------------------------- -----------------------
Reversal of a Charge for the Planned
 Disposition of a Business                                                              -                        -
                                                                  ------------------------- -----------------------
Operating Profit per F/S                                            $             395,100    $             290,600
                                                                  ========================= =======================

Earnings Per Common Share (Diluted)                                 $                0.43    $                0.31

Goodwill impairment charge                                                              -                    (0.19)

Earnings Per Common Share (Diluted) - Reported                      $                0.43    $                0.12
                                                                  ------------------------- ------------------------
</TABLE>

Notes:
- - Due to the unexpected passing of the Company's President and Chief Operating
  Officer, certain benefits were accelerated and expensed in the first quarter
  of 2003.
- - Data for 2002 exclude a first quarter, non-cash goodwill accounting change
  charge effective January 1, 2002 of $.19 per common share. In addition, per
  common share amounts for the four quarters do not total to the per common
  share amount for the year due to the timing of capital stock transactions and
  the effect of contingently issuable shares.
- - Earnings per common share in the third quarter of 2002 include a $.20 charge
  for a litigation settlement.
- - Earnings in the fourth quarter of 2002 include approximately $35 million of
  income related to insurance proceeds and the reversal of a charge related to
  the planned disposition of a business and approximately $36 million of charges
  related to non-operating asset impairments and realized losses on marketable
  securities.
- - Excluding the effect of unusual items (principally the Behr litigation
  settlement charge, net and a non-cash accounting change charge related to
  goodwill impairment), net income for the year 2002 was $780 million or $1.52
  per common share (see page 9 for the GAAP reconciliation).


<PAGE>


                                MASCO CORPORATION
                      SALES BY SEGMENT AND GEOGRAPHIC AREA
                          2003 and 2002 FIRST QUARTERS
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                    First Quarter                            1st Qtr '03
                                                      ------------------------------------------
                                                                                                                 vs.
                                                           2003                      2002                    1st Qtr '02
                                                      ----------------          ----------------          ------------------

<S>                                                   <C>                       <C>                       <C>
Cabinets & Related Products                           $           699           $           656                 +   7%

Plumbing Products                                                 613                       464                 +  32%

Installation & Other Services                                     542                       390                 +  39%

Decorative Architectural Products                                 360                       359                     0%

Other Specialty Products                                          284                       231                 +  23%

                                                         -------------             -------------

   Total                                              $         2,498           $         2,100                 +  19%
                                                         =============             =============



North America                                         $         1,993           $         1,795                 +  11%

International                                                     505                       305                 +  66%

                                                         -------------             -------------

   Total, as above                                    $         2,498           $         2,100                 +  19%
                                                         =============             =============
</TABLE>

Excluding acquisitions and divestitures, net sales increased 5 percent and
international sales in local currencies were flat compared with the first
quarter of 2002 (see page 8 for the GAAP reconciliation).



<PAGE>


                                MASCO CORPORATION
                          SEGMENT DATA - QUARTERLY 2003
                                  (IN MILLIONS)

<TABLE>
<CAPTION>


                                                       YEAR           4th Qtr.        3rd Qtr.          2nd Qtr.        1st Qtr.
                                                       ----           --------        --------          --------        --------
<S>                                            <C>               <C>              <C>             <C>              <C>
NET SALES:
  - Cabinets and Related Products               $                $                $               $                 $          699
  - Plumbing Products                                                                                                          613
  - Installation and Other Services                                                                                            542
  - Decorative Architectural Products                                                                                          360
  - Other Specialty Products                                                                                                   284
                                                   ------------    -------------    ------------     -------------    -------------
  - TOTAL                                                                                                                    2,498
                                                   ============    =============    ============     =============    =============
  - North America                                                                                                            1,993
  - International, principally Europe                                                                                          505
                                                   ------------    -------------    ------------     -------------    -------------
  - TOTAL, AS ABOVE                                                                                                          2,498
                                                   ============    =============    ============     =============    =============
OPERATING PROFIT:
  - Cabinets and Related Products                                                                                               84
  - Plumbing Products                                                                                                           84
  - Installation and Other Services                                                                                             77
  - Decorative Architectural Products                                                                                           62
  - Other Specialty Products                                                                                                    43
                                                   ------------    -------------    ------------     -------------    -------------
  - TOTAL                                                                                                                      350
                                                   ============    =============    ============     =============    =============
  - North America                                                                                                              283
  - International, principally Europe                                                                                           67
                                                   ------------    -------------    ------------     -------------    -------------
  - TOTAL, AS ABOVE                                                                                                            350
                                                   ============    =============    ============     =============    =============
GENERAL CORP.  EXPENSE                                                                                                          28
                                                   ------------    -------------    ------------     -------------    -------------
(INCOME) RELATED TO LITIGATION SETTLEMENT, NET                                                                                 (14)
                                                   ------------    -------------    ------------     -------------    -------------
ACCELERATED BENEFIT PAYMENTS                                                                                                    21
                                                   ------------    -------------    ------------     -------------    -------------
OPERATING PROFIT, AFTER
  GENERAL CORP. EXPENSE AND ADJUSTMENTS                                                                                        315

OTHER INCOME (EXPENSE), NET                                                                                                    (55)
                                                   ------------    -------------    ------------     -------------    -------------

INCOME BEFORE TAX AND MINORITY INTEREST        $                $                $               $                 $           260
                                                   ============    =============    ============     =============    =============
MARGINS:
  - Cabinets and Related Products                                                                                             12.0%
  - Plumbing Products                                                                                                         13.7%
  - Installation and Other Services                                                                                           14.2%
  - Decorative Architectural Products                                                                                         17.2%
  - Other Specialty Products                                                                                                  15.1%
  - TOTAL                                                                                                                     14.0%

  - North America                                                                                                             14.2%
  - International, principally Europe                                                                                         13.3%
  - TOTAL, AS ABOVE                                                                                                           14.0%
</TABLE>


Notes:
- - Operating profit margins above are before general corporate expense, income
  related to a litigation settlement (which relates to the Decorative
  Architectural Products segment) and accelerated benefit payments.
- - Due to the unexpected passing of the Company's President and Chief Operating
  Officer, certain benefits were accelerated and expensed in the first quarter
  of 2003.




<PAGE>

                                MASCO CORPORATION
                          SEGMENT DATA - QUARTERLY 2002
                                  (IN MILLIONS)
<TABLE>
<CAPTION>


                                                      YEAR             4th Qtr.         3rd Qtr.         2nd Qtr.        1st Qtr.
                                                      ----             --------         --------         --------        --------
<S>                                            <C>              <C>              <C>             <C>               <C>
NET SALES:
  - Cabinets and Related Products               $         2,798 $            722 $            738 $            682 $            656
  - Plumbing Products                                     2,031              523              535              509              464
  - Installation and Other Services                       1,845              568              489              398              390
  - Decorative Architectural Products                     1,599              361              439              440              359
  - Other Specialty Products                              1,146              313              317              285              231
                                                   ------------     ------------     ------------     ------------     ------------
  - TOTAL                                                 9,419            2,487            2,518            2,314            2,100
                                                   ============     ============     ============     ============     ============

  - North America                                         7,956            2,074            2,114            1,973            1,795
  - International, principally Europe                     1,463              413              404              341              305
                                                   ------------     ------------     ------------     ------------     ------------
  - TOTAL, AS ABOVE                                       9,419            2,487            2,518            2,314            2,100
                                                   ============     ============     ============     ============     ============

OPERATING PROFIT:
  - Cabinets and Related Products                           379               98              114              100               67
  - Plumbing Products                                       334               92               83               87               72
  - Installation and Other Services                         304               87               82               71               64
  - Decorative Architectural Products                       338               63               97              105               73
  - Other Specialty Products                                221               56               70               56               39
                                                   ------------     ------------     ------------     ------------     ------------
  - TOTAL                                                 1,576              396              446              419              315
                                                   ============     ============     ============     ============     ============

  - North America                                         1,377              337              390              373              277
  - International, principally Europe                       199               59               56               46               38
                                                   ------------     ------------     ------------     ------------     ------------
  - TOTAL, AS ABOVE                                       1,576              396              446              419              315
                                                   ============     ============     ============     ============     ============

GENERAL CORP.  EXPENSE                                       98               25               25               24               24
                                                   ------------     ------------     ------------     ------------     ------------

CHARGE FOR LITIGATION SETTLEMENT, NET                       147              (19)             166                -                -
                                                   ------------     ------------     ------------     ------------     ------------

OPERATING PROFIT,  AFTER
  GENERAL CORP. EXPENSE AND CHARGE                        1,331              390              255              395              291

OTHER INCOME (EXPENSE), NET                                (300)             (91)             (76)             (70)             (63)
                                                   ------------     ------------     ------------     ------------     ------------

INCOME BEFORE TAX AND ACCTG. CHANGE             $         1,031 $            299 $            179 $            325 $            228
                                                   ============     ============     ============     ============     ============

MARGINS:
  - Cabinets and Related Products                          13.5%            13.6%            15.4%            14.7%            10.2%
  - Plumbing Products                                      16.4%            17.6%            15.5%            17.1%            15.5%
  - Installation and Other Services                        16.5%            15.3%            16.8%            17.8%            16.4%
  - Decorative Architectural Products                      21.1%            17.5%            22.1%            23.9%            20.3%
  - Other Specialty Products                               19.3%            17.9%            22.1%            19.6%            16.9%
  - TOTAL                                                  16.7%            15.9%            17.7%            18.1%            15.0%

  - North America                                          17.3%            16.2%            18.4%            18.9%            15.4%
  - International, principally Europe                      13.6%            14.3%            13.9%            13.5%            12.5%
  - TOTAL, AS ABOVE                                        16.7%            15.9%            17.7%            18.1%            15.0%
</TABLE>


Notes:
- - Operating profit margins above are before both general corporate expense and
  a charge for litigation settlement, net, which relates to the Decorative
  Architectural Products segment.
- - Included in operating profit of the Plumbing Products segment for the fourth
  quarter and year is $15.6 million of income related to the reversal of a
  charge for the planned disposition of a business.

<PAGE>


                                MASCO CORPORATION
                             OTHER INCOME (EXPENSE)
                             2003 AND 2002 QUARTERS
                                  (IN MILLIONS)
<TABLE>
<CAPTION>
                                                                            2003 ACTUAL
                                 ---------------------------------------------------------------------------------------------------
                                                           4TH                   3RD                  2ND                   1ST
                                       YEAR                QTR.                  QTR.                 QTR.                  QTR.
                                       ----                ----                  ----                 ----                  ----

<S>                               <C>                 <C>                 <C>                  <C>                  <C>
Interest Expense                  $                      $                   $                    $                    $     (67.6)

Impairment Charge for
   Long-Term Investments                                                               -                    -                    -

Income from Cash and
   Cash Investments                                                                                                            2.5

Other Interest Income                                                                                                          1.9

Equity Earnings, Net                                                                                                           0.5

Other, Net (A)                                                                                                                 7.7
                                     -----------         -----------          -----------          -----------          -----------

Total Other Income (Expense)     $                    $           -        $           -        $           -        $       (55.0)
                                     ===========         ===========          ===========          ===========          ===========
</TABLE>


<TABLE>
<CAPTION>
                                                                            2002 ACTUAL
                                 ---------------------------------------------------------------------------------------------------
                                                           4TH                  3RD                 2ND                1ST
                                          YEAR             QTR.                 QTR.                QTR.               QTR.
                                          ----             ----                 ----                ----               ----

<S>                              <C>                 <C>                 <C>                 <C>                 <C>
Interest Expense                 $      (236.9)      $       (66.6)      $       (61.0)      $       (54.2)      $      (55.1)

Impairment Charge for
   Long-Term Investments                 (24.1)              (24.1)                 -                   -                  -

Income from Cash and
   Cash Investments                        7.9                 3.9                 2.1                 1.1                0.8

Other Interest Income                      6.1                 2.7                 1.9                 0.6                0.9

Equity Earnings, Net                      14.2                 1.2                 5.7                 5.4                1.9

Other, Net (A)                           (67.3)               (7.5)              (25.0)              (23.3)             (11.5)
                                    -----------        ------------         -----------         -----------         ----------

Total Other Income (Expense)     $      (300.1)      $       (90.4)      $       (76.3)      $       (70.4)      $      (63.0)
                                    ===========        ============         ===========         ===========         ==========

</TABLE>
Note:
(A) Other, net for the quarter ended March 31, 2003 includes realized gains on
    the sale of marketable securities of approximately $8 million.




<PAGE>


                                MASCO CORPORATION
              CONDENSED STATEMENT OF INCOME FOR THREE MONTHS ENDED
                               3/31/03 AND 3/31/02
                  (AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                                               Three Months Ended
                                                                                                    March 31
                                                                                    ----------------------------------------
Line No.                                                         % Change                 2003                     2002
- --------                                                       ------------         ----------------        ----------------
<S>                                                           <C>                <C>                    <C>

   1    Net Sales                                                       19%         $     2,498,300        $      2,100,000

   2    Cost of Sales                                                   20%               1,744,540               1,454,050
                                                                                    ----------------        ----------------
   3    Gross Profit                                                    17%                 753,760                 645,950
                                                                                    ----------------        ----------------
        Operating Profit:

   4       - Before Gen'l Corp. Exp., Litigation Income
             & Benefit Payments (3-8)                                   11%                 350,380                 314,600

   5       - After Gen'l Corp. Exp., Litigation Income
             and Benefit Payments (3-9-10)                               8%                 314,900                 290,600
                                                                                   ----------------         ---------------

        S,G&A Exp.:

   6       - Gen'l Corp. Exp.                                           17%                  28,000                  24,000

   7       - Accelerated Benefit Payments (A)                                                21,000                       -

   8       - All Other                                                  22%                 403,380                 331,350
                                                                                    ----------------        ----------------
   9       - Total S,G&A                                                27%                 452,380                 355,350
                                                                                    ----------------        ----------------
   10   (Income) Related to Litigation Settlement (B)                                       (13,520)                      -

   11   Other Income (Expense), Net                                    -13%                 (55,050)                (63,000)
                                                                                    ----------------       -----------------
   12   Income Before Income Taxes, Minority Interest
           and Cumulative Effect of Accounting Change, net (5-11)       14%                 259,850                 227,600

   13   Income Taxes                                                    17%                  90,400                  77,400
           (Tax Rate)                                                                         34.8%                   34.0%
                                                                                    ----------------       -----------------
   14   Income Before Minority Interest and
           Cumulative Effect of Accounting Change, net                  13%                 169,450                 150,200

   15   Minority interest (C)                                                                (3,650)                      -

   16   Cumulative Effect of Accounting Change, net                                               -                 (92,400)
                                                                                    ----------------        ----------------
   17   Net Income                                                     187%         $       165,800         $         57,800
                                                                                    ================        ================

        Earning Per Common Share (Diluted)                             167%         $          0.32         $           0.12
                                                                                    ================        ================
        Average (Diluted) Common Shares                                  7%                 519,600                 483,900

</TABLE>


<TABLE>
<CAPTION>
                                                                                            As a Percent of Sales
                                                                                              Three Months Ended
                                                                                                   March 31
                                                                              ---------------------------------------------
Line No.                                                                            2003                         2002
- --------                                                                      ------------------           ----------------

<S>                                                                           <C>                          <C>
   1       Net Sales                                                               100.0%                        100.0%

   2       Cost of Sales                                                            69.8%                         69.2%
                                                                                 ----------                    ----------
   3       Gross Profit                                                             30.2%                         30.8%
                                                                                 ----------                    ----------
           Operating Profit:

   4          - Before Gen'l Corp. Exp., Litigation Income
                & Benefit Payments (3-8)                                            14.0%                         15.0%

   5          - After Gen'l Corp. Exp., Litigation Income
                and Benefit Payments (3-9-10)                                       12.6%                         13.8%
                                                                                 ----------                    ----------

           S,G&A Exp.:

   6          - Gen'l Corp. Exp.                                                     1.1%                          1.1%

   7          - Accelerated Benefit Payments (A)                                     0.8%                             -

   8          - All Other                                                           16.2%                         15.8%
                                                                                 ----------                    ----------
   9          - Total S,G&A                                                         18.1%                         16.9%
                                                                                 ----------                    ----------
   10      (Income) Related to Litigation Settlement (B)                            -0.5%                             -

   11      Other Income (Expense), Net                                              -2.2%                         -3.0%
                                                                                 ----------                    ----------
   12      Income Before Income Taxes, Minority Interest
              and Cumulative Effect of Accounting Change, net (5-11)                10.4%                         10.8%

   13      Income Taxes                                                              3.6%                          3.6%
              (Tax Rate)                                                         ----------                    ----------
                                                                                     6.8%                          7.2%
   14      Income Before Minority Interest and
              Cumulative Effect of Accounting Change, net

   15      Minority interest (C)                                                    -0.2%                          0.0%

   16      Cumulative Effect of Accounting Change, net                               0.0%                         -4.4%
                                                                                 ----------                    ----------
   17      Net Income                                                                6.6%                          2.8%
                                                                                 ==========                    ==========

           Earning Per Common Share (Diluted)

           Average (Diluted) Common Shares
</TABLE>


           Notes:
           (A) Due to the unexpected passing of the Company's President
           and Chief Operating Officer, certain benefits were accelerated
           and expensed in the first quarter of 2003.

           (B) The first quarter of 2003 includes $13.5 million of income
           related to insurance proceeds for a litigation settlement
           regarding the Company's subsidiary, Behr Process Corporation.


           (C) The Company owns 64% of Hansgrohe AG; this line is the
           reduction of income to reflect the minority interest.




<PAGE>

                                MASCO CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                March 31,                December 31,              March 31,
ASSETS                                           2003                       2002                     2002
                                           -----------------          -----------------         ----------------

<S>                                        <C>                        <C>                       <C>
Current  Assets:

   Cash and Cash Investments                   $    748,450               $  1,066,570              $   238,160

   Receivables                                    1,683,740                  1,546,360                1,377,180

   Inventories                                    1,123,200                  1,055,620                  897,250

   Prepaid Expenses and Other                       272,550                    281,220                  171,000
                                           -----------------          -----------------         ----------------

      Total Current Assets                        3,827,940                  3,949,770                2,683,590


Equity Investments                                   70,110                     67,810                   83,800

Property and Equipment, Net                       2,364,930                  2,315,060                2,009,720

Goodwill, Net                                     4,346,310                  4,297,150                3,271,220

Other Intangible Assets, Net                        351,710                    353,870                  308,600

Other Noncurrent Assets                           1,009,320                  1,066,770                  985,960
                                           -----------------          -----------------         ----------------

                                               $ 11,970,320               $ 12,050,430              $ 9,342,890
                                           =================          =================         ================


LIABILITIES

Current Liabilities:

   Notes Payable                               $    301,050               $    321,180              $   130,690

   Accounts Payable                                 657,150                    541,590                  402,540

   Accrued Liabilities                              988,600                  1,069,680                  782,720
                                           -----------------          -----------------         ----------------

      Total Current Liabilities                   1,946,800                  1,932,450                1,315,950


Long-Term Debt                                    4,321,770                  4,316,470                3,576,350

Deferred Taxes and Other                            502,630                    507,670                  217,760


SHAREHOLDERS' EQUITY                              5,199,120                  5,293,840                4,232,830
                                           -----------------          -----------------         ----------------

                                               $ 11,970,320               $ 12,050,430              $ 9,342,890
                                           =================          =================         ================
</TABLE>


<PAGE>


                                MASCO CORPORATION
                            GAAP SALES RECONCILIATION
      EXCLUDING EFFECT OF ACQUISITIONS, DIVESTITURES & CURRENCY TRANSLATION
                                    3/31/2003
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                        March 31,

                                                                 2003                     2002
                                                              ----------------    ----------------
<S>                                                           <C>                 <C>
Consolidated Net Sales, as reported                               $ 2,498,300         $ 2,100,000
  - Acquisitions                                                     (311,300)                  -
  - Divestitures                                                            -             (11,200)
                                                              ----------------    ----------------
Consolidated Net Sales,
    excluding acquisitions & divestitures                         $ 2,187,000         $ 2,088,800
                                                              ================    ================




North American Net Sales, as reported                             $ 1,993,000         $ 1,795,200
  - Acquisitions                                                     (172,000)                  -
  - Divestitures                                                            -             (11,200)
                                                              ----------------    ----------------
North American Net Sales,
    excluding acquisitions & divestitures                         $ 1,821,000         $ 1,784,000
                                                              ================    ================



International Net Sales, as reported                              $   505,300         $   305,000
  - Acquisitions                                                     (139,300)                  -
  - Divestitures                                                            -                   -
                                                              ----------------    ----------------
International Net Sales,
    excluding acquisitions & divestitures                             366,000             305,000
  - Currency Translation                                              (60,000)                  -
                                                              ----------------    ----------------
International Net Sales,
    excluding acquisitions, divestitures & currency               $   306,000         $   305,000
                                                              ================    ================
</TABLE>

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

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


                                MASCO CORPORATION
           GAAP RECONCILIATION OF OPERATING PROFIT, NET INCOME AND EPS
                      TWELVE MONTHS ENDED DECEMBER 31, 2002
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                                               EPS        OPERATING PROFIT     NET INCOME

<S>                                                         <C>          <C>                 <C>
        As reported                                          $ 1.15         $ 1,331,100         $ 589,700

        Litigation Charge, Net                                 0.18             146,800            92,300
        Charge for Goodwill Impairment                         0.18                                92,400
        Gain on Disposition of Businesses                     (0.02)            (15,600)           (9,800)
        Impairment Charge for Non-operating Assets             0.03                                15,100

                                                            --------      --------------      ------------
        As Reconciled                                        $ 1.52         $ 1,462,300         $ 779,700
                                                            ========      ==============      ============
</TABLE>





</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
