NAVIGATION

MASCO CORPORATION REPORTS RECORD SALES AND EARNINGS FOR 2003, ANNOUNCES DIVESTITURE PROGRAM AND FORECASTS ANOTHER RECORD YEAR FOR 2004

February 13, 2004
Taylor, Michigan (February 13, 2004) - Masco Corporation (NYSE: MAS) today reported that net sales from continuing operations for the year ended December 31, 2003, aided by acquisitions, increased 20 percent to a record $10.9 billion compared with $9.1 billion for 2002.

Income from continuing operations for the year ended December 31, 2003 was $740 million or $1.51 per common share, which includes the recognition of a non-cash, pre-tax goodwill impairment charge of $142 million ($118 million or $.24 per common share, after tax), the majority of which relates to European businesses that the Company plans to divest. In addition, the Company's results include previously announced charges primarily related to certain European businesses and income from an adjustment of the Behr litigation accrual, which principally offset each other.

Excluding the impact of the goodwill impairment charge, income from continuing operations was $1.75 per common share. This result is above the Company's previous guidance that earnings, excluding any fourth quarter 2003 unusual items, would be in the range of $1.68 to $1.70 per common share.

Fourth quarter 2003 net sales from continuing operations increased 18 percent to $2.9 billion compared with $2.4 billion in the 2002 fourth quarter. Income from continuing operations for the fourth quarter of 2003 was $93 million or $.19 per common share and included a non-cash, pre-tax charge for goodwill impairment of $137 million ($113 million or $.24 per common share, after tax). Excluding such charge, income from continuing operations was $.43 per common share.

The Company reviews its business portfolio on an ongoing basis as part of its corporate strategic planning and has determined that several of its European businesses are not core to the Company's long-term growth strategy and, accordingly, has embarked on a plan of disposition. These businesses had combined 2003 net sales in excess of $350 million and the Company expects net proceeds from the dispositions to exceed $300 million. The dispositions are expected to be completed within the next twelve months and the Company expects to recognize a modest net loss upon the disposition of all of these businesses. First quarter 2004 results will include a charge to reflect those businesses that are expected to be divested at a loss. Any gains resulting from the disposition of individual businesses will be recognized as such transactions are completed.

The Company continues to experience favorable sales performance in early 2004, and, based on current business trends, believes that it will achieve record sales and earnings for 2004 with full-year earnings from continuing operations in a range of $1.80 to $1.90 per common share. Earnings guidance for 2004 includes a reduction of approximately $.05 per common share resulting from the absence of earnings related to the European businesses to be divested. These businesses will be treated as discontinued operations effective in the first quarter of 2004, which will include the reclassification of their prior period results to discontinued operations. This year's earnings guidance also reflects the Company's expectation that certain operating expenses will continue to increase in 2004, including such items as energy, insurance and certain material and freight costs.

Based on current business trends, the Company anticipates that first quarter 2004 earnings from continuing operations (seasonally the lowest quarter of the year) may be in a range of $.36 to $.38 per common share (excluding the disposition charge), compared with first quarter 2003 reported earnings of $.32 per common share.

Masco Corporation 2003 Highlights:

Full-Year 2003
  • Net sales from continuing operations increased 20 percent to a record $10.9 billion.
  • Key retailer sales were up 10 percent to approximately $3.4 billion.
  • Income from continuing operations was $1.75 per common share excluding the impact of a goodwill impairment charge.
  • The Company retired approximately $430 million of Company debt during 2003.
  • The Company repurchased 37 million shares in 2003 including approximately 2 million shares for employee long-term stock incentive plans.
  • Working capital (defined as accounts receivable and inventories less accounts payable) as a percentage of sales improved to 18.1 percent of sales at December 31, 2003 from 22.5 percent of sales a year earlier.
  • The Company has approximately $1.3 billion of cash and marketable securities at year-end.
Fourth Quarter 2003
  • Net sales from continuing operations increased 18 percent to a record $2.9 billion.
  • Key retailer sales were up 22 percent.
  • Income from continuing operations was $.43 per common share excluding the impact of a goodwill impairment charge compared to $.36 per common share in 2002.
Headquartered in Taylor, Michigan, Masco Corporation is one of the world's leading manufacturers of home improvement and building products as well as a leading provider of services that include the installation of insulation and other building products.

A conference call regarding items contained in this release is scheduled for Friday, February 13, 2004 at 11:00 a.m. ET. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing (913) 981-4900 (confirmation #675846). 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 #675846) approximately two hours after the end of the call and will continue through February 19, 2004.

Masco Corporation's press releases and other information are available through the Company's toll free number, 1-888-MAS-NEWS, or you may visit Masco's website at www.masco.com. For press releases, click on "Investor Relations" and then on "Link to News Center."

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. The Company believes that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP financial measures and ratios should be viewed in addition to, and not as an alternative for, the Company's reported results. 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. Masco undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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