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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-5794

MASCO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 38-1794485
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)

21001 VAN BORN ROAD, TAYLOR, MICHIGAN 48180
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 313-274-7400

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE, INC.

5 1/4% CONVERTIBLE SUBORDINATED
DEBENTURES DUE 2012 NEW YORK STOCK EXCHANGE, INC.

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

NONE

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS
FOR THE PAST 90 DAYS. YES No / /INDICATE BY CHECK MARK IF DISCLOSURE OF
DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED
HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN
DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III
OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K.

THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S COMMON STOCK HELD BY
NON-AFFILIATES OF THE REGISTRANT ON MARCH 15, 1994 (BASED ON THE CLOSING SALE
PRICE OF $34 1/2 OF THE REGISTRANT'S COMMON STOCK, AS REPORTED ON THE NEW YORK
STOCK EXCHANGE COMPOSITE TAPE ON SUCH DATE) WAS APPROXIMATELY $5,200,000,000.

NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AT MARCH 15, 1994:

156,550,774 SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE

PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT TO BE FILED FOR ITS 1994
ANNUAL MEETING OF STOCKHOLDERS ARE INCORPORATED BY REFERENCE INTO PART III OF
THIS REPORT.
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TABLE OF CONTENTS

ITEM PAGE
- ----- -----
PART I

1. Business........................................................................ 2
2. Properties...................................................................... 7
3. Legal Proceedings............................................................... 9
4. Submission of Matters to a Vote of Security Holders............................. 10
Supplementary Item. Executive Officers of Registrant............................ 10

PART II

5. Market for Registrant's Common Equity and Related Stockholder Matters........... 11
6. Selected Financial Data......................................................... 11
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations.................................................................... 12
8. Financial Statements and Supplementary Data..................................... 16
9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.................................................................... 35

PART III

10. Directors and Executive Officers of the Registrant.............................. 35
11. Executive Compensation.......................................................... 35
12. Security Ownership of Certain Beneficial Owners and Management.................. 35
13. Certain Relationships and Related Transactions.................................. 35
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K................ 36
Signatures...................................................................... 40

FINANCIAL STATEMENT SCHEDULES

Masco Corporation Financial Statement Schedules................................. F-1
MascoTech, Inc. and Subsidiaries Consolidated Financial Statements and Financial
Statement Schedules........................................................... F-9

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PART I

ITEM 1. BUSINESS.

Masco manufactures building, home improvement and home furnishings products
for the home and family. Masco believes that it is the largest domestic
manufacturer of faucets, plumbing supplies, kitchen and bath cabinets and
furniture, and that it is a leading domestic producer of a number of other
building, home improvement and home furnishings products. Masco was incorporated
under the laws of Michigan in 1929 and in 1968 was reincorporated under the laws
of Delaware.

Except as the context otherwise indicates, the terms "Masco" and the
"Company" refer to Masco Corporation and its consolidated subsidiaries.

INDUSTRY SEGMENTS

The following table sets forth for the three years ended December 31, 1993,
the contribution of the Company's industry segments to net sales and operating
profit:

(IN THOUSANDS)
NET SALES
--------------------------------------
1993 1992 1991
---------- ---------- ----------

Building and Home Improvement Products............ $2,188,000 $1,991,000 $1,711,000
Home Furnishings Products......................... 1,698,000 1,534,000 1,430,000
---------- ---------- ----------
$3,886,000 $3,525,000 $3,141,000
---------- ---------- ----------
---------- ---------- ----------

OPERATING PROFIT(1)
--------------------------------------
1993 1992 1991
---------- ---------- ----------

Building and Home Improvement Products............ $ 412,000 $ 368,000 $ 273,000
Home Furnishings Products......................... 69,000 60,000 38,000
---------- ---------- ----------
$ 481,000 $ 428,000 $ 311,000
---------- ---------- ----------
---------- ---------- ----------

(1) Amounts are before general corporate expense.

Additional financial information concerning the Company's operations by
industry segment as of and for each of the three years ended December 31, 1993,
is set forth in Item 8 of this Report in the Note to the Company's Consolidated
Financial Statements captioned "Segment Information."

BUILDING AND HOME IMPROVEMENT PRODUCTS

The Company is among the country's largest manufacturers of brand-name
consumer products designed for the building and improvement of the home,
including faucets, kitchen and bath cabinets, kitchen appliances, bath and
shower enclosure units, spas, shower and plumbing specialties, door locks and
other builders' hardware, air treatment products, venting and ventilating
equipment and water pumps. These products are sold for the home improvement
market to consumers who purchase materials for "do-it-yourself " installation or
installation by contractors or professional tradespeople as well as for the new
home construction market.

The Company manufactures a variety of single and double handle faucets.
DELTA(R) and PEERLESS(R) single and double handle faucets are used on kitchen,
lavatory and other sinks and in bath and shower installations. DELTA faucets are
sold through manufacturers' representatives to distributors who sell the faucets
to plumbers, building contractors, remodelers, retailers and others. PEERLESS
faucets are sold primarily through manufacturers' representatives directly to
retail outlets such as mass merchandisers, home centers and hardware stores and
are also sold under private label. The Company's EPIC(R), ARTISTIC BRASS(R) and
SHERLE WAGNER(TM) faucets and accessories

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produced for the decorator markets and are sold through wholesalers, distributor
showrooms and other outlets. In addition to its domestic manufacturing, the
Company manufactures faucets in Denmark, Italy and Canada.

Sales of faucets approximated $608 million in 1993, $528 million in 1992
and $457 million in 1991. The percentage of operating profit on faucets is
somewhat higher than that on products within the Building and Home Improvement
Products Segment as a whole. The Company believes that the simplicity, quality
and reliability of its faucet mechanisms, its marketing and merchandising
activities, and the development of a broad line of products have accounted for
the continued strength of its faucet sales.

The Company manufactures stock, semi-custom and custom kitchen and bath
cabinetry in a variety of styles and in various price ranges. The Company sells
under a number of trademarks, including MERILLAT(R), KRAFTMAID(R), STARMARK(R)
and FIELDSTONE(R), with sales in both the home improvement and new home
construction markets. Sales of kitchen and bath cabinets were approximately $570
million in 1993, $515 million in 1992 and $425 million in 1991.

The Company's brass and copper plumbing system components and other
plumbing specialties are sold to plumbing, heating and hardware wholesalers and
to home centers, hardware stores, building supply outlets and other mass
merchandisers. These products are marketed for the wholesale trade under the
BRASS-CRAFT(R) trademark and for the "do-it-yourself " market under the PLUMB
SHOP(R) and HOME PLUMBER(R) trademarks and are also sold under private label.

In February, 1994 the Company acquired two leading manufacturers of bath
accessories and other products. Zenith Products Corporation manufactures bath
medicine cabinets, shower curtain rods and rings and other bath storage products
for the home. Zenith's medicine cabinets are sold primarily to "do-it-yourself "
retailers, while its other products are marketed to discount retailers and other
mass merchandise stores. Melard Manufacturing Corporation manufactures bath
hardware, accessories, plumbing specialty products, and other products. Melard's
products are primarily sold for the "do-it-yourself " and residential remodeling
markets, through mass merchandise stores, hardware stores, home centers and
other retail outlets.

Other specialty kitchen and bath consumer products include THERMADOR(R)
cooktops, ovens, ranges and related cooking equipment, which are marketed
through appliance distributors and dealers. The Company's acrylic and gelcoat
bath and shower units and whirlpools are sold under the AQUA GLASS(R) trademark
primarily to wholesale plumbing distributors for use in the home improvement and
new home construction markets. Luxury bath and shower enclosures are
manufactured and sold by the Company under the HUPPE(R) trademark. The Company's
spas are sold under the HOT SPRING SPA(R) and other trademarks directly to
retailers for sale to residential customers.

Premium quality brass rim and mortise locks, knobs and trim and other
builders' hardware are manufactured and sold under the BALDWIN(R) trademark for
the home improvement and new home construction markets. WEISER(R) door locks and
related hardware are sold through contractor supply outlets, hardware
distributors and home center retailers. SAFLOK(TM) electronic locks and
WINFIELD(TM) mechanical locks are sold primarily to the hospitality market.

HOME FURNISHINGS PRODUCTS

The Company has become the leading domestic manufacturer of brand-name
consumer products for the furnishing of the home, including furniture,
upholstery and other fabrics, mirrors, lamps and other decorative accessories.

The Company manufactures a broad array of home furnishings products and
utilizes a variety of distribution channels to market its products. A complete
line of traditional, transitional and contemporary wood and upholstered
furniture is sold under the HENREDON(R) trademark through Henredon galleries
located in furniture stores, designer showrooms, furniture outlets and
department stores. DREXEL(R) and HERITAGE(R) wood and upholstered furniture and
home furnishings accessories are

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marketed through Drexel Heritage galleries located in furniture stores, through
showcase stores which primarily feature Drexel Heritage furniture and also
through independent furniture outlets. The Lexington Furniture Industries group
produces youth-correlated furniture, moderately-priced bedroom and dining room
groups, occasional and upholstered furniture and woven wicker and rattan
products, which are sold through national and regional chains and independent
furniture dealers, department stores and interior designers. Universal Furniture
Limited manufactures dining room, bedroom, occasional wood and upholstered
furniture, which is sold primarily through furniture retailers and department
stores under UNIVERSAL(R), BENCHCRAFT(R) and other trademarks. The Company
believes that Universal is the largest supplier in the United States of wood
dining room furniture, much of which is shipped in unassembled form from the Far
East to assembly and distribution centers in the United States. The Company's
LINEAGE(R) line of wood and upholstered furniture and home furnishings
accessories are sold through exclusive Lineage Pavilions located in retail
furniture stores which also feature furniture accessories manufactured by other
Company operations. The Company also manufactures and sells designer upholstered
products and upholstered furniture under private label to furniture stores and
other retailers. In addition, certain of the Company's furniture is sold to
contract accounts primarily for use in the hospitality market and in commercial
and government buildings. Sales of the Company's furniture products approximated
$1.34 billion in 1993, $1.19 billion in 1992 and $1.13 billion in 1991.

The Company's textile group includes Robert Allen Fabrics, Inc., Ametex
Fabrics, Inc., Sunbury Textile Mills, Inc. and Ramm, Son & Crocker Limited.
Robert Allen markets fabrics, which are used primarily for residential
furnishings, through independent sales representatives to designers and
retailers. Company-operated and independent showrooms have also been established
to sell fabrics and display and sell many of the Company's other home
furnishings products. Ametex designs and converts moderately-priced fabrics for
use in commercial and residential furnishings, which are sold through
independent sales representatives to furniture and other furnishings
manufacturers, fabric jobbers and the hospitality market. Sunbury manufactures
high-quality Jacquard woven fabrics which are sold through sales representatives
primarily to furniture manufacturers and decorative jobbers for furniture and
other decorative applications. Ramm, Son & Crocker is a United Kingdom supplier
of high-quality printed fabrics to the furniture and decorative fabric markets.

GENERAL INFORMATION CONCERNING INDUSTRY SEGMENTS

No material portion of the Company's business is seasonal or has special
working capital requirements although the Company maintains a higher investment
in inventories for certain of its businesses than the average manufacturing
company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Receivables and Inventories," included in Item 7 of
this Report. The Company does not consider backlog orders to be a material
factor in its industry segments, and no material portion of its business is
dependent upon any one customer or subject to renegotiation of profits or
termination of contracts at the election of the federal government. Compliance
with federal, state and local regulations relating to the discharge of materials
into the environment, or otherwise relating to the protection of the
environment, is not expected to result in material capital expenditures by the
Company or to have a material effect on the Company's earnings or competitive
position. In general, raw materials required by the Company are obtainable from
various sources and in the quantities desired.

INTERNATIONAL OPERATIONS

The Company, through its subsidiaries, has manufacturing plants in Belgium,
Canada, the People's Republic of China, Denmark, France, Germany, Hong Kong,
Italy, Malaysia, Mexico, the Philippines, Singapore, Sweden, Taiwan and the
United Kingdom. Products manufactured by the Company outside of the United
States include faucets and accessory products, bath and shower enclosures,
furniture, decorative accessories, door locks and related hardware, ventilating
fans and equipment and submersible water pumps.

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The Company's foreign operations are subject to political, monetary,
economic and other risks attendant generally to international businesses. These
risks generally vary from country to country.

Financial information concerning the Company's foreign and domestic
operations, including the amounts of net sales, operating profit and assets
employed which are attributable to the Company's operations in the United States
and in foreign countries, as of and for the three years ended December 31, 1993,
is set forth in Item 8 of this Report in the Note to the Company's Consolidated
Financial Statements captioned "Segment Information." From 1991 through 1993,
the Company's annual net export sales from the United States to other countries,
as a percentage of consolidated annual net sales, approximated three percent.

EQUITY INVESTMENTS

In 1984, Masco transferred its industrial businesses to a newly-formed
subsidiary, MascoTech, Inc. (formerly Masco Industries, Inc.), which became a
separate public company in July, 1984 when Masco distributed to its stockholders
shares of MascoTech common stock as a special dividend. Masco currently owns
approximately 42 percent of the outstanding common stock of MascoTech.

MascoTech is a diversified manufacturer of original equipment and
aftermarket parts for the transportation industry and also manufactures
commercial, institutional and residential building products for the construction
industry as well as other diversified products principally for the defense
industry. In 1993, MascoTech had sales from continuing operations of $1.58
billion.

MascoTech manufactures a broad range of semi-finished components,
sub-assemblies and assemblies for the transportation industry.
Transportation-related products represented 76 percent of MascoTech's 1993 sales
from continuing operations and primarily consist of original equipment products
for the automotive and truck industries. Over half of MascoTech's products are
used for engine and drivetrain applications (such as semi-finished transmission
shafts, drive gears, engine connecting rods, wheel spindles and front wheel
drive and exhaust system components) and for chassis and suspension functions
(including electromechanical solenoids and relays and suspension components).
Products manufactured for exterior body trim applications include automotive
trim, luggage racks and accessories, and metal stampings. Aftermarket products
include fuel and emission systems components, windshield wiper blades,
constant-velocity joints, brake hardware repair kits, and luggage racks and
accessories. In addition to its manufacturing activities, MascoTech provides
engineering services primarily for the automotive and heavy-duty truck
industries, and is engaged in specialty vehicle development and conversion
programs. Products are manufactured using various metalworking technologies,
including cold, warm and hot forming, powdered metal forming and stamping.
During 1993, sales to various divisions and subsidiaries of Ford Motor Company,
General Motors Corporation and Chrysler Corporation accounted for approximately
20 percent, 14 percent and 12 percent, respectively, of MascoTech's net sales
from continuing operations.

Specialty products manufactured by MascoTech include a variety of
architectural products for commercial, institutional and residential markets.
Products include steel doors and frames; stainable and low maintenance steel
doors; wood windows and aluminum-clad wood windows; leaded, etched and beveled
glass for decorative windows and entryways; residential entry systems; garage
doors; sectional and rolling doors; security grilles; and modular metal
partitions. MascoTech's sales of architectural products in 1993 were $289
million. MascoTech's other specialty products consist primarily of defense
products, including large diameter cold formed cartridge cases, projectiles and
casings for rocket motors and missiles for the United States government and its
suppliers. MascoTech also markets waste-water treatment services to other
industrial companies principally in southern California. MascoTech's sales in
1993 of these other specialty products were $99 million.

MascoTech has undertaken the planned disposition of its energy-related
business segment, which consisted of seven business units, as part of its
long-term strategic plan to de-leverage its balance sheet and increase the focus
on its core operating capabilities. As a result, MascoTech's financial
statements have been reclassified to present such businesses as discontinued
operations. These businesses

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manufactured specialized tools, equipment and other products for energy-related
industries. Two of the businesses were sold in late 1993, including one business
to TriMas Corporation, and MascoTech expects to divest the remaining businesses
in 1994. MascoTech financial information contained in this Report has been
reclassified for these discontinued operations.

MascoTech currently owns approximately 43 percent of the outstanding common
stock of TriMas Corporation, and the Company currently owns approximately 5
percent of the outstanding common stock of TriMas. TriMas is a diversified
proprietary products company with leadership positions in commercial, industrial
and consumer niche markets including industrial container closures, pressurized
gas cylinders, towing systems products, specialty fasteners, specialty products
for fiberglass insulation, specialty tapes, specialty industrial gaskets and
precision cutting tools.

PATENTS AND TRADEMARKS

The Company holds a number of United States and foreign patents covering
various design features and valve constructions used in certain of its faucets,
and also holds a number of other patents and patent applications, licenses,
trademarks and trade names. As a manufacturer of brand-name consumer products,
the Company views its trademarks as important, but does not believe that there
is any reasonable likelihood of a loss of such rights which would have a
material adverse effect on the Company's industry segments or its present
business as a whole.

COMPETITION

The major domestic and foreign markets for the Company's products in its
industry segments are highly competitive. Competition is based primarily on
performance, quality, style, service and price, with the relative importance of
such factors varying among products. A number of companies of varying size
compete with one or more of the Company's product lines.

EMPLOYEES

At December 31, 1993, the Company employed approximately 45,000 people.
Satisfactory relations have generally prevailed between the Company and its
employees.

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ITEM 2. PROPERTIES.

The following list includes the Company's principal manufacturing
facilities by location and the industry segments utilizing such facilities:

Arizona.................. Tucson (1)
California............... Carlsbad (1), City of Industry (2), Compton (2)(2), Corona (1),
Costa Mesa (1), Los Angeles (1)(1), Pico Rivera (1), Pomona (1),
Rosemead (2), South Gate (1), Vista (1) and Whittier (2)
Georgia.................. Atlanta (2)
Illinois................. Alsip (2) and Chicago (2)
Indiana.................. Cumberland (1), Greensburg (1) and Kendallville (1)
Iowa..................... Northwood (1)
Kentucky................. Henderson (1 and 2) and Morgantown (1)
Massachusetts............ Framingham (2)
Michigan................. Adrian (1), Hillsdale (1), Holland (2), Lapeer (1), Madison
Heights (1) and Riverview (1)
Minnesota................ Lakeville (1)
Mississippi.............. Blue Mountain (2), New Albany (2), Olive Branch (1) and
Ripley (2)(2)(2)
Nevada................... Las Vegas (1)
New Jersey............... Passaic (1)
North Carolina........... Black Mountain (2), Drexel (2), Goldsboro (2), Hickory (2)(2),
High Point (2)(2)(2), Hildebran (2)(2), Lexington
(2)(2)(2)(2)(2), Linwood (2), Longview (2), Marion (2)(2),
Mocksville (2), Morganton (2)(2)(2)(2)(2), Mt. Airy (2), Shelby
(2), Spruce Pine (2), Thomasville (1) and Whittier (2)
Ohio..................... Jackson (1), Loudonville (1) and Middlefield (1)(1)
Oklahoma................. Chickasha (1)
Oregon................... Klamath Falls (1)
Pennsylvania............. Aston (1), Hazelton (1), Reading (1 and 2) and Sunbury (2)
South Carolina........... Kingstree (2)
South Dakota............. Rapid City (1) and Sioux Falls (1)
Tennessee................ Adamsville (1)(1), LaFollette (1) and Morristown (2)(2)
Texas.................... Lancaster (1)
Virginia................. Atkins (1)(1), Culpeper (1), Lynchburg (1), Mt. Jackson (1) and
Portsmouth (2)
Belgium.................. Brussels (1)
Canada................... Burnaby (1), British Columbia; Brantford (2), Cambridge (1),
London (1),
Mississauga (2) and St. Thomas (1), Ontario; Montreal (1),
Quebec
China (P.R.C.)........... Guangzhou (2) and Tianjin (2)(2)(2)
Denmark.................. Odense (1)
France................... Seyres (1)
Germany.................. Bad Zwischenahn (1), Iserlohn (1), Steinhagen (1) Tangermunde (2)
and Waldenburg (1)
Hong Kong................ (2)(2)

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Italy.................... Zingonia (1)
Malaysia................. Johor (2) and Kedah (2)(2)
Mexico................... Mexicali (1)
Philippines.............. Cebu (2)(2)
Singapore................ Kranji (2)(2)
Sweden................... Gotegborg (2)
Taiwan................... Kaohshiung (2), Tao Yuan (2) and Tung Kang (2)
United Kingdom........... Silsden (2) and Warminster (2), England; Aberdare (2) and Merthyr
Tydfil (2), Wales

Note: Multiple footnotes within the same parenthesis indicate the
facility is engaged in activities relating to both segments. Multiple
footnotes to the same municipality denote separate facilities in that
location. Industry segments in the preceding table are identified as
follows: (1) Building and Home Improvement Products Segment, and (2) Home
Furnishings Products Segment.

The home furnishings products manufacturing facilities are located
primarily in North Carolina, with principal facilities ranging in size from
700,000 to 1,074,000 square feet. The two principal faucet manufacturing plants
are located in Greensburg, Indiana and Chickasha, Oklahoma. The faucet
manufacturing plants and the majority of the Company's other facilities range
from approximately 20,000 to 700,000 square feet. The Company owns most of its
manufacturing facilities and none of the properties is subject to significant
encumbrances. The Company also maintains approximately 1.5 million square feet
of designer and trade showroom space at various locations throughout the United
States where it coordinates the display and sale of its home furnishings
products and owns 725,000 square feet of showroom space in High Point, North
Carolina utilized for furniture industry trade shows. The Company's corporate
headquarters are located in Taylor, Michigan and are owned by the Company. An
additional building near its corporate headquarters is used by the Company's
corporate research and development department.

The Company's buildings, machinery and equipment have been generally well
maintained, are in good operating condition, and are adequate for current
production requirements.

The following list identifies the location of the principal manufacturing
facilities of MascoTech and the industry segments utilizing such facilities:

Arizona.................Chandler (2)

California..............Santa Fe Springs (4), Vernon (3) and Yuba City (1)

Florida.................Auburndale (2), Deerfield Beach (1) and Orlando (2)

Georgia.................Adel (1), Lawrenceville (1) and Valdosta (1)

Indiana.................Kendallville (1)

Iowa....................Dubuque (2)

Kentucky................Nicholasville (1)

Michigan................Auburn Hills (1)(1), Brighton (1), Burton (1),
Coopersville (1), Detroit (1)(1)(1), Farmington Hills
(1), Fraser (1), Green Oak Township (1 and 3),
Hamburg (1 and 3), Holland (1), Livonia (1), Mesick
(1), Mt. Clemens (1), Oxford (1)(1)(1), Port Huron
(1), Redford (1), Roseville (1), Royal Oak (1),
Shelby Township (1), St. Clair (1), St. Clair Shores
(1), Sterling Heights (1), Traverse City
(1)(1)(1)(1)(1), Troy (1)(1), Warren (1)(1), West
Branch (2) and Ypsilanti (1)

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Mississippi.............Nesbit (2)

New York................Brooklyn (2) and Maspeth (2)

Ohio....................Blue Ash (2), Bluffton (1), Canal Fulton (1), Columbus
(2), Lima (1), Minerva (1), Perrysburg (2), Port
Clinton (1) and Upper Sandusky (1)

Oklahoma................Tulsa (4)

Pennsylvania............Ridgway (1)

Texas...................Bryan (4), Dallas (4), Greenville (4) and Houston
(4)(4)(4)

Virginia................Duffield (1)

Germany.................Riedstadt (2) and Zell am Harmersbach(1 and 3)

Italy...................Poggio Rusco (1)

United Kingdom..........Wednesfield, England (1)

Note: Multiple footnotes within the same parenthesis indicate the
facility is engaged in significant activities relating to more than one
segment. Multiple footnotes to the same municipality denote separate
facilities in that location. Industry segments in the preceding table are
identified as follows: (1) transportation-related products; (2) specialty
products -- architectural; (3) specialty products -- other; and (4)
discontinued operations.

MascoTech's largest manufacturing facility is located in Vernon, California
and is a multi-plant facility of approximately 920,000 square feet. MascoTech
owns the largest plant, comprising approximately 540,000 square feet, and
operates the remaining portions of this facility under leases, the earliest of
which expires at the end of 1994. Except for the foregoing facility and an
additional manufacturing facility covering approximately 605,000 square feet,
MascoTech's manufacturing facilities range in size from approximately 25,000 to
325,000 square feet, are owned by MascoTech or leased and are not subject to
significant encumbrances. MascoTech's executive offices are located in Taylor,
Michigan, and are provided by the Company to MascoTech under a corporate
services agreement.

MascoTech's buildings, machinery and equipment have been generally well
maintained, are in good operating condition, and are adequate for current
production requirements.

ITEM 3. LEGAL PROCEEDINGS.

Between 1982 and 1989, subsidiaries of the Company sold plastic plumbing
fittings used to connect plastic pipes for water supply systems in residential
construction. A small percentage of these fittings have experienced leaks which
the Company believes are caused by deficiencies in the resin supplied to its
subsidiaries by E.I. du Pont de Nemours and Company. The Company's policy has
been to repair any leaks which have been reported and, as a result, the Company
has not experienced litigation of any consequence arising from this situation.
Based on the terms of a recent settlement of litigation previously instituted by
the Company against du Pont, the Company does not believe that these matters
will result in any future material adverse effect on the Company's financial
position.

Civil suits were filed in December 1992 in a California state court by the
California Attorney General, the Natural Resources Defense Counsel and the
Environmental Law Foundation against a subsidiary of the Company and
approximately 15 other manufacturers or distributors of faucets sold in that
state. The suits principally allege that brass faucets unlawfully leach lead
into tap water and that the defendants have failed to provide clear and
reasonable warnings in violation of California law. The plaintiffs have
requested, among other things, that the defendants be enjoined from selling
products in California that leach lead into tap water, be ordered to offer
restitution to California purchasers of defendants' products, and pay
unspecified compensatory and punitive damages. Based upon the Company's present
knowledge and subject to future legal and factual developments, the Company

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does not believe that these suits will result in any material adverse effect on
the Company's financial position.

The Company is subject to other claims and litigation in the ordinary
course of business, but does not believe that any such claim or litigation will
have a material adverse effect on its consolidated financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

SUPPLEMENTARY ITEM. EXECUTIVE OFFICERS OF REGISTRANT (PURSUANT TO INSTRUCTION 3
TO ITEM 401(B) OF REGULATIONS S-K).

OFFICER
NAME POSITION AGE SINCE
- ------------------------------- ---------------------------------------------- ---- -------

Alex Manoogian................. Chairman Emeritus 92 1929
Richard A. Manoogian........... Chairman of the Board and Chief Executive 57 1962
Officer
Wayne B. Lyon.................. President and Chief Operating Officer 61 1972
Gerald Bright.................. Vice President and Assistant Secretary 71 1970
David A. Doran................. Vice President -- Taxes 52 1984
Eugene A. Gargaro, Jr.......... Vice President and Secretary 51 1993
Ronald L. Jones................ President -- Home Furnishings Products 51 1989
Raymond F. Kennedy............. President -- Building Products 51 1989
John R. Leekley................ Vice President and General Counsel 50 1979
Richard G. Mosteller........... Senior Vice President -- Finance 61 1962
John C. Nicholls, Jr........... Treasurer 60 1967
Robert B. Rosowski............. Vice President -- Controller 53 1973
Samuel Valenti, III............ Vice President -- Investments 48 1971
David G. Wesenberg............. Vice President -- Human Resources 63 1980

Executive officers who are elected by the Board of Directors serve for a
term of one year or less. Each executive officer has been employed in a
managerial capacity with the Company for over five years except for Mr. Gargaro.
Richard A. Manoogian, the Chairman of the Board and Chief Executive Officer of
the Company, is the son of its Chairman Emeritus, Alex Manoogian.

Mr. Gargaro joined the Company as its Vice President and Secretary on
October 1, 1993. Prior to joining the Company, Mr. Gargaro was a partner at the
Detroit law firm of Dykema Gossett PLLC. Mr. Gargaro has served as a director
and Secretary of MascoTech, Inc., since 1984 and a director and Secretary of
TriMas Corporation since 1989.

10
12

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The New York Stock Exchange is the principal market on which the Company's
Common Stock is traded. The following table indicates the high and low sales
prices of the Company's Common Stock as reported on the New York Stock Exchange
Composite Tape and the cash dividends declared per share for the periods
indicated:

MARKET PRICE
------------- DIVIDENDS
QUARTER HIGH LOW DECLARED
------------------------------------------------- ---- ---- ---------

1992
First.......................................... $28 7/8 $22 7/8 $ .15
Second......................................... 29 7/8 24 1/8 .15
Third.......................................... 27 5/8 24 3/8 .16
Fourth......................................... 30 22 .16
---------
Total....................................... $ .62
---------
---------
1993
First.......................................... $35 1/4 $ 29 $ .16
Second......................................... 34 3/4 28 5/8 .16
Third.......................................... 32 1/4 25 1/2 .17
Fourth......................................... 38 7/8 28 3/4 .17
---------
Total....................................... $ .66
---------
---------

On March 15, 1994, there were approximately 8,200 holders of record of the
Company's Common Stock.

The Company expects that its practice of paying quarterly dividends on its
Common Stock will continue, although future dividends will continue to depend
upon the Company's earnings, capital requirements, financial condition and other
factors.

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth summary consolidated financial information
of the Company, for the years and dates indicated:

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------

Net sales.......................... $3,886,000 $3,525,000 $3,141,000 $3,209,000 $3,150,500
Net income......................... $ 221,100 $ 183,100 $ 44,900 $ 138,800 $ 220,900
Per share of common stock:
Net income....................... $1.45 $1.21 $.30 $.91 $1.42
Dividends declared............... $.66 $.62 $.58 $.55 $.51
Dividends paid................... $.65 $.61 $.57 $.54 $.50
As at December 31:
Total assets..................... $4,021,060 $3,986,560 $3,785,810 $3,760,740 $3,640,780
Long-term debt................... $1,418,290 $1,487,090 $1,369,290 $1,334,300 $1,153,190

11
13

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

CORPORATE DEVELOPMENT

While no major acquisitions occurred in 1993, acquisitions have
historically contributed significantly to Masco's long-term growth, even though
generally the initial impact on earnings is minimal after deducting
acquisition-related costs such as interest and added depreciation and
amortization. The important earnings benefit to Masco arises from subsequent
growth of acquired companies, since incremental sales are not handicapped by
these expenses.

PROFIT MARGINS

After-tax profit margins as a percent of net sales were 5.7 percent, 5.2
percent and 1.4 percent in 1993, 1992 and 1991, respectively. After-tax profit
return on shareholders' equity was 11.7 percent, 10.2 percent and 2.5 percent in
1993, 1992 and 1991, respectively.

The increased profit margins for 1993, compared with the previous two
years, were primarily the result of increased product sales resulting from
improved market shares and the modest economic recovery, as well as increased
income related to the Company's equity investments in MascoTech, Inc.

LIQUIDITY AND CAPITAL RESOURCES

At year-end 1993, current assets were approximately 3.4 times current
liabilities.

Over the years, the Company has funded its growth through a combination of
cash provided by operations and long-term bank and other borrowings.

During 1993, cash was provided by $261 million from operating activities,
$88 million from the sale of affiliate investments to MascoTech, $100 million
from the redemption of the MascoTech 10% exchangeable preferred stock and $23
million from other net cash inflows; cash decreased by $167 million for the
purchase of property and equipment, $131 million for a net decrease in debt and
$99 million for cash dividends paid. The aggregate of the preceding items
represents a net cash inflow of $75 million in 1993. Cash provided by operating
activities totalled $261 million, $204 million and $244 million in 1993, 1992
and 1991, respectively; the Company has generally reinvested a majority of these
funds in its operations.

During 1993, the Company issued $400 million of fixed rate debt securities,
with the proceeds being used to eliminate floating-rate borrowings under its
bank revolving-credit agreement.

The Company's anticipated internal cash flow is expected to provide
sufficient liquidity to fund its near-term working capital and other investment
needs. The Company believes that its longer-term working capital and other
general corporate requirements will be satisfied through its internal cash flow
and to the extent necessary in the financial markets.

RECEIVABLES AND INVENTORIES

During 1993, the Company's receivables increased by $43 million. This
increase is primarily the result of increased sales in the fourth quarter of
1993 compared with the same period in 1992.

During 1993, the Company's inventories increased by $39 million. As
compared with the average manufacturing company, the Company maintains a higher
investment in inventories, which relates to the Company's business strategies of
providing better customer service, establishing efficient production scheduling
and benefitting from larger, more cost-effective purchasing.

CAPITAL EXPENDITURES

Capital expenditures totalled $167 million in 1993, compared with $118
million in 1992. These amounts primarily pertain to expenditures for additional
facilities related to increased demand as well as for new Masco products.

12
14

The Company continues to invest in automating its manufacturing operations
and increasing its productivity, in order to be a more efficient producer and
improve customer service and response time.

Depreciation expense and amortization expense were $82.1 million and $33.9
million, respectively, in 1993, compared with $79.4 million and $35.1 million,
respectively, in 1992. This continued high level is primarily the result of
acquisitions and the Company's capital expenditures programs. The major portion
of amortization expense from the excess of cost over net assets acquired,
relates to companies acquired in 1986 and 1987. These companies have been
successful for many years in established markets not subject to rapid
technological changes. At each balance sheet date management assesses whether
there has been an impairment in the carrying value of excess of cost over net
assets of acquired companies by primarily comparing current and projected sales,
operating income and annual cash flows with the related annual amortization
expense.

EQUITY AND OTHER INVESTMENTS IN AFFILIATES

Equity earnings from affiliates were $18.7 million in 1993 compared with
equity earnings of $17.3 million in 1992 and equity loss of $12.6 million in
1991.

In March 1993, the Company and MascoTech, Inc., partially restructured
their affiliate relationships through transactions that reduced the Company's
common equity interest in MascoTech from 47 percent to approximately 35 percent
and resulted in MascoTech's acquisition of the Company's investments in Emco
Limited. The Company received $87.5 million in cash, $100 million of 10%
exchangeable preferred stock and seven-year warrants to purchase 10 million
common shares of MascoTech at $13 per share. MascoTech received 10 million of
its common shares, $77.5 million of its 12% exchangeable preferred stock, the
Company's investments in Emco Limited and a modified option expiring in 1997 to
require the Company to purchase up to $200 million aggregate amount of debt
securities of MascoTech.

In November 1993, MascoTech redeemed for cash its $100 million of 10%
exchangeable preferred stock issued in March 1993. As a result of this
redemption, the Company realized a $28.3 million pre-tax gain.

In December 1993, following MascoTech's call for redemption, the Company
converted the 6% debentures due 2011 into MascoTech common stock, thereby
increasing the Company's common equity interest in MascoTech from approximately
35 percent to 42 percent.

CASH DIVIDENDS

During 1993, the Company increased its dividend rate seven percent to $.17
per share quarterly. This marks the 35th consecutive year in which dividends
have been increased. Dividend payments over the last five years have increased
at an eight percent average annual rate. Although the Company is aware of the
greater interest in yield by many investors and has maintained an increased
dividend payout in recent years, the Company continues to believe that its
shareholders' long-term interests are best served by investing a significant
portion of its earnings in the future growth of the Company.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 112, Employers' Accounting
for Postemployment Benefits, became effective in January 1994. This Standard
specifies that the estimated cost of benefits provided by an employer to former
or inactive employees after employment but before retirement be accounted for on
an accrual basis. This Standard will not have a material impact on the Company's
financial statements.

Statement of Financial Accounting Standards No. 114, Accounting by
Creditors for Impairment of a Loan, becomes effective in January 1995. This
Standard addresses the accounting for impairment of a loan by specifying how
allowances for credit losses should be determined. This Standard will not have a
material impact on the Company's financial statements.

13
15

Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities, became effective in January 1994.
This Standard defines the accounting and reporting for all investments in debt
securities and for investments in equity securities that have readily
determinable fair values. This Standard will not have a material impact on the
Company's financial statements.

GENERAL FINANCIAL ANALYSIS

1993 VERSUS 1992

Net sales in 1993 increased 10 percent to $3,886 million. The sales
increase was primarily due to increased shipments of kitchen, bath and home
furnishings products. Cost of sales as a percentage of sales was 67.5 percent in
both 1993 and 1992. Selling, general and administrative expenses as a percentage
of sales decreased modestly to 22.1 percent in 1993 from 22.3 percent in 1992.
Operating profit increased 13 percent in 1993 from 1992.

The Company's Building and Home Improvement Products sales in 1993
increased 10 percent to $2,188 million while operating profit increased 12
percent to $412 million.

Sales in 1993 of the Company's Home Furnishings Products increased 11
percent to $1,698 million and operating profit increased 15 percent to $69
million.

Included in other income and expense for 1993 are equity earnings from
MascoTech, Inc. of $23.2 million, prior to an approximate $10 million after-tax
fourth quarter charge which reflects the Company's equity share of MascoTech's
loss provision for the disposition of its energy-related businesses and
extraordinary loss on the early extinguishment of debt, as compared with $12.6
million of equity earnings in 1992. MascoTech reported income from continuing
operations of $70.9 million and $39 million in 1993 and 1992, respectively, and
net income, after preferred stock dividends, of $32.7 million for 1993 and $29.1
million for 1992. The results of MascoTech were favorably impacted by internal
cost reductions and from increased demand in its transportation industries,
which more than offset its 1993 fourth quarter special charges of $26 million
after-tax.

Included in the fourth quarter of 1993 is a $28.3 million pre-tax gain
(approximately $18 million after-tax) on the redemption of MascoTech's 10%
exchangeable preferred stock. This gain was principally offset by the Company's
approximate $10 million after-tax equity share of MascoTech's above-mentioned
fourth quarter special charges, as well as by charges related to certain
restructurings of Company operations which should result in future cost savings.

The Company reported increases in net income and earnings per share of 21
percent and 20 percent, respectively, in 1993 as compared with 1992.

1992 VERSUS 1991

Net sales in 1992 increased 12 percent to $3,525 million. Cost of sales as
a percentage of sales decreased to 67.5 percent in 1992 from 70.2 percent in
1991. Selling, general and administrative expenses as a percentage of sales
increased to 22.3 percent in 1992 from 21.8 percent in 1991. The sales increase
was primarily due to increased shipments of kitchen, bath and home furnishings
products. The decrease in cost of sales as a percentage of sales resulted
primarily from profit improvement programs implemented in prior years having a
favorable impact on current earnings. The increase in selling, general and
administrative expenses as a percentage of sales was primarily due to increased
promotional and advertising costs. Operating profit increased 44 percent.

The Company's Building and Home Improvement Products sales in 1992
increased 16 percent while operating profit increased 35 percent.

Sales and operating profit in 1992 of the Company's Home Furnishings
Products increased 7 percent and 58 percent, respectively.

14
16

Included in other income and expense for 1992 are equity earnings from
MascoTech, Inc. of $12.6 million as compared with $9.2 million of equity loss in
1991. MascoTech reported net income, after preferred stock dividends, of $29.1
million for 1992, as compared with net loss, after preferred stock dividends, of
$18.6 million in 1991. The results of MascoTech were favorably impacted by
internal cost reduction and restructuring initiatives and from modest
improvement in the economy. Also, lower interest rates contributed to reduced
interest expense for 1992.

Included in other income and expense for 1991 is approximately $32 million
pre-tax of non-operating charges attributable to write-downs of the Company's
carrying value of investments in certain affiliated companies and other
long-term investments.

The Company reported increases in net income and earnings per share of 308
percent and 303 percent, respectively, in 1992 as compared with 1991.

15
17

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Shareholders of Masco Corporation:

We have audited the accompanying consolidated balance sheet of Masco
Corporation and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the three years in
the period ended December 31, 1993, and the financial statement schedules as
listed in Item 14(a)(2)(i) of this Form 10-K. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Masco
Corporation and subsidiaries as of December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993 in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedules referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material respects,
the information required to be included therein.

COOPERS & LYBRAND

Detroit, Michigan
February 24, 1994

16
18

MASCO CORPORATION

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1993 AND 1992

ASSETS 1993 1992
-------------- --------------

Current Assets:
Cash and cash investments................................... $ 119,980,000 $ 45,350,000
Marketable securities....................................... 4,890,000 8,970,000
Receivables................................................. 610,120,000 547,840,000
Inventories................................................. 824,130,000 781,700,000
Prepaid expenses............................................ 84,700,000 81,680,000
-------------- --------------
Total current assets................................... 1,643,820,000 1,465,540,000
Equity investments in MascoTech, Inc.......................... 294,700,000 246,940,000
Other investment in MascoTech, Inc............................ -- 130,000,000
Equity investments in other affiliates........................ 54,630,000 85,740,000
Property and equipment........................................ 1,095,170,000 1,030,530,000
Excess of cost over acquired net assets....................... 605,170,000 627,300,000
Other assets.................................................. 327,570,000 400,510,000
-------------- --------------
Total assets........................................... $4,021,060,000 $3,986,560,000
-------------- --------------
-------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable............................................... $ 33,160,000 $ 94,810,000
Accounts payable............................................ 161,220,000 133,210,000
Accrued liabilities......................................... 296,060,000 263,490,000
-------------- --------------
Total current liabilities.............................. 490,440,000 491,510,000
Long-term debt................................................ 1,418,290,000 1,487,090,000
Deferred income taxes and other............................... 113,900,000 121,080,000
-------------- --------------
Total liabilities...................................... 2,022,630,000 2,099,680,000
-------------- --------------
Shareholders' Equity:
Common shares authorized: 400,000,000;
issued: 1993 -- 152,850,000; 1992 -- 152,470,000......... 152,850,000 152,470,000
Preferred shares authorized: 1,000,000...................... -- --
Paid-in capital............................................. 69,880,000 61,370,000
Retained earnings........................................... 1,805,170,000 1,685,010,000
Cumulative translation adjustments.......................... (29,470,000) (11,970,000)
-------------- --------------
Total shareholders' equity............................. 1,998,430,000 1,886,880,000
-------------- --------------
Total liabilities and shareholders' equity............. $4,021,060,000 $3,986,560,000
-------------- --------------
-------------- --------------

See notes to consolidated financial statements.

17
19

MASCO CORPORATION

CONSOLIDATED STATEMENT OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

1993 1992 1991
-------------- -------------- --------------

Net sales...................................... $3,886,000,000 $3,525,000,000 $3,141,000,000
Cost of sales.................................. 2,621,630,000 2,381,040,000 2,206,460,000
-------------- -------------- --------------
Gross profit............................ 1,264,370,000 1,143,960,000 934,540,000
Selling, general and administrative expenses... 860,540,000 785,420,000 686,210,000
-------------- -------------- --------------
Operating profit........................ 403,830,000 358,540,000 248,330,000
-------------- -------------- --------------
Other income (expense), net:
Re: MascoTech, Inc.:
Equity earnings (loss).................... 13,160,000 12,570,000 (9,170,000)
Interest and dividend income.............. 16,220,000 17,100,000 17,100,000
Gain from redemption of preferred stock... 28,300,000 -- --
Equity earnings (loss), other affiliates..... 5,580,000 4,720,000 (3,470,000)
Other, net................................... 1,330,000 12,510,000 (28,610,000)
Interest expense............................. (105,820,000) (100,640,000) (126,580,000)
-------------- -------------- --------------
(41,230,000) (53,740,000) (150,730,000)
-------------- -------------- --------------
Income before income taxes.............. 362,600,000 304,800,000 97,600,000
Income taxes................................... 141,500,000 121,700,000 52,700,000
-------------- -------------- --------------
Net income.............................. $ 221,100,000 $ 183,100,000 $ 44,900,000
-------------- -------------- --------------
-------------- -------------- --------------
Earnings per share............................. $1.45 $1.21 $.30
----- ----- ----
----- ----- ----

See notes to consolidated financial statements.

18
20

MASCO CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

1993 1992 1991
------------- ------------- -------------

CASH FLOWS FROM (FOR):
Operating Activities:
Net income.................................... $ 221,100,000 $ 183,100,000 $ 44,900,000
Depreciation and amortization................. 115,990,000 114,450,000 102,690,000
Equity (earnings) loss, net................... (13,800,000) (13,190,000) 38,090,000
Write-downs of long-term investments.......... -- -- 31,800,000
Deferred income taxes and other............... (8,500,000) 11,620,000 (3,550,000)
Gain from redemption of MascoTech preferred
stock, net of tax.......................... (17,550,000) -- --
------------- ------------- -------------
Total from earnings...................... 297,240,000 295,980,000 213,930,000
(Increase) in receivables..................... (42,520,000) (52,450,000) (13,180,000)
(Increase) decrease in inventories............ (38,840,000) (35,100,000) 17,560,000
Increase (decrease) in accounts payable and
accrued liabilities, net................... 45,050,000 (4,800,000) 25,310,000
------------- ------------- -------------
Net cash from operating activities....... 260,930,000 203,630,000 243,620,000
------------- ------------- -------------
Investing Activities:
Capital expenditures.......................... (166,540,000) (117,690,000) (112,990,000)
Currency translation adjustments.............. (17,500,000) (27,090,000) (15,820,000)
Sale of affiliate investments to MascoTech.... 87,500,000 -- --
Proceeds from redemption of MascoTech
preferred stock............................ 100,000,000 -- --
Acquisition of Masco Capital Corp............. -- -- (49,450,000)
Other, net.................................... 40,700,000 (63,380,000) (2,850,000)
------------- ------------- -------------
Net cash from (for) investing
activities............................ 44,160,000 (208,160,000) (181,110,000)
------------- ------------- -------------
Financing Activities:
Issuance of notes............................. 400,000,000 400,000,000 --
Retirement of notes........................... (200,000,000) (300,000,000) --
Issuance of Company common stock.............. -- -- 63,600,000
Increase in other debt........................ 290,770,000 460,470,000 449,690,000
Payment of other debt......................... (622,230,000) (480,000,000) (479,660,000)
Cash dividends paid........................... (99,000,000) (92,690,000) (85,150,000)
------------- ------------- -------------
Net cash (for) financing activities...... (230,460,000) (12,220,000) (51,520,000)
------------- ------------- -------------
Cash and Cash Investments:
Increase (decrease) for the year.............. 74,630,000 (16,750,000) 10,990,000
At January 1.................................. 45,350,000 62,100,000 51,110,000
------------- ------------- -------------
At December 31................................ $ 119,980,000 $ 45,350,000 $ 62,100,000
------------- ------------- -------------
------------- ------------- -------------

See notes to consolidated financial statements.

19
21

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES:

Principles of Consolidation. The consolidated financial statements include
the accounts of Masco Corporation and all majority-owned subsidiaries. All
significant intercompany transactions have been eliminated.

Average Shares Outstanding. The average number of common shares outstanding
in 1993, 1992 and 1991 approximated 152.7 million, 151.7 million and 149.9
million, respectively.

Cash and Cash Investments. The Company considers all highly liquid
investments with a maturity of three months or less to be cash and cash
investments.

Receivables. Accounts and notes receivable are presented net of allowances
for doubtful accounts of $19.1 million at December 31, 1993 and $16.3 million at
December 31, 1992.

Property and Equipment. Property and equipment, including significant
betterments to existing facilities, are recorded at cost. Upon retirement or
disposal, the cost and accumulated depreciation are removed from the accounts
and any gain or loss is included in income. Maintenance and repair costs are
charged to expense as incurred.

The excess of cost over net assets of acquired companies is being amortized
using the straight-line method over periods not exceeding 40 years; at December
31, 1993 and 1992, such accumulated amortization totalled $127.2 million and
$107.3 million, respectively. At each balance sheet date management assesses
whether there has been an impairment in the carrying value of excess of cost
over net assets of acquired companies primarily by comparing current and
projected sales, operating income and annual cash flows with the related annual
amortization expense. Purchase costs of patents are being amortized using the
straight-line method over their remaining lives. Amortization of intangible
assets was $33.9 million, $35.1 million and $32.5 million in 1993, 1992 and
1991, respectively.

Fair Value of Financial Instruments. The carrying value of financial
instruments reported in the balance sheet for current assets and current
liabilities approximates fair value. The fair value of financial instruments
that are carried as long-term investments (other than those accounted for by the
equity method) was based principally on quoted market prices for those or
similar investments or by discounting future cash flows using a discount rate
that approximates the risk of the investments. The fair value of the Company's
long-term debt instruments was based principally on quoted market prices for the
same or similar issues or the current rates offered to the Company for debt with
similar terms and remaining maturities. The aggregate market value of the
Company's long-term investments and long-term debt at December 31, 1993 was
approximately $230 million and $1,471 million, as compared with the Company's
carrying value of $200 million and $1,418 million, respectively. The aggregate
market value of the Company's long-term investments and long-term debt at
December 31, 1992 was approximately $530 million and $1,508 million, as compared
with the Company's carrying value of $537 million and $1,487 million,
respectively.

Recently Issued Professional Accounting Standards. Statement of Financial
Accounting Standards (SFAS) No. 112, Employers' Accounting for Postemployment
Benefits, SFAS No. 114, Accounting by Creditors for Impairment of a Loan and
SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities,
which become effective in 1994 and 1995, will not have a material impact on the
Company's financial statements.

20
22

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVENTORIES:

(IN THOUSANDS)
AT DECEMBER 31
--------------------
1993 1992
-------- --------

Finished goods........................................... $312,470 $300,820
Raw material............................................. 280,450 243,510
Work in process.......................................... 231,210 237,370
-------- --------
$824,130 $781,700
-------- --------
-------- --------

Inventories are stated at the lower of cost or net realizable value, with
cost determined principally by use of the first-in, first-out method.

EQUITY INVESTMENTS IN AFFILIATES:

Equity investments in affiliates consist primarily of the following equity
and partnership interests:

AT DECEMBER 31
--------------------
1993 1992 1991
---- ---- ----

MascoTech, Inc.............................................. 42% 47% 47%
Hans Grohe, a German partnership............................ 27% 27% 27%
TriMas Corporation.......................................... 5% 7% 8%
Emco Limited, a Canadian company............................ -- 44% 44%
Mechanical Technology Inc................................... -- -- 49%

Excluding the partnership interest in Hans Grohe, for which there is no
quoted market value, the aggregate market value of the Company's equity
investments at December 31, 1993 (which may differ from the amounts that could
then have been realized upon disposition), based upon quoted market prices at
that date, was $889 million, as compared with the Company's related aggregate
carrying value of $315 million.

The Company's carrying value in the common stock of MascoTech, Inc.
(formerly Masco Industries, Inc.) exceeds its equity in the underlying net book
value by approximately $63 million at December 31, 1993. This excess,
substantially all of which resulted from repurchases by MascoTech of its common
stock, is being amortized over a period not to exceed 40 years. The Company's
carrying value in the common stock of TriMas Corporation exceeds its equity in
the underlying net book value by approximately $8 million at December 31, 1993.
The Company's carrying value of its investment in Hans Grohe at December 31,
1993 approximates the Company's equity in the underlying net book value in this
affiliate.

In March 1993, the Company and MascoTech partially restructured their
affiliate relationships through transactions that reduced the Company's common
equity interest in MascoTech from 47 percent to approximately 35 percent and
resulted in MascoTech's acquisition of the Company's investments in Emco
Limited. The Company received $87.5 million in cash, $100 million of 10%
exchangeable preferred stock and seven-year warrants to purchase 10 million
common shares of MascoTech at $13 per share. MascoTech received 10 million of
its common shares, $77.5 million of its 12% exchangeable preferred stock, the
Company's investments in Emco Limited and a modified option expiring in 1997 to
require the Company to purchase up to $200 million aggregate amount of debt
securities in MascoTech.

21
23

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

EQUITY INVESTMENTS IN AFFILIATES (CONTINUED):
In December 1993, following MascoTech's call for redemption, the Company
converted the 6% debentures due 2011 into MascoTech common stock, thereby
increasing the Company's common equity interest in MascoTech from approximately
35 percent to 42 percent.

As part of the Company's efforts to de-emphasize equity investments, in
addition to its disposition of its investments in Emco Limited, in July 1992 the
Company sold its 49 percent equity interest in Mechanical Technology Inc. at
approximate carrying value.

Approximate combined condensed financial data of the above companies,
excluding data subsequent to 1991 of Emco Limited and Mechanical Technology Inc.
as to which the equity method was discontinued as of January 1, 1992, are
summarized in U.S. dollars as follows, in thousands:

1993 1992 1991
----------- ----------- -----------

At December 31:
Current assets........................ $ 846,780 $ 881,200 $ 1,190,160
Current liabilities................... (300,650) (371,350) (509,770)
----------- ----------- -----------
Working capital....................... 546,130 509,850 680,390
Property and equipment................ 720,290 755,290 882,530
Other assets.......................... 882,550 737,660 816,340
Long-term liabilities................. (1,213,940) (1,400,950) (1,810,060)
----------- ----------- -----------
Shareholders' equity.................. $ 935,030 $ 601,850 $ 569,200
----------- ----------- -----------
----------- ----------- -----------
Net sales............................... $ 2,230,330 $ 2,051,730 $ 2,706,880
----------- ----------- -----------
----------- ----------- -----------
Income (loss) from continuing
operations............................ $ 119,380 $ 56,690 $ (940)
----------- ----------- -----------
----------- ----------- -----------
Net income (loss) attributable to common
shareholders.......................... $ 96,090 $ 50,340 $ (2,070)
----------- ----------- -----------
----------- ----------- -----------
The Company's net equity in above income
(loss)................................ $ 18,740 $ 17,290 $ (12,640)
----------- ----------- -----------
----------- ----------- -----------
Cash dividends received by the Company
from affiliates....................... $ 4,940 $ 4,100 $ 25,450
----------- ----------- -----------
----------- ----------- -----------

Certain amounts for 1992 and 1991 have been restated to reflect MascoTech's
formal plan to divest its energy-related business segment.

Equity in undistributed earnings of affiliates of $132 million at December
31, 1993, $118 million at December 31, 1992 and $105 million at December 31,
1991 are included in consolidated retained earnings.

OTHER INVESTMENT IN MASCOTECH, INC.:

(IN THOUSANDS)
AT DECEMBER 31
--------------------
1993 1992
-------- --------

Convertible debentures, 6%, due 2011..................... -- $130,000
-------- --------
-------- --------

In December 1993, following MascoTech's call for redemption, the Company
converted the 6% debentures into MascoTech common stock at $18 per share.

22
24

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY AND EQUIPMENT:

(IN THOUSANDS)
AT DECEMBER 31
------------------------
1993 1992
---------- ----------

Land and improvements................................. $ 78,670 $ 77,080
Buildings............................................. 595,630 574,960
Machinery and equipment............................... 1,009,060 901,960
---------- ----------
1,683,360 1,554,000
Less accumulated depreciation......................... 588,190 523,470
---------- ----------
$1,095,170 $1,030,530
---------- ----------
---------- ----------

ACCRUED LIABILITIES:

(IN THOUSANDS)
AT DECEMBER 31
-----------------------
1993 1992
-------- --------

Salaries, wages and commissions....................... $ 60,910 $ 61,520
Insurance............................................. 35,180 31,010
Advertising and sales promotion....................... 32,370 26,260
Dividends payable..................................... 26,260 24,330
Income taxes.......................................... 26,110 17,820
Interest.............................................. 26,070 24,480
Employee retirement plans and other................... 89,160 78,070
-------- --------
$296,060 $263,490
-------- --------
-------- --------

LONG-TERM DEBT:

(IN THOUSANDS)
AT DECEMBER 31
------------------------
1993 1992
---------- ----------

Notes, 6.25%, due 1995............................... $ 200,000 $ 200,000
Notes, 8.75%, due 1996............................... -- 200,000
Notes, 9%, due 1996............................... 250,000 250,000
Notes, 6.625%, due 1999............................... 200,000 200,000
Notes, 9%, due 2001............................... 175,000 175,000
Notes, 6.125%, due 2003............................... 200,000 --
Notes, 7.125%, due 2013............................... 200,000 --
Notes payable to banks................................ -- 260,000
Convertible subordinated debentures, 5.25%, due
2012................................................ 177,930 177,930
Other................................................. 23,980 28,750
---------- ----------
1,426,910 1,491,680
Less current portion.................................. 8,620 4,590
---------- ----------
$1,418,290 $1,487,090
---------- ----------
---------- ----------

At December 31, 1993, all of the outstanding notes above are nonredeemable.

In March 1993, the $200 million of 8.75% notes due 1996 were redeemed at
par with borrowings under the Company's bank revolving-credit agreement.

23
25

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

LONG-TERM DEBT (CONTINUED):

In August 1993, the Company issued $200 million of 7.125% notes due August
15, 2013. In September 1993, the Company issued $200 million of 6.125% notes due
September 15, 2003. The proceeds from these financings were used to eliminate
floating-rate borrowings under the Company's bank revolving-credit agreement.

In June 1992, the Company issued $200 million of 6.25% notes due June 15,
1995. In September 1992, the Company issued $200 million of 6.625% notes due
September 15, 1999. The proceeds from these financings were used to reduce
outstanding bank indebtedness.

The 5.25% subordinated debentures due February 15, 2012 are convertible
into common stock at $42.28 per share.

The notes payable to banks at December 31, 1992 relate to a $750 million
revolving-credit agreement, with any outstanding balance due and payable in
November 1995. Interest is payable on borrowings under this agreement based upon
various floating rates as selected by the Company.

Certain debt agreements contain limitations on additional borrowings and
restrictions on cash dividend payments and common share repurchases. At December
31, 1993, the amount of retained earnings available for cash dividends and
common share repurchases approximated $242 million under the most restrictive of
these provisions.

At December 31, 1993, the maturities of long-term debt during the next five
years were approximately as follows: 1994-$8.6 million; 1995-$204.1 million;
1996-$256.9 million; 1997-$1.1 million; and 1998-$1.0 million.

At December 31, 1993, the Company had shelf registration statements on file
with the Securities and Exchange Commission for up to $200 million of debt
securities as well as up to 9.6 million shares of its common stock.

Interest paid was approximately $104 million, $121 million and $127 million
in 1993, 1992 and 1991, respectively.

24
26

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SHAREHOLDERS' EQUITY:

(IN THOUSANDS)
1993 1992 1991
---------- ---------- ----------

Common Shares, $1 Par Value
Balance, January 1....................... $ 152,470 $ 153,210 $ 149,960
Shares issued............................ 380 1,470 3,250
Shares retired........................... -- (2,210) --
---------- ---------- ----------
Balance, December 31..................... 152,850 152,470 153,210
---------- ---------- ----------
Paid-In Capital
Balance, January 1....................... 61,370 64,950 --
Common shares issued..................... 8,510 25,050 64,950
Common shares retired.................... -- (28,630) --
---------- ---------- ----------
Balance, December 31..................... 69,880 61,370 64,950
---------- ---------- ----------
Retained Earnings
Balance, January 1....................... 1,685,010 1,596,180 1,638,390
Net income............................... 221,100 183,100 44,900
Cash dividends declared.................. (100,940) (94,270) (87,110)
---------- ---------- ----------
Balance, December 31..................... 1,805,170 1,685,010 1,596,180
---------- ---------- ----------
Cumulative Translation Adjustments
Balance, December 31..................... (29,470) (11,970) 15,120
---------- ---------- ----------
Treasury Shares Related to Merger
Balance, January 1....................... -- (30,550) (30,550)
Shares repurchased....................... -- (290) --
Shares retired........................... -- 30,840 --
---------- ---------- ----------
Balance, December 31..................... -- -- (30,550)
---------- ---------- ----------
Shareholders' Equity
Balance, December 31..................... $1,998,430 $1,886,880 $1,798,910
---------- ---------- ----------
---------- ---------- ----------

In April 1991, the Company issued 3 million shares of its common stock for
approximately $64 million. The proceeds from this offering were used to reduce
outstanding bank indebtedness.

On the basis of amounts paid (declared), cash dividends per share were $.65
($.66) in 1993, $.61 ($.62) in 1992 and $.57 ($.58) in 1991.

25
27

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STOCK OPTIONS AND AWARDS:

For the three years ended December 31, 1993, stock option data pertaining
to stock option plans for key employees of the Company and affiliated companies
are as follows:

1993 1992 1991
--------- --------- ---------

Option shares outstanding, January 1.......... 6,742,000 7,390,000 3,817,000
Option shares granted......................... 298,000 1,212,000 3,735,000
Option price................................ $27-$37 $25-$30 $21
Option shares exercised....................... 1,210,000 1,860,000 142,000
Option price................................ $2-$30 $2-$21 $2-$18
Option shares cancelled....................... 144,000 -- 20,000
Option price................................ $2-$21 -- $17-$21
Option shares outstanding, December 31........ 5,686,000 6,742,000 7,390,000
Option price................................ $10-$37 $2-$30 $2-$25
Option shares exercisable, December 31........ 1,457,000 1,326,000 2,076,000

Pursuant to restricted stock incentive plans, the Company granted long-term
incentive awards, net, for 100,000, 267,000 and 36,000 shares of common stock
during 1993, 1992 and 1991, respectively, to key employees of the Company and
affiliated companies. The unamortized costs of unvested awards under these
plans, aggregating approximately $47 million at December 31, 1993, are being
amortized over the ten-year vesting periods.

At December 31, 1993, a combined total of 10,595,000 shares of common stock
was available for the granting of stock options and incentive awards under the
above plans.

Pursuant to the 1984 Restricted Stock (MascoTech) Incentive Plan, the
Company may award to key employees of the Company and affiliated companies,
shares of common stock of MascoTech, Inc. held by the Company. No such awards
were granted in 1993, 1992 or 1991. At December 31, 1993, there were 4,694,000
of such shares available for granting future awards under this plan.

26
28

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

EMPLOYEE RETIREMENT PLANS:

The Company sponsors defined-benefit pension plans for most of its
employees. In addition, substantially all salaried employees participate in
noncontributory profit-sharing plans, to which payments are determined annually
by the Directors. Aggregate charges to income under the pension and
profit-sharing plans were $19.2 million in 1993, $16.9 million in 1992 and $15.9
million in 1991. At December 31, 1993, the combined assets of the Company's
defined-benefit pension plans exceed the combined accumulated benefit
obligation.

Net periodic pension cost for the Company's pension plans includes the
following components:

(IN THOUSANDS)
1993 1992 1991
-------- -------- --------

Service cost -- benefits earned during the $ 11,800 $ 10,850 $ 10,590
year..........................................
Interest cost on projected benefit obligation... 17,240 15,280 14,820
Actual return on assets......................... (28,940) (12,190) (25,470)
Net amortization and deferral................... 6,100 (9,810) 6,080
-------- -------- --------
Net periodic pension cost....................... $ 6,200 $ 4,130 $ 6,020
-------- -------- --------
-------- -------- --------

Major assumptions used in accounting for the Company's pension plans are as
follows:

1993 1992 1991
------ ----- ------

Discount rate for obligations........................ 7.25% 8.0% 8.25%
Rate of increase in compensation levels.............. 5.0 % 6.0% 5.75%
Expected long-term rate of return on plan assets..... 13.0 % 13.0% 12.75%

The funded status of the Company's pension plans at December 31, is
summarized as follows, in thousands:

1993 1992
-------------------------- --------------------------
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
----------- ----------- ----------- -----------

Actuarial present value of
benefit obligations:
Vested benefit
obligation............. $ 135,800 $ 54,130 $ 115,900 $33,890
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Accumulated benefit
obligation............. $ 142,110 $ 62,660 $ 122,500 $38,450
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Projected benefit
obligation............. $ 181,850 $ 68,420 $ 160,040 $41,960
Assets at fair value.......... 158,630 47,790 150,650 32,190
----------- ----------- ----------- -----------
Projected benefit obligation
in excess of plan
assets................... (23,220) (20,630) (9,390) (9,770)
Reconciling items:
Unrecognized net loss....... 22,780 13,720 10,070 2,420
Unrecognized prior service
cost..................... 8,680 1,240 11,870 2,600
Unrecognized net (asset)
obligation at
transition............... (12,800) 1,400 (14,890) 2,300
Requirement to recognize
minimum liability........ -- (11,170) -- (5,060)
----------- ----------- ----------- -----------
Accrued pension cost........ $ (4,560) $ (15,440) $ (2,340) $(7,510)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

In January 1993, Statement of Financial Accounting Standards No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions, became
effective. The Company sponsors certain postretirement benefit plans that
provide medical, dental and life insurance coverage for eligible retirees and
dependents in the United States based on age and length of service. At December
31, 1993, the aggregate present value of the accumulated postretirement benefit
obligation approximated $10 million pre-tax and is being amortized over 20
years.

27
29

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SEGMENT INFORMATION:

The Company's operations in the industry segments detailed below consisted
of the manufacture and sale principally of the following products:

Building and home improvement -- faucets; plumbing fittings; kitchen and
bath cabinets; showertubs, whirlpools and spas; kitchen appliances;
builders' hardware; venting and ventilating equipment; and water pumps.

Home furnishings products -- quality furniture, fabrics and other home
furnishings products.

Corporate assets consisted primarily of cash, real property and other
investments.

Pursuant to a corporate services agreement to provide MascoTech, Inc. with
certain corporate staff and administrative services, the Company charges a fee
approximating .8 percent of MascoTech net sales. This fee approximated $11
million in each of 1993, 1992 and 1991 and is included as a reduction of general
corporate expense.

(IN THOUSANDS)
NET SALES OPERATING PROFIT ASSETS AT DECEMBER 31
------------------------------------ ------------------------------- ------------------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
---------- ---------- ---------- -------- -------- --------- ---------- ---------- ----------

The Company's
operations by
segment were:
Building and
home
improvement... $2,188,000 $1,991,000 $1,711,000 $412,000 $368,000 $ 273,000 $1,297,000 $1,262,000 $1,171,000
Home
furnishings
products.... 1,698,000 1,534,000 1,430,000 69,000 60,000 38,000 1,886,000 1,778,000 1,661,000
---------- ---------- ---------- -------- -------- --------- ---------- ---------- ----------
Total..... $3,886,000 $3,525,000 $3,141,000 $481,000 $428,000 $ 311,000 $3,183,000 $3,040,000 $2,832,000
---------- ---------- ---------- -------- -------- --------- ---------- ---------- ----------
---------- ---------- ---------- -------- -------- --------- ---------- ---------- ----------
The Company's
operations by
geographic area
were:
United
States...... $3,194,000 $2,895,000 $2,610,000 $387,000 $334,000 $ 232,000 $2,638,000 $2,522,000 $2,363,000
European
Community... 375,000 378,000 327,000 60,000 64,000 48,000 240,000 245,000 242,000
Other foreign
countries... 317,000 252,000 204,000 34,000 30,000 31,000 305,000 273,000 227,000
---------- ---------- ---------- -------- -------- --------- ---------- ---------- ----------
Total, as
above... $3,886,000 $3,525,000 $3,141,000 481,000 428,000 311,000 3,183,000 3,040,000 2,832,000
---------- ---------- ----------
---------- ---------- ----------
Other expense,
net............. (41,000) (54,000) (151,000)
General corporate
expense, net.... (77,000) (69,000) (62,000)
-------- -------- ---------
Income before
income
taxes(1)........ $363,000 $305,000 $ 98,000
-------- -------- ---------
-------- -------- ---------
Equity and other
investments
in affiliates... 349,000 463,000 448,000
Corporate
assets.......... 489,000 484,000 506,000
---------- ---------- ----------
Total
assets... $4,021,000 $3,987,000 $3,786,000
---------- ---------- ----------
---------- ---------- ----------

DEPRECIATION AND
PROPERTY ADDITIONS AMORTIZATION
------------------------------------ -------------------------------
1993 1992 1991 1993 1992 1991
---------- ---------- ---------- -------- -------- ---------

The Company's
operations by
segment were:
Building and
home
improvement... $ 80,000 $ 80,000 $ 62,000 $ 48,000 $ 48,000 $ 42,000
Home
furnishings
products.... 71,000 35,000 38,000 46,000 45,000 43,000
---------- ---------- ---------- -------- -------- ---------
Total..... $ 151,000 $ 115,000 $ 100,000 $ 94,000 $ 93,000 $ 85,000
---------- ---------- ---------- -------- -------- ---------
---------- ---------- ---------- -------- -------- ---------

(1) Income before income taxes and net income from foreign operations
for 1993, 1992 and 1991 were $92 million and $55 million, $88
million and $54 million, and $72 million and $43 million,
respectively.

28
30

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER INCOME (EXPENSE), NET:

(IN THOUSANDS)
1993 1992 1991
--------- --------- ---------

Re: MascoTech, Inc.:
Equity earnings (loss)..................... $ 13,160 $ 12,570 $ (9,170)
--------- --------- ---------
Interest and dividend income............... 16,220 17,100 17,100
--------- --------- ---------
Gain from redemption of preferred stock.... 28,300 -- --
--------- --------- ---------
Equity earnings (loss), other affiliates..... 5,580 4,720 (3,470)
--------- --------- ---------
Other, net:
Income from cash and marketable
securities.............................. 3,250 4,330 4,100
Other interest income...................... 9,800 11,640 14,390
Other items................................ (11,720) (3,460) (47,100)
--------- --------- ---------
1,330 12,510 (28,610)
--------- --------- ---------
Interest expense............................. (105,820) (100,640) (126,580)
--------- --------- ---------
$ (41,230) $ (53,740) $(150,730)
--------- --------- ---------
--------- --------- ---------

Other items in 1991 include write-downs aggregating approximately $32
million pre-tax in the Company's long-term investments.

29
31

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES:

(IN THOUSANDS)
1993 1992 1991
-------- -------- --------

Income before income taxes:
Domestic...................................... $270,930 $216,460 $ 25,910
Foreign....................................... 91,670 88,340 71,690
-------- -------- --------
$362,600 $304,800 $ 97,600
-------- -------- --------
-------- -------- --------
Provision for income taxes:
Currently payable:
Federal.................................... $ 96,830 $ 62,360 $ 25,690
State and local............................ 13,530 12,500 8,660
Foreign.................................... 39,640 35,220 25,800
Deferred:
Federal, net............................... (5,570) 12,090 (10,740)
Foreign.................................... (2,930) (470) 3,290
-------- -------- --------
$141,500 $121,700 $ 52,700
-------- -------- --------
-------- -------- --------
Deferred tax assets at December 31:
Inventories................................... $ 12,080
Earlier recognition of expenses for financial
reporting purposes......................... 44,570
Other......................................... 1,550
--------
58,200
--------
Deferred tax liabilities at December 31:
Property and equipment........................ 145,880
Other......................................... 9,240
--------
155,120
--------
Net deferred tax liability at December
31....................................... $ 96,920
--------
--------
Provision for deferred income taxes for
temporary differences:
Accelerated tax deductions, including
depreciation............................... $ 900 $ 3,990 $ 8,760
Earlier recognition of gains and losses, net
for financial reporting purposes........... (9,400) 7,630 (16,210)
-------- -------- --------
$ (8,500) $ 11,620 $ (7,450)
-------- -------- --------
-------- -------- --------

The effective tax rate differs from the United States federal statutory
rate principally due to: equity earnings (1 percent in 1992 and -7 percent in
1991), higher tax rate applicable to foreign earnings (-1 percent in 1993, -2
percent in 1992 and -5 percent in 1991), amortization in excess of tax, net (-1
percent in 1993, -2 percent in 1992 and -6 percent in 1991), dividends-received
deduction (1 percent in 1993 and 1992 and 2 percent in 1991), state income tax
and other (-2 percent in 1993 and -4 percent in 1992 and 1991), and -1 percent
in 1993 to record the effect on deferred tax liabilities caused by the increase
in the tax rate from 34 percent to 35 percent.

Income taxes paid were approximately $135 million, $97 million and $54
million in 1993, 1992 and 1991, respectively.

Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which requires the use of an asset and liability method of accounting for
income taxes, became effective in January 1993. Deferred income taxes result
from temporary differences between the tax basis of assets

30
32

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES (CONTINUED):

and liabilities and the related basis as reported in the consolidated financial
statements. Prior to 1993, the Company followed the requirements of Statement of
Financial Accounting Standards No. 96, Accounting for Income Taxes.

COMBINED FINANCIAL STATEMENTS (UNAUDITED):

The following presents the combined financial statements of the Company,
MascoTech, Inc. (formerly Masco Industries, Inc.), and TriMas Corporation as one
entity, with Masco Corporation as the parent company. Certain amounts for 1992
and 1991 have been restated to reflect MascoTech's formal plan to divest its
energy-related business segment. Intercompany transactions have been eliminated.
Amounts, except earnings per share, are in thousands.

AT DECEMBER 31
------------------------
1993 1992
---------- ----------

COMBINED BALANCE SHEET
Assets
Current assets:
Cash and cash investments........................... $ 272,950 $ 186,120
Marketable securities............................... 32,680 42,190
Receivables......................................... 906,500 857,550
Prepaid expenses.................................... 118,700 104,720
Deferred income taxes............................... 41,780 13,990
Inventories:
Finished goods................................... 393,820 414,270
Raw material..................................... 365,370 351,570
Work in process.................................. 281,680 298,940
---------- ----------
1,040,870 1,064,780
---------- ----------
Total current assets........................... 2,413,480 2,269,350
Equity investments in affiliates...................... 163,970 124,570
Property and equipment................................ 1,747,590 1,712,840
Excess of cost over acquired net assets............... 1,114,740 1,217,010
Net assets of discontinued operations................. 67,510 --
Other assets.......................................... 428,390 537,420
---------- ----------
Total assets................................... $5,935,680 $5,861,190
---------- ----------
---------- ----------
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable....................................... $ 36,310 $ 159,350
Accounts payable.................................... 277,070 253,680
Accrued liabilities................................. 428,720 403,510
---------- ----------
Total current liabilities...................... 742,100 816,540
Long-term debt........................................ 2,445,540 2,600,970
Deferred income taxes and other....................... 275,400 315,300
Other interests in combined affiliates................ 474,210 241,500
---------- ----------
Total liabilities.............................. 3,937,250 3,974,310
Equity of shareholders of Masco Corporation........... 1,998,430 1,886,880
---------- ----------
Total liabilities and shareholders' equity..... $5,935,680 $5,861,190
---------- ----------
---------- ----------

31
33

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

YEARS ENDED DECEMBER 31
-----------------------------------------
1993 1992 1991
----------- ----------- -----------

COMBINED STATEMENT OF INCOME
Net sales............................... $ 5,901,060 $ 5,360,330 $ 4,741,240
Cost of sales........................... (4,169,190) (3,797,980) (3,486,760)
Selling, general and administrative
expenses.............................. (1,112,300) (1,033,350) (916,670)
----------- ----------- -----------
Operating profit................. 619,570 529,000 337,810
----------- ----------- -----------
Other income (expense), net:
Interest expense...................... (189,610) (188,230) (259,520)
Other, net............................ 45,360 45,040 31,150
----------- ----------- -----------
(144,250) (143,190) (228,370)
----------- ----------- -----------
Income before income taxes and
other interests............... 475,320 385,810 109,440
Income taxes............................ 208,930 172,610 68,870
Other interests in combined
affiliates............................ 45,290 30,100 (4,330)
----------- ----------- -----------
Net income....................... $ 221,100 $ 183,100 $ 44,900
----------- ----------- -----------
----------- ----------- -----------
Earnings per share...................... $1.45 $1.21 $.30
----- ----- ----
----- ----- ----

32
34

MASCO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

YEARS ENDED DECEMBER 31
-------------------------------------
1993 1992 1991
----------- --------- ---------

COMBINED STATEMENT OF CASH FLOWS
Cash Flows From (For) Operating Activities:
Net income............................... $ 221,100 $ 183,100 $ 44,900
Depreciation and amortization............ 194,270 191,290 175,740
Equity (earnings) loss, net of
dividends............................. (4,840) (1,140) 18,530
Gain from change in investment........... (9,490) (16,700) --
Write-downs of long-term investments..... -- -- 31,800
Deferred income taxes and other.......... 7,590 15,860 1,980
Gain on sales of assets, net............. -- -- (21,500)
Other interests in net income (loss) of
combined affiliates, net.............. 45,290 30,100 (4,330)
----------- --------- ---------
Total from earnings................. 453,920 402,510 247,120
(Increase) in receivables................ (52,670) (75,340) (5,330)
(Increase) decrease in inventories....... (49,950) (36,550) 44,780
Increase (decrease) in accounts payable
and accrued liabilities, net.......... 37,230 (9,690) 31,330
Discontinued operations, net............. 16,700 830 (3,340)
----------- --------- ---------
Net cash from operating
activities....................... 405,230 281,760 314,560
----------- --------- ---------
Cash Flows From (For) Investing Activities:
Capital expenditures..................... (252,360) (198,170) (176,950)
Currency translation adjustments......... (17,500) (27,090) (15,820)
Acquisitions............................. -- -- (50,190)
Proceeds from sale of subsidiaries....... 33,170 -- 52,110
Other, net............................... 39,730 (45,810) 40,750
----------- --------- ---------
Net cash (for) investing
activities....................... (196,960) (271,070) (150,100)
----------- --------- ---------
Cash Flows From (For) Financing Activities:
Increase in debt......................... 862,800 872,140 514,410
Payment of debt.......................... (1,087,400) (915,630) (602,250)
Issuance of common shares................ -- 85,150 63,600
Issuance of preferred stock.............. 209,520 -- --
Cash dividends paid...................... (106,360) (93,410) (85,150)
----------- --------- ---------
Net cash (for) financing
activities....................... (121,440) (51,750) (109,390)
----------- --------- ---------
Cash and Cash Investments:
Increase (decrease) for the year......... 86,830 (41,060) 55,070
At January 1............................. 186,120 227,180 172,110
----------- --------- ---------
At December 31........................... $ 272,950 $ 186,120 $ 227,180
----------- --------- ---------
----------- --------- ---------

33
35

MASCO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

INTERIM FINANCIAL INFORMATION (UNAUDITED):

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
QUARTERS NET GROSS NET EARNINGS
ENDED SALES PROFIT INCOME PER SHARE
----------------------------------- ---------- ---------- -------- ---------

1993
December 31........................ $1,010,000 $ 322,070 $ 57,600 $ .38
September 30....................... 982,000 319,900 55,700 .36
June 30............................ 948,000 309,500 53,300 .35
March 31........................... 946,000 312,900 54,500 .36
---------- ---------- -------- ---------
$3,886,000 $1,264,370 $221,100 $1.45
---------- ---------- -------- ---------
---------- ---------- -------- ---------
1992
December 31........................ $ 908,000 $ 291,360 $ 43,000 $ .29
September 30....................... 899,000 293,500 50,800 .33
June 30............................ 867,000 285,300 48,500 .32
March 31........................... 851,000 273,800 40,800 .27
---------- ---------- -------- ---------
$3,525,000 $1,143,960 $183,100 $1.21
---------- ---------- -------- ---------
---------- ---------- -------- ---------

34
36

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information regarding executive officers required by this Item is set forth
as a Supplementary Item at the end of Part I hereof (pursuant to Instruction 3
to Item 401(b) of Regulation S-K). Other information required by this Item will
be contained in the Company's definitive Proxy Statement for its 1994 Annual
Meeting of Stockholders, to be filed on or before April 30, 1994, and such
information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION.

Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1994 Annual Meeting of Stockholders, to be
filed on or before April 30, 1994, and such information is incorporated herein
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

35
37

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(A) LISTING OF DOCUMENTS.

(1) Financial Statements. The Company's Consolidated Financial
Statements included in Item 8 hereof, as required at December 31,
1993 and 1992, and for the years ended December 31, 1993, 1992 and
1991, consist of the following:

Consolidated Balance Sheet

Consolidated Statement of Income

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules.

(i) Financial Statement Schedules of the Company appended hereto, as
required at December 31, 1993, and for the years ended December
31, 1993, 1992 and 1991, consist of the following:

I. Marketable Securities -- Other Investments
II. Amounts Receivable from Related Parties and
Underwriters, Promoters, and Employees Other than
Related Parties
V. Property, Plant and Equipment
VI. Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment
VIII. Valuation and Qualifying Accounts
IX. Short-Term Borrowings
X. Supplementary Income Statement Information

(ii) (A) MascoTech, Inc. and Subsidiaries Consolidated Financial
Statements appended hereto, as required at December 31, 1993
and 1992, and for the years ended December 31, 1993, 1992
and 1991, consist of the following:

Consolidated Balance Sheet

Consolidated Statement of Income

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

(ii) (B) MascoTech, Inc. and Subsidiaries Financial Statement
Schedules appended hereto, as required for the years ended
December 31, 1993, 1992 and 1991, consist of the following:

II. Amount Receivable from Related Parties and
Underwriters, Promoters, and Employees Other than
Related Parties
V. Property, Plant and Equipment
VI. Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment
VIII. Valuation and Qualifying Accounts
X. Supplementary Income Statement Information

36
38

(3) Exhibits.

3.i Restated Certificate of Incorporation of Masco Corporation and
amendments thereto.(2)
3.ii Bylaws of Masco Corporation, as amended.
4.a Indenture dated as of December 1, 1982 between Masco Corporation and
Morgan Guaranty Trust Company of New York, as Trustee(2), and
Directors' resolutions establishing Masco Corporation's: (i) 9% Notes
Due April 15, 1996,(3), (ii) 9% Notes Due October 1, 2001,(2), (iii)
6 1/4% Notes Due June 15, 1995,(2) (iv) 6 5/8% Notes Due September 15,
1999,(2) 6 1/8% Notes Due September 15, 2003(1), and (vi) 7 1/8%
Debentures Due August 15, 2013(1).
4.b Indenture dated as of December 1, 1982 between Masco Corporation and
Citibank, N.A., as Trustee, and Directors' resolutions establishing
Masco Corporation's 5 1/4% Convertible Subordinated Debentures Due
2012, including form of Debenture.(3)
4.c $750,000,000 Credit Agreement dated as of November 7, 1991 among Masco
Corporation, the banks signatory thereto and Morgan Guaranty Trust
Company of New York, as agent(3), and Amendment No. 1 thereto dated
March 18, 1992.(2)
4.d Indenture dated as of November 1, 1986 between Masco Industries, Inc.
(now known as MascoTech, Inc.) and Morgan Guaranty Trust Company of
New York, as Trustee, and Directors' resolutions establishing Masco
Industries, Inc.'s 4 1/2% Convertible Subordinated Debentures Due
2003.
4.e Indenture dated as of February 1, 1987 between Masco Industries, Inc.
(now known as MascoTech, Inc.) and Chemical Bank (successor by merger
to Manufacturers Hanover Trust Company), as Trustee, and Directors'
resolutions establishing Masco Industries, Inc.'s 10% Senior
Subordinated Notes Due 1995.(2)
4.f Credit Agreement dated as of September 2, 1993 by and among MascoTech,
Inc., the banks party thereto, and NBD Bank, N.A., as Agent, and
Comerica Bank, The Bank of New York, The First National Bank of
Chicago, Morgan Guaranty Trust Company of New York and NationsBank of
North Carolina, N.A., as Co-Agents.
Note: Other instruments, notes or extracts from agreements defining the
rights of holders of long-term debt of Masco Corporation or its
subsidiaries have not been filed since (i) in each case the total
amount of long-term debt permitted thereunder does not exceed 10
percent of Masco Corporation's consolidated assets, and (ii) such
instruments, notes and extracts will be furnished by Masco Corporation
to the Securities and Exchange Commission upon request.
10.a Assumption and Indemnification Agreement dated as of May 1, 1984
between Masco Corporation and Masco Industries, Inc. (now known as
MascoTech, Inc.)(4)
10.b Corporate Services Agreement dated as of January 1, 1987 between Masco
Corporation and Masco Industries, Inc. (now known as MascoTech,
Inc.)(2)
10.c Corporate Opportunities Agreement dated as of May 1, 1984 between
Masco Corporation and Masco Industries, Inc. (now known as MascoTech,
Inc.)(4)
10.d Stock Repurchase Agreement dated as of May 1, 1984 between Masco
Corporation and Masco Industries, Inc. (now known as MascoTech, Inc.)
and related forfeiture letter dated September 20, 1985, Amendment to
Stock Repurchase Agreement dated as of December 20, 1990(3) and
Agreement

37
39

dated as of November 23, 1993 including an amendment to Stock
Repurchase Agreement.
Note: Exhibits 10.e through 10.p constitute the management contracts and
executive compensatory plans or arrangements in which certain of the
Directors and executive officers of the company participate.
10.e Masco Corporation 1991 Long-Term Stock Incentive Plan.(3)
10.f Masco Corporation 1988 Restricted Stock Incentive Plan (Restated
September 11, 1990).(4)
10.g Masco Corporation 1988 Stock Option Plan (Restated September 11,
1990).(4)
10.h Masco Corporation 1984 Restricted Stock (Industries) Incentive Plan
(Restated September 11, 1990).(4)
10.i Masco Corporation 1984 Stock Option Plan (Restated September 11,
1990).(4)
10.j Masco Corporation Restricted Stock Incentive Plan (Restated September
11, 1990).(4)
10.k Masco Corporation Non-Qualified Stock Option Plan 1975 (Restated
September 11, 1990).(4)
10.l MascoTech, Inc. 1991 Long-Term Stock Incentive Plan (Restated
September 14, 1993).
10.m MascoTech, Inc. 1984 Restricted Stock Incentive Plan (Restated
September 14, 1993).
10.n MascoTech, Inc. 1984 Stock Option Plan (Restated September 14, 1993).
10.o Masco Corporation Supplemental Executive Retirement and Disability
Plan.
10.p Form of Agreement dated June 29, 1989 between Masco Corporation and
certain of its officers.
10.q Amended and Restated Securities Purchase Agreement dated as of
November 23, 1993 between Masco Corporation and MascoTech, Inc.,
including form of Note.
10.r Registration Agreement dated as of March 31, 1993 between Masco
Corporation and Masco Industries, Inc. (now known as MascoTech, Inc.)
10.s Stock Purchase Agreement between Masco Corporation and Masco
Industries, Inc. (now known as MascoTech, Inc.) dated as of December
23, 1991 (regarding Masco Capital Corporation).(3)
11 Computation of Primary and Fully Diluted Per Share Earnings.
12 Computation of Ratio of Earnings to Fixed Charges.
21 List of Subsidiaries.
23.a Consent of Coopers & Lybrand relating to Masco Corporation's Financial
Statements and Financial Statement Schedules.
23.b Consent of Coopers & Lybrand relating to MascoTech, Inc.'s Financial
Statements and Financial Statement Schedules.

- ---------------
(1) Incorporated by reference to the Exhibits filed with Masco
Corporation's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993.

(2) Incorporated by reference to the Exhibits filed with Masco
Corporation's Annual Report on Form 10-K for the year ended December
31, 1992.

38
40

(3) Incorporated by reference to the Exhibits filed with Masco
Corporation's Annual Report on Form 10-K for the year ended December
31, 1991.

(4) Incorporated by reference to the Exhibits filed with Masco
Corporation's Annual Report on Form 10-K for the year ended December
31, 1990.

(B) REPORTS ON FORM 8-K.

The following Current Report on Form 8-K was filed by Masco Corporation in
the calendar quarter ended March 31, 1994:

Report on Form 8-K dated March 2, 1994 reporting under Item 5, "Other
Events," the 1993 year end financial results of the Company. The following
financial statements were filed with such Report:

(1) Audited consolidated balance sheet of Masco Corporation and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the three
years in the period ended December 31, 1993; and

(2) Audited consolidated balance sheet of MascoTech, Inc. and subsidiaries
as of December 31, 1993 and 1992, and the related consolidated
statements of income and cash flows for each of the three years in the
period ended December 31, 1993.

39
41

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 RICHARD G. MOSTELLER
RICHARD G. MOSTELLER
Senior Vice President -- Finance

March 24, 1994

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.

PRINCIPAL EXECUTIVE OFFICER:

RICHARD A. MANOOGIAN Chairman of the Board
RICHARD A. MANOOGIAN and Chief Executive Officer

PRINCIPAL FINANCIAL OFFICER:

RICHARD G. MOSTELLER Senior Vice President -- Finance
RICHARD G. MOSTELLER

PRINCIPAL ACCOUNTING OFFICER:

ROBERT B. ROSOWSKI Vice President -- Controller
ROBERT B. ROSOWSKI

WAYNE B. LYON President and Director
WAYNE B. LYON

March 24, 1994
LILLIAN BAUDER Director
LILLIAN BAUDER

ERWIN L. KONING Director
ERWIN L. KONING

JOHN A. MORGAN Director
JOHN A. MORGAN

ARMAN SIMONE Director
ARMAN SIMONE

PETER W. STROH Director
PETER W. STROH

40
42

MASCO CORPORATION

FINANCIAL STATEMENT SCHEDULES
PURSUANT TO ITEM 14(A)(2) OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION

Schedules, as required, at December 31, 1993 and 1992 and for the years
ended December 31, 1993, 1992 and 1991:

PAGE
-----

I. Marketable Securities -- Other Investments...................................... F-2
II. Amounts Receivable from Related Parties and Underwriters, Promoters,
and Employees Other than Related Parties...................................... F-3
V. Property, Plant and Equipment................................................... F-4
VI. Accumulated Depreciation, Depletion and Amortization of Property, Plant and
Equipment..................................................................... F-5
VIII. Valuation and Qualifying Accounts............................................... F-6
IX. Short-Term Borrowings........................................................... F-7
X. Supplementary Income Statement Information...................................... F-8
MascoTech, Inc. and Subsidiaries Consolidated Financial Statements and Financial
Statement Schedules................................................................... F-9

F-1
43

MASCO CORPORATION

SCHEDULE I. MARKETABLE SECURITIES -- OTHER INVESTMENTS

DECEMBER 31, 1993

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------- ----------------- ------------ -------------- -------------

NUMBER OF
SHARES OR MARKET VALUE AMOUNT AT
UNITS -- OF EACH WHICH EACH
PRINCIPAL ISSUE AT ISSUE CARRIED
NAME OF ISSUER AND TITLE AMOUNT OF COST OF BALANCE IN THE
OF EACH ISSUE BONDS & NOTES EACH ISSUE SHEET DATE BALANCE SHEET
- -------------------------------- ----------------- ------------ -------------- -------------

MARKETABLE SECURITIES
Current Assets:
Common Stocks.............. -- $ 4,890,000 $ 5,560,000 $ 4,890,000
------------ -------------- -------------
------------ -------------- -------------
Long-Term Assets:
Common Stocks:
Home Furnishings......... -- $ 6,830,000 $ 12,520,000 $ 6,830,000
Other Consumer
Products.............. -- 2,120,000 1,500,000 2,120,000
------------ -------------- -------------
Total Common Stocks... -- $ 8,950,000 $ 14,020,000 $ 8,950,000
------------ -------------- -------------
------------ -------------- -------------
OTHER INVESTMENTS
Equity Investments in
MascoTech, Inc............. 25,170,000 $294,700,000 $ 842,310,000 $ 294,700,000
Investments, Other............ -- 181,710,000 232,420,000 181,710,000
------------ -------------- -------------
$476,410,000 $1,074,730,000 $ 476,410,000
------------ -------------- -------------
------------ -------------- -------------

F-2
44

MASCO CORPORATION

SCHEDULE II. AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- --------------------------- ----------- ---------- ------------------------- --------------------------
DEDUCTIONS BALANCE AT
BALANCE AT ------------------------- DECEMBER 31, 1993
JANUARY 1, AMOUNTS AMOUNTS --------------------------
NAME OF DEBTOR 1993 ADDITIONS COLLECTED WRITTEN OFF CURRENT NON CURRENT
- -------------------------- ----------- ---------- ---------- ------------ ----------- ------------
(A) (A)

Gerald Bright.............. $ 225,000 $ 225,000 --
David A. Doran............. 1,350,000 381,000 $ 969,000
Ronald L. Jones............ 900,000 -- 900,000
Raymond F. Kennedy......... 1,350,000 -- 1,350,000
John R. Leekley............ 1,350,000 1,350,000 --
Wayne B. Lyon.............. 2,250,000 -- 2,250,000
Richard A. Manoogian....... 7,200,000 -- 7,200,000
Richard G. Mosteller....... 2,250,000 1,595,000 655,000
John C. Nicholls, Jr. ..... 900,000 -- 900,000
Peter J. Pirsch............ 450,000 -- 450,000
Robert B. Rosowski......... 450,000 -- 450,000
John F. Ullrich............ 900,000 262,000 638,000
Samuel Valenti, III........ 2,250,000 -- 2,250,000
David G. Wesenberg......... 225,000 225,000 --
----------- ---------- ---------- ------------ ----------- ------------
22,050,000 -- 4,038,000 -- 18,012,000 --
Accrued Interest on Notes
Receivable............... 5,402,000 $1,428,000 1,156,000 -- 5,674,000 --
Discount on Notes
Receivable(B)............ (1,409,000) 977,000 -- -- (432,000) --
----------- ---------- ---------- ------------ ----------- ------------
$26,043,000 $2,405,000 $5,194,000 -- $23,254,000 --
----------- ---------- ---------- ------------ ----------- ------------
----------- ---------- ---------- ------------ ----------- ------------

All amounts receivable are related to an incentive program of the Company
that has been disclosed in previous proxy statements of the Company and that
will be described in the Company's definitive Proxy Statement for its 1994
Annual Meeting of Stockholders to be filed on or before April 30, 1994.

Notes:
(A) Amounts receivable from employees are due June 30, 1994. The stated rate
of interest is 7%.
(B) Represents the discount pertaining to the difference between the stated
rate of interest of 7% and the effective rate of interest of approximately
9%.

Activity for 1992 includes interest income of $1,555,000, discount
amortization of $681,000 and, in consideration for return to the Company of
assets of approximate equal value, cancellation of the receivable balances of
$1,592,000 for two former employees.

Activity for 1991 includes interest income of $1,733,000 and discount
amortization of $545,000.

F-3
45

MASCO CORPORATION

SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
----------- -------------- ------------ ------------ ------------ --------------

OTHER
BALANCE AT CHANGES
BEGINNING ADDITIONS ADD BALANCE AT
DESCRIPTION OF PERIOD AT COST RETIREMENTS (DEDUCT) END OF PERIOD
----------- -------------- ------------ ------------ ------------ --------------
(A) (B)

1993:
Land and land improvements............. $ 77,080,000 $ 3,580,000 $ 1,580,000 $ (410,000) $ 78,670,000
Buildings.............................. 574,960,000 22,000,000 7,180,000 5,850,000 595,630,000
Machinery and equipment................ 692,490,000 45,180,000 15,110,000 21,280,000 743,840,000
Office, delivery and other equipment... 178,920,000 24,110,000 10,400,000 4,110,000 196,740,000
Construction in progress............... 30,550,000 71,670,000 1,930,000 (31,810,000) 68,480,000
-------------- ------------ ------------ ------------ --------------
$1,554,000,000 $166,540,000 $ 36,200,000 $ (980,000) $1,683,360,000
-------------- ------------ ------------ ------------ --------------
-------------- ------------ ------------ ------------ --------------
1992:
Land and land improvements............. $ 75,420,000 $ 1,560,000 $ 680,000 $ 780,000 $ 77,080,000
Buildings.............................. 556,520,000 19,540,000 4,460,000 3,360,000 574,960,000
Machinery and equipment................ 634,310,000 47,300,000 6,020,000 16,900,000 692,490,000
Office, delivery and other equipment... 166,450,000 18,990,000 9,350,000 2,830,000 178,920,000
Construction in progress............... 27,460,000 35,780,000 2,050,000 (30,640,000) 30,550,000
-------------- ------------ ------------ ------------ --------------
$1,460,160,000 $123,170,000 $ 22,560,000 $ (6,770,000) $1,554,000,000
-------------- ------------ ------------ ------------ --------------
-------------- ------------ ------------ ------------ --------------
1991:
Land and land improvements............. $ 73,460,000 $ 2,780,000 $ 980,000 $ 160,000 $ 75,420,000
Buildings.............................. 476,570,000 18,740,000 3,880,000 65,090,000 556,520,000
Machinery and equipment................ 581,910,000 46,140,000 16,720,000 22,980,000 634,310,000
Office, delivery and other equipment... 150,900,000 18,500,000 6,270,000 3,320,000 166,450,000
Construction in progress............... 92,150,000 32,350,000 280,000 (96,760,000) 27,460,000
-------------- ------------ ------------ ------------ --------------
$1,374,990,000 $118,510,000 $ 28,130,000 $ (5,210,000) $1,460,160,000
-------------- ------------ ------------ ------------ --------------
-------------- ------------ ------------ ------------ --------------

Notes:
(A) Including fixed asset additions of $5,480,000 in 1992 and $5,520,000 in
1991 obtained through the purchase of companies.
(B) Adjustments and reclassifications between noncurrent asset accounts and
the effect of foreign currency translation.

F-4
46

MASCO CORPORATION

SCHEDULE VI. ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
----------- ------------ ----------- ----------- ----------- ------------

ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES BALANCE AT
BEGINNING COSTS AND ADD END OF
DESCRIPTION OF PERIOD EXPENSES RETIREMENTS (DEDUCT) PERIOD
----------- ------------ ----------- ----------- ----------- ------------
(A)

1993:
Land improvements.......................... $ 7,350,000 $ 890,000 -- $ (90,000) $ 8,150,000
Buildings.................................. 121,130,000 17,310,000 $4,430,000 (1,640,000) 132,370,000
Machinery and equipment.................... 297,350,000 43,690,000 8,300,000 2,920,000 335,660,000
Office, delivery and other equipment....... 97,640,000 20,210,000 8,100,000 2,260,000 112,010,000
------------ ----------- ----------- ----------- ------------
$523,470,000 $82,100,000 $20,830,000 $ 3,450,000 $588,190,000
------------ ----------- ----------- ----------- ------------
------------ ----------- ----------- ----------- ------------
1992:
Land improvements.......................... $ 6,360,000 $ 880,000 $ 30,000 $ 140,000 $ 7,350,000
Buildings.................................. 105,020,000 17,160,000 1,560,000 510,000 121,130,000
Machinery and equipment.................... 267,480,000 41,960,000 4,250,000 (7,840,000) 297,350,000
Office, delivery and other equipment....... 81,230,000 19,350,000 7,000,000 4,060,000 97,640,000
------------ ----------- ----------- ----------- ------------
$460,090,000 $79,350,000 $12,840,000 $(3,130,000) $523,470,000
------------ ----------- ----------- ----------- ------------
------------ ----------- ----------- ----------- ------------
1991:
Land improvements.......................... $ 5,380,000 $ 1,020,000 $ 130,000 $ 90,000 $ 6,360,000
Buildings.................................. 90,110,000 14,630,000 900,000 1,180,000 105,020,000
Machinery and equipment.................... 238,050,000 37,610,000 6,840,000 (1,340,000) 267,480,000
Office, delivery and other equipment....... 71,310,000 16,930,000 4,300,000 (2,710,000) 81,230,000
------------ ----------- ----------- ----------- ------------
$404,850,000 $70,190,000 $12,170,000 $(2,780,000) $460,090,000
------------ ----------- ----------- ----------- ------------
------------ ----------- ----------- ----------- ------------

NOTE:
(A) Adjustments and reclassifications between noncurrent asset accounts and
the effect of foreign currency translation.

F-5
47

MASCO CORPORATION

SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
----------- ----------- ------------------------- ----------- -------------

ADDITIONS
-------------------------
BALANCE AT CHARGED CHARGED
BEGINNING TO COSTS TO OTHER BALANCE AT
DESCRIPTION OF PERIOD AND EXPENSES ACCOUNTS DEDUCTIONS END OF PERIOD
----------- ----------- ------------ --------- ----------- -------------
(A) (B)

Allowance for doubtful accounts,
deducted from accounts receivable in
the balance sheet:
1993................................ $16,340,000 $12,900,000 $(130,000) $10,040,000 $19,070,000
----------- ------------ --------- ----------- -------------
----------- ------------ --------- ----------- -------------
1992................................ $13,680,000 $15,460,000 -- $12,800,000 $16,340,000
----------- ------------ --------- ----------- -------------
----------- ------------ --------- ----------- -------------
1991................................ $13,010,000 $14,300,000 -- $13,630,000 $13,680,000
----------- ------------ --------- ----------- -------------
----------- ------------ --------- ----------- -------------

Notes:
(A) Allowance of companies acquired and companies disposed of, net.
(B) Deductions, representing uncollectible accounts written off, less
recoveries of accounts written off in prior years.

F-6
48

MASCO CORPORATION

SCHEDULE IX. SHORT-TERM BORROWINGS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------------------ ------------ -------- ------------ ------------ -------------

MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
BALANCE AT AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
CATEGORY OF AGGREGATE END OF INTEREST DURING THE DURING THE DURING THE
SHORT-TERM BORROWING PERIOD RATE PERIOD PERIOD PERIOD
- ------------------------------ ------------ -------- ------------ ------------ -------------
(A) (A)

1993:
Payable to banks (various
due dates)............... $ 30,300,000 5.5% $126,640,000 $ 95,050,000 4.4%
Other (various due dates)... 2,860,000 8.3% 2,860,000 2,340,000 8.9%
------------
$ 33,160,000
------------
------------
1992:
Payable to banks (various
due dates)............... $ 93,040,000 5.5% $148,090,000 $122,600,000 6.1%
Other (various due dates)... 1,770,000 9.8% 7,970,000 3,520,000 8.4%
------------
$ 94,810,000
------------
------------
1991:
Payable to banks (various
due dates)............... $127,990,000 8.3% $186,030,000 $163,400,000 8.3%
Other (various due dates)... 4,060,000 6.9% 13,750,000 10,360,000 7.3%
------------
$132,050,000
------------
------------

Note:
(A) Computed primarily using the average daily balances or interest rates.

F-7
49

MASCO CORPORATION

SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B
----------- --------
CHARGED TO COSTS AND EXPENSES
-------------------------------------------
ITEM DESCRIPTION 1993 1992 1991
- ---- ----------- ------------- ------------- -------------

1. Maintenance and repairs........................ $ 67,470,000 $ 63,660,000 $ 58,190,000
------------- ------------- -------------
------------- ------------- -------------
5. Advertising costs.............................. $ 166,770,000 $ 143,750,000 $ 127,500,000
------------- ------------- -------------
------------- ------------- -------------

Other captions provided for under this schedule are excluded as the amounts
related to such captions are not material.

F-8
50

MASCOTECH, INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Shareholders of MascoTech, Inc.:

We have audited the accompanying consolidated balance sheet of MascoTech,
Inc. and subsidiaries (formerly Masco Industries, Inc.) as of December 31, 1993
and 1992, and the related consolidated statements of income and cash flows for
each of the three years in the period ended December 31, 1993, and the financial
statement schedules as listed in Item 14(a)(2)(ii) of this Form 10-K. These
financial statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of MascoTech, Inc.
and subsidiaries as of December 31, 1993 and 1992, and the consolidated results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedules
referred to above, when considered in relation to the basic financial statements
taken as a whole, present fairly, in all material respects, the information
required to be included therein.

COOPERS & LYBRAND

Detroit, Michigan
February 24, 1994

F-9
51

MASCOTECH, INC.

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1993 AND 1992

1993 1992
-------------- --------------

ASSETS
Current assets:
Cash and cash investments................................... $ 83,200,000 $ 76,000,000
Receivables................................................. 238,820,000 272,920,000
Inventories................................................. 140,040,000 222,280,000
Deferred and refundable income taxes........................ 41,780,000 13,990,000
Prepaid expenses and other assets........................... 52,000,000 47,250,000
-------------- --------------
Total current assets................................... 555,840,000 632,440,000
Equity and other investments in affiliates.................... 170,510,000 81,460,000
Property and equipment, net................................... 490,190,000 537,420,000
Excess of cost over net assets of acquired companies.......... 439,760,000 479,400,000
Notes receivable and other assets............................. 66,100,000 76,590,000
Net assets of discontinued operations......................... 67,510,000 --
-------------- --------------
Total assets........................................... $1,789,910,000 $1,807,310,000
-------------- --------------
-------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................ $ 95,520,000 $ 103,620,000
Accrued liabilities......................................... 103,260,000 117,430,000
Current portion of long-term debt........................... 2,830,000 64,430,000
-------------- --------------
Total current liabilities.............................. 201,610,000 285,480,000
Long-term debt................................................ 788,360,000 1,065,390,000
Deferred income taxes and other long-term liabilities......... 132,310,000 103,040,000
-------------- --------------
Total liabilities...................................... 1,122,280,000 1,453,910,000
-------------- --------------
Shareholders' equity:
Preferred stock, $1 par: Authorized: 25,000,000;
Outstanding: 10.8 million in 1993 (liquidation value-$216
million) and .8 million in 1992 (liquidation value-$77.5
million)................................................. 10,800,000 780,000
Common stock, $1 par: Authorized: 250,000,000; Outstanding:
60,510,000 and 59,520,000................................ 60,510,000 59,520,000
Paid-in capital............................................. 367,290,000 84,390,000
Retained earnings........................................... 232,120,000 202,660,000
Cumulative translation adjustments.......................... (3,090,000) 6,050,000
-------------- --------------
Total shareholders' equity............................. 667,630,000 353,400,000
-------------- --------------
Total liabilities and shareholders' equity............. $1,789,910,000 $1,807,310,000
-------------- --------------
-------------- --------------

The accompanying notes are an integral part of the consolidated financial
statements.

F-10
52

MASCOTECH, INC.

CONSOLIDATED STATEMENT OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

1993 1992 1991
--------------- --------------- ---------------

Net sales................................... $ 1,582,880,000 $ 1,455,320,000 $ 1,266,210,000
Cost of sales............................... (1,257,480,000) (1,159,050,000) (1,054,520,000)
--------------- --------------- ---------------
Gross profit......................... 325,400,000 296,270,000 211,690,000
Selling, general and administrative
expenses.................................. (179,680,000) (184,430,000) (168,100,000)
--------------- --------------- ---------------
Operating profit..................... 145,720,000 111,840,000 43,590,000
--------------- --------------- ---------------
Other income (expense), net:
Interest expense, Masco Corporation....... (6,990,000) (7,800,000) (7,800,000)
Other interest expense.................... (74,370,000) (78,190,000) (104,680,000)
Equity and interest income from
affiliates............................. 21,000,000 15,750,000 29,390,000
Gain from change in investment of equity
affiliates............................. 9,490,000 16,700,000 --
Gain from disposition of operations....... -- -- 21,500,000
Other, net................................ 26,330,000 9,950,000 5,530,000
--------------- --------------- ---------------
(24,540,000) (43,590,000) (56,060,000)
--------------- --------------- ---------------
Income (loss) from continuing operations
before income taxes (credit) and
extraordinary loss........................ 121,180,000 68,250,000 (12,470,000)
Income taxes (credit)....................... 50,290,000 29,210,000 (2,120,000)
--------------- --------------- ---------------
Income (loss) from continuing operations
before extraordinary loss................. 70,890,000 39,040,000 (10,350,000)
Discontinued operations (net of income
taxes):
Income (loss) from operations of
discontinued segment.............. 2,630,000 (610,000) 1,380,000
Loss on disposition.................. (22,270,000) -- --
--------------- --------------- ---------------
Income (loss) before extraordinary loss..... 51,250,000 38,430,000 (8,970,000)
Extraordinary loss (net of income taxes).... (3,650,000) -- --
--------------- --------------- ---------------
Net income (loss).................... $ 47,600,000 $ 38,430,000 $ (8,970,000)
--------------- --------------- ---------------
--------------- --------------- ---------------
Preferred stock dividends................... $ 14,930,000 $ 9,300,000 $ 9,600,000
--------------- --------------- ---------------
--------------- --------------- ---------------
Earnings (loss) attributable to
common stock...................... $ 32,670,000 $ 29,130,000 $ (18,570,000)
--------------- --------------- ---------------
--------------- --------------- ---------------

1993
-------------------
ASSUMING
FULL 1992 1991
PRIMARY DILUTION PRIMARY PRIMARY
------- -------- ------- -------

Earnings (loss) per common and common equivalent share:
Continuing operations................................... $ .97 $.91 $ .49 $(.33)
Discontinued operations:
Income (loss) from operations of discontinued
segment............................................ .05 .04 (.01) .02
Loss on disposition.................................. (.39) * -- --
------- -------- ------- -------
Income (loss) before extraordinary loss................. .63 .63 .48 (.31)
Extraordinary loss...................................... (.06) * -- --
------- -------- ------- -------
Earnings (loss) attributable to common stock............ $ .57 $.57 $ .48 $(.31)
------- -------- ------- -------
------- -------- ------- -------

- -------------------------
* Anti-dilutive

The accompanying notes are an integral part of the consolidated financial
statements.

F-11
53

MASCOTECH, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

1993 1992 1991
------------- ------------- -------------

CASH FROM (USED FOR):
OPERATIONS:
Net income (loss)............................... $ 47,600,000 $ 38,430,000 $ (8,970,000)
Gain, sale of assets............................ -- -- (21,500,000)
Gain from change in investment.................. (9,490,000) (16,700,000) --
Depreciation and amortization................... 59,810,000 59,920,000 59,040,000
Equity earnings, net of dividends............... (12,000,000) (5,250,000) (4,460,000)
Deferred taxes.................................. 15,590,000 3,130,000 3,270,000
(Decrease) in valuation allowance for marketable
securities.................................... -- -- (13,730,000)
(Increase) decrease in receivables.............. (5,900,000) (23,930,000) 9,780,000
(Increase) decrease in inventories.............. (2,990,000) (2,920,000) 25,120,000
(Increase) decrease in prepaid expenses......... (11,650,000) 4,010,000 (4,470,000)
Decrease in accounts payable and accrued
liabilities................................... (5,900,000) (12,930,000) (530,000)
Other, net, including extraordinary loss........ 8,180,000 13,540,000 2,950,000
Discontinued operations, net.................... 16,700,000 830,000 (3,340,000)
------------- ------------- -------------
Net cash from operating activities............ 99,950,000 58,130,000 43,160,000
------------- ------------- -------------
FINANCING:
Increase in debt................................ -- 11,670,000 14,720,000
Payment or repurchase of debt................... (150,020,000) (135,490,000) (122,430,000)
Issuance of preferred stock..................... 209,520,000 -- --
Retirement of preferred stock................... (100,000,000) -- --
Payment of dividends............................ (16,020,000) (9,300,000) (7,280,000)
Other, net...................................... 3,770,000 (2,240,000) --
------------- ------------- -------------
Net cash used for financing activities........ (52,750,000) (135,360,000) (114,990,000)
------------- ------------- -------------
INVESTMENTS:
Cash received from redemption of TriMas
subordinated debentures....................... -- 88,000,000 40,000,000
Cash paid Masco Corporation..................... (87,500,000) -- --
Cash received from dispositions:
Energy-related segment........................ 93,450,000 -- --
Masco Capital................................. -- -- 49,450,000
Other operations.............................. -- -- 52,110,000
Masco Capital distributions, net................ -- -- 21,220,000
Capital expenditures............................ (59,540,000) (60,000,000) (48,630,000)
Decrease in marketable securities, net.......... 2,980,000 3,150,000 26,190,000
Other, net...................................... 10,610,000 4,130,000 7,050,000
------------- ------------- -------------
Net cash (used for) from investing
activities................................. (40,000,000) 35,280,000 147,390,000
------------- ------------- -------------
CASH AND CASH INVESTMENTS:
Increase (decrease) for the year................... 7,200,000 (41,950,000) 75,560,000
At January 1....................................... 76,000,000 117,950,000 42,390,000
------------- ------------- -------------
At December 31................................ $ 83,200,000 $ 76,000,000 $ 117,950,000
------------- ------------- -------------
------------- ------------- -------------

The accompanying notes are an integral part of the consolidated financial
statements.

F-12
54

MASCOTECH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES:

Principles of Consolidation. The consolidated financial statements include
the accounts of the Company and all majority-owned subsidiaries. All significant
intercompany transactions have been eliminated. Corporations that are 20 to 50
percent owned are accounted for by the equity method of accounting. Capital
transactions by equity affiliates at amounts differing from the Company's
carrying amount are reflected in other income or expense and the investment in
affiliates account.

Certain amounts for the years ended December 31, 1992 and 1991 have been
reclassified to conform to the presentation adopted in 1993. The statements of
income and cash flows for 1993, 1992 and 1991 and related notes have been
reclassified to present the Energy-related segment as discontinued operations.
In addition, the balance sheet as of December 31, 1993 reflects the
Energy-related segment as discontinued operations (see "Discontinued Operations"
note). The balance sheet as of December 31, 1992 has not been reclassified for
discontinued operations. Effective June 23, 1993 the Company changed its name to
MascoTech, Inc. from Masco Industries, Inc.

The Company has a corporate services agreement with Masco Corporation,
which at December 31, 1993 owned approximately 42 percent of the Company's
Common Stock. Under the terms of the agreement, the Company pays fees to Masco
Corporation for various corporate staff support and administrative services,
research and development and facilities. Such fees, which are determined
principally as a percentage of net sales, including net sales related to
discontinued operations, aggregated approximately $11 million in each of 1993,
1992 and 1991.

Cash and Cash Investments. The Company considers all highly liquid debt
instruments with an initial maturity of three months or less to be cash and cash
investments. The carrying amount reported in the balance sheet for cash and cash
investments approximates fair value. At December 31, 1993, the Company has $33
million on deposit with a German bank that is subject to currency exchange rate
fluctuations.

Receivables. Receivables are presented net of allowances for doubtful
accounts of $5.1 million and $7.2 million at December 31, 1993 and 1992,
respectively.

Inventories. Inventories are stated at the lower of cost or net realizable
value, with cost determined principally by use of the first-in, first-out
method.

Property and Equipment, Net. Property and equipment additions, including
significant betterments, are recorded at cost. Upon retirement or disposal of
property and equipment, the cost and accumulated depreciation are removed from
the accounts, and any gain or loss is included in income. Repair and maintenance
costs are charged to expense as incurred.

Depreciation and Amortization. Depreciation is computed principally using
the straight-line method over the estimated useful lives of the assets. Annual
depreciation rates are as follows: buildings and land improvements, 2 1/2 to 10
percent, and machinery and equipment, 6 2/3 to 33 1/3 percent. Deferred
financing costs are amortized over the lives of the related debt securities. The
excess of cost over net assets of acquired companies is amortized using the
straight-line method over the period estimated to be benefitted, not exceeding
40 years. At each balance sheet date management assesses whether there has been
a permanent impairment of the excess of cost over net assets of acquired
companies by comparing anticipated undiscounted future cash flows from operating
activities with the carrying amount of the excess of cost over net assets of
acquired companies. The factors considered by management in performing this
assessment include current operating results, business prospects, market trends,
potential product obsolescence, competitive activities and other economic
factors. Based on this assessment there was no permanent impairment related to
excess of cost over net assets of acquired companies at December 31, 1993.

F-13
55

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 1993 and 1992, accumulated amortization of the excess of
cost over net assets of acquired companies and patents was $98.4 million and
$105.1 million, respectively. Amortization expense was $22.2 million, $22.8
million and $21.2 million in 1993, 1992 and 1991, respectively, including
amortization expense of approximately $1.6 million in each year related to
discontinued operations.

Income Taxes. In January, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income Taxes."
SFAS No. 109 is an asset and liability approach that requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns. In estimating future tax consequences, SFAS No. 109 generally allows
consideration of all expected future events other than enactments of changes in
the tax law or tax rates. Previously, the Company used the SFAS No. 96 asset and
liability approach that gave no recognition to future events other than the
recovery of assets and settlement of liabilities at their carrying amounts.
There was no income statement impact from the adoption of SFAS No. 109 and the
required balance sheet reclassification was immaterial. Provision is made for
U.S. income taxes on the undistributed earnings of foreign subsidiaries unless
such earnings are considered permanently reinvested.

Earnings (Loss) Per Common Share. Primary earnings (loss) per common share
are based on the weighted average number of shares of common stock and common
stock equivalents outstanding (including the dilutive effect of options and
warrants, utilizing the treasury stock method) of 57.4 million, 60.9 million and
59.7 million in 1993, 1992 and 1991, respectively, and earnings (loss) after
deducting preferred stock dividends of $14.9 million, $9.3 million and $9.6
million in 1993, 1992 and 1991, respectively.

Fully diluted earnings (loss) per common share are only presented when the
assumed conversion of convertible debentures is dilutive. Fully diluted earnings
per share in 1993 were calculated based on 68.8 million weighted average common
shares outstanding. Convertible securities did not have a dilutive effect on
earnings (loss) in 1992 or 1991. The shares of Dividend Enhanced Convertible
Stock DECSSM (the "DECS") issued in 1993 (see "Shareholders' Equity" note) are
common stock equivalents, but are not included in the calculation of primary or
fully diluted shares outstanding as such inclusion would be anti-dilutive.

In late 1993, approximately 10.4 million shares were issued as a result of
the conversion of the 6% Convertible Subordinated Debentures (see "Shareholders'
Equity" note). If such conversion had taken place at the beginning of 1993, the
primary earnings per common and common equivalent share amounts would have
approximated the amounts presented for earnings per common and common equivalent
share, assuming full dilution, for the year ended December 31, 1993.

Adoption of Statements of Financial Accounting Standards. The Company
expects that the adoption of Statements of Financial Accounting Standards
("SFAS") No. 112 "Employers' Accounting for Postemployment Benefits", SFAS No.
114 "Accounting by Creditors for Impairment of a Loan" and SFAS No. 115
"Accounting for Certain Investments in Debt and Equity Securities" will not have
a material impact on the financial position or the results of operations of the
Company when adopted in 1994 and 1995.

SUPPLEMENTARY CASH FLOWS INFORMATION:

Significant transactions not affecting cash were: in 1993: in addition to
the payment by the Company of $87.5 million, the non-cash portion of the
issuance of Company Preferred Stock and warrants in exchange for Company Common
Stock, Company Preferred Stock and Masco Corporation's holdings of Emco Limited
common stock and convertible debentures (see "Shareholders' Equity" note);
conversion of $187 million of convertible debentures into Company Common Stock

F-14
56

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(see "Shareholders' Equity" note); and conversion of the Company's TriMas
Corporation ("TriMas") convertible preferred stock holdings into TriMas common
stock (see "Equity and Other Investments in Affiliates" note); and in 1991: an
exchange of certain operating assets (see "Dispositions of Other Operations"
note); and the assumption of liabilities of $18 million in partial exchange for
the acquisition of Creative Industries Group (see "Equity and Other Investments
in Affiliates" note).

Income taxes paid were $32 million in 1993 and $23 million in 1992. Income
tax refunds of $8 million were received in 1991. Interest paid was $82 million,
$91 million and $115 million in 1993, 1992 and 1991, respectively.

DISCONTINUED OPERATIONS:

In late November, 1993, the Company adopted a formal plan to divest its
Energy-related business segment, which consisted of seven business units.
Accordingly, the consolidated statements of income and cash flows and related
notes have been reclassified to present such Energy-related segment as
discontinued operations. During 1993, two such business units were sold for
approximately $93 million, including the sale of one business unit to the
Company's equity affiliate, TriMas for $60 million cash. The expected loss from
the planned disposition of the Company's Energy-related segment resulted in a
fourth quarter 1993 pre-tax charge of approximately $41 million (approximately
$22 million after-tax), including a provision for the businesses not yet sold
and the deferral of a portion of the gain (approximately $6 million after-tax)
related to the sale of the business to TriMas. The Company expects to sell the
remaining business units in privately negotiated transactions in 1994.

Selected financial information for discontinued operations is as follows as
at December 31, 1993 and for the period up to the decision to discontinue in
1993 and for the years ended December 31, 1992 and 1991:

(IN THOUSANDS)
1993 1992 1991
------------ -------- --------

Net sales.................................... $191,930 $201,520 $200,780
------------ -------- --------
------------ -------- --------
Operating income............................. $ 5,540 $ 3,050 $ 1,070
Other income (expense)....................... (480) (960) 910
------------ -------- --------
Pre-tax income............................... 5,060 2,090 1,980
Income taxes................................. 2,430 2,700 600
------------ -------- --------
Income (loss) from discontinued operations... $ 2,630 $ (610) $ 1,380
------------ -------- --------
------------ -------- --------

AT
DECEMBER 31,
1993
------------

Receivables.................................. $ 34,890
Inventories.................................. 39,320
Non-current assets........................... 40,690
Current liabilities.......................... (14,550)
Other, principally provision for disposition
costs...................................... (32,840)
------------
Net assets of discontinued operations........ $ 67,510
------------
------------

The unusual relationship of income taxes to pre-tax income in 1992 results
principally from foreign losses for which no tax benefit was recorded. Operating
and pre-tax income include charges of $6 million in 1991, principally related to
the discontinuance of product lines and the cost of restructuring several
businesses.

F-15
57

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DISPOSITIONS OF OTHER OPERATIONS:

In separate transactions from late 1989 to early 1991, the Company divested
itself of three subsidiaries and received consideration of approximately $160
million, of which $108 million was received in 1990. The remaining $52 million
was received in 1991. In addition, in 1991 the Company disposed of certain
equity affiliates, and exchanged operating assets aggregating approximately $27
million.

These transactions, including the disposition of Masco Capital Corporation
(see "Equity and Other Investments in Affiliates" note), resulted in an
approximate $22 million pre-tax gain in 1991.

INVENTORIES:

(IN THOUSANDS)
AT DECEMBER 31
--------------------
1993 1992
-------- --------

Finished goods........................................... $ 39,400 $ 80,220
Work in process.......................................... 38,240 49,970
Raw material............................................. 62,400 92,090
-------- --------
$140,040 $222,280
-------- --------
-------- --------

EQUITY AND OTHER INVESTMENTS IN AFFILIATES:

Equity and other investments in affiliates consist primarily of the
following common stock interests in publicly traded affiliates:

AT DECEMBER 31
--------------------
1993 1992 1991
---- ---- ----

TriMas Corporation.......................................... 43% 28% 41%
Emco Limited................................................ 43% -- --
Titan Wheel International, Inc. ............................ 21% 47% 20%

F-16
58

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The carrying amount of investments in affiliates at December 31, 1993 and
1992 and quoted market values at December 31, 1993 for publicly traded
affiliates (which may differ from the amounts that could have been realized upon
disposition) are as follows:

(IN THOUSANDS)
1993
QUOTED 1993 1992
MARKET CARRYING CARRYING
VALUE AMOUNT AMOUNT
-------- -------- --------

Common stock:
TriMas Corporation.............................. $387,830 $ 40,550 $ 42,630
Emco Limited.................................... 65,190 50,470 --
Titan Wheel International, Inc. ................ 37,580 15,500 4,130
-------- -------- --------
Common stock holdings............................. 490,600 106,520 46,760
-------- -------- --------
Convertible debt:
Emco Limited.................................... 33,520 30,700 --
-------- -------- --------
Convertible debt holdings......................... 33,520 30,700 --
-------- -------- --------
Investments in publicly traded affiliates......... $524,120 137,220 46,760
--------
--------
Other non public affiliates....................... 33,290 34,700
-------- --------
Total...................................... $170,510 $ 81,460
-------- --------
-------- --------

In 1988, the Company transferred several businesses to TriMas, a publicly
traded, diversified manufacturer of commercial, industrial and consumer
products. In exchange, the Company received $128 million principal amount of 14%
Subordinated Debentures (which were subsequently redeemed resulting in
prepayment premium income to the Company of $9 million in 1992 and $4 million in
1991), $70 million (liquidation value) of 10% Convertible Participating
Preferred Stock and 9.3 million shares of TriMas common stock.

During the second quarter of 1992, TriMas sold 9.2 million shares of newly
issued common stock at $9.75 per share in a public offering, which reduced the
Company's common equity ownership interest in TriMas to 28 percent from 41
percent. As a result, the Company recognized a pre-tax gain of $16.7 million
from the change in the Company's common equity ownership interest in TriMas. In
late 1993, the TriMas 10% Convertible Participating Preferred Stock held by the
Company was converted at a conversion price of $9 per share into 7.8 million
shares of TriMas common stock, increasing the Company's common equity ownership
interest in TriMas to 43 percent.

In 1993, the Company sold a business unit to TriMas for $60 million cash
(see "Discontinued Operations" note).

Included in notes receivable are approximately $10.7 million of notes which
resulted from the sale by the Company of one million shares of its TriMas common
stock holdings to members of the Company's executive management group in
mid-1989. The notes have an effective interest rate of nine percent, payable at
maturity in mid-1994. Ownership and resale of certain of such shares is
restricted and subject to the continuing employment of these executives.

TriMas' Board of Directors declared a 100 percent stock distribution (one
additional share for every share held) to its shareholders effective July 19,
1993. TriMas share amounts and per share prices have been restated to reflect
this distribution.

The Company's holdings in Emco Limited ("Emco") were acquired from Masco
Corporation in 1993 (see "Shareholders' Equity" note). Emco is a major, publicly
traded, Canadian based

F-17
59

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
manufacturer and distributor of building and other industrial products with
annual sales of approximately $800 million.

At December 31, 1992, the Company had an approximate 47 percent common
equity ownership interest in Titan Wheel International, Inc. ("Titan"), a
manufacturer of wheels and other products for agricultural, construction and
other off-highway equipment markets. In May, 1993, Titan completed an initial
public offering of three million shares of common stock at $15 per share
(including 292,000 shares held by the Company), reducing the Company's common
equity ownership interest in Titan to 24 percent. The Company's ownership
interest was further reduced in late 1993 to 21 percent as a result of the
issuance of additional common shares by Titan in connection with an acquisition
by Titan. These transactions resulted in 1993 gains aggregating approximately
$12.8 million pre-tax (principally in the second quarter) as a result of the
sale of shares held by the Company and from the change in the Company's common
equity ownership interest in Titan.

During the second quarter of 1991, the Company acquired the remaining 50
percent equity ownership interest of Creative Industries Group, which had sales
in 1990 of approximately $150 million.

In 1991, Masco Capital Corporation ("Masco Capital") sold its principal
asset and used the proceeds to repay its outstanding bank borrowings and to make
loan repayments and distributions to its shareholders, whereby the Company
received approximately $65 million (including repayment of $44 million advanced
during 1991). In addition, the Company subsequently sold its 50 percent equity
ownership interest in Masco Capital to the other shareholder, Masco Corporation,
for approximately $50 million (which resulted in a pre-tax gain of approximately
$5 million) and contingent amounts based on the future value of certain assets
held by Masco Capital.

In addition to its equity and other investments in publicly traded
affiliates, the Company retains interests in privately held manufacturers of
automotive components, including the Company's 50 percent common equity
ownership interests in Autostyle, Inc., a manufacturer of reaction injection
molded automotive components, and Elbi-Hi Ram, Inc., a manufacturer of
electrical and electronic automotive components.

Approximate combined condensed financial data of the Company's equity
affiliates (including Emco after date of investment, Creative Industries Group
through date of acquisition (second quarter 1991) and Masco Capital through date
of disposition) are as follows:

(IN THOUSANDS)
AT DECEMBER 31
----------------------
1993 1992
--------- ---------

Current assets......................................... $ 657,680 $ 261,730
Current liabilities.................................... (222,580) (128,300)
--------- ---------
Working capital........................................ 435,100 133,430
Property and equipment, net............................ 349,740 214,760
Excess of cost over net assets of acquired companies... 170,760 113,660
Other assets........................................... 69,540 33,210
Long-term debt......................................... (628,520) (271,220)
Deferred income taxes and other long-term
liabilities.......................................... (34,950) (24,900)
--------- ---------
Shareholders' equity................................... $ 361,670 $ 198,940
--------- ---------
--------- ---------

F-18
60

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31
----------------------------------
1993 1992 1991
---------- -------- --------

Net sales..................................... $1,412,620 $655,120 $684,990
---------- -------- --------
---------- -------- --------
Operating profit.............................. $ 119,780 $ 77,860 $ 82,000
---------- -------- --------
---------- -------- --------
Net income before preferred stock dividends... $ 57,280 $ 30,200 $ 24,300
---------- -------- --------
---------- -------- --------

Equity and interest income from affiliates consists of the following:

(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31
----------------------------------
1993 1992 1991
---------- -------- --------

The Company's equity in affiliates' earnings
available for common shareholders........... $ 12,890 $ 5,250 $ 4,470
Dividends on TriMas preferred stock........... 5,250 7,000 7,000
Interest income............................... 2,860 3,500 17,920
---------- -------- --------
Equity and interest income from affiliates.... $ 21,000 $ 15,750 $ 29,390
---------- -------- --------
---------- -------- --------

PROPERTY AND EQUIPMENT, NET:

(IN THOUSANDS)
AT DECEMBER 31
--------------------
1993 1992
-------- --------

Cost:
Land and land improvements............................. $ 33,720 $ 39,740
Buildings.............................................. 158,750 182,460
Machinery and equipment................................ 605,600 669,800
-------- --------
798,070 892,000
Less accumulated depreciation............................ 307,880 354,580
-------- --------
$490,190 $537,420
-------- --------
-------- --------

Depreciation expense totalled $48 million, $46 million and $47 million in
1993, 1992 and 1991, respectively. These amounts include depreciation expense of
approximately $8 million in each year related to discontinued operations.

ACCRUED LIABILITIES:

(IN THOUSANDS)
AT DECEMBER 31
--------------------
1993 1992
-------- --------

Salaries, wages and commissions.......................... $ 22,970 $ 23,800
Income taxes............................................. 5,930 5,370
Interest................................................. 20,420 20,760
Insurance................................................ 11,010 12,150
Property, payroll and other taxes........................ 9,360 10,340
Other.................................................... 33,570 45,010
-------- --------
$103,260 $117,430
-------- --------
-------- --------

F-19
61

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

LONG-TERM DEBT:

(IN THOUSANDS)
AT DECEMBER 31
----------------------
1993 1992
-------- ----------

Held by Masco Corporation:
6% Convertible Subordinated Debentures, due 2011...... -- $ 130,000
Held by Banks and Others:
Bank revolving credit agreement, due 1997............. $295,000 410,000
10% Senior Subordinated Notes, due
March, 1995 (noncallable).......................... 233,150 233,150
10 1/4% Senior Subordinated Notes, due 1997........... 250,000 250,000
6% Convertible Subordinated Debentures, due 2011...... -- 56,890
Bank term loan, due 1996.............................. -- 31,090
Other................................................. 13,040 18,690
-------- ----------
791,190 1,129,820
Less current portion of long-term debt.................. 2,830 64,430
-------- ----------
Long-term debt.......................................... $788,360 $1,065,390
-------- ----------
-------- ----------

In 1993, the Company entered into a new $675 million revolving credit
agreement with a group of banks, replacing its prior bank credit agreement
(which had consisted of a revolving credit facility and a bank term loan at
December 31, 1992). Amounts outstanding under the revolving credit agreement are
due in January, 1997; however, under certain circumstances, the due date may be
extended to July, 1998. The interest rates applicable to the revolving credit
agreement are principally at alternative floating rates provided for in the
agreement (approximately four percent at December 31, 1993).

The revolving credit agreement requires the maintenance of a specified
level of shareholders' equity, with limitations on the ratio of senior debt to
earnings, long-term debt (at December 31, 1993 additional borrowing capacity of
approximately $380 million was available under this agreement), intangible
assets and the acquisition of Company Capital Stock. Under the most restrictive
of these provisions, $120 million of retained earnings was available at December
31, 1993 for the payment of cash dividends and the acquisition of Company
Capital Stock.

The 6% Convertible Subordinated Debentures were converted into Company
Common Stock in late 1993 (see "Shareholders' Equity" note).

The senior subordinated notes contain limitations on the payment of cash
dividends and the acquisition of Company Capital Stock. In late 1993, the
Company called for redemption, on February 1, 1994, the $250 million of 10 1/4%
Senior Subordinated Notes. During 1992, the Company repurchased, in open-market
transactions, approximately $67 million of its 10% Senior Subordinated Notes at
prices approximating face value.

In early 1994, the Company issued, in a public offering, $345 million of
4 1/2% Convertible Subordinated Debentures due December 15, 2003. These
debentures are convertible into Company Common Stock at $31 per share. The net
proceeds were used to redeem the $250 million of 10 1/4% Subordinated Notes
(called in late 1993 for redemption on February 1, 1994) and to reduce other
indebtedness. In the fourth quarter of 1993, the Company recognized a $5.8
million pre-tax extraordinary charge ($3.7 million after-tax) related to the
call premium (1.25%) and unamortized prepaid debenture expense associated with
the call for early extinguishment of the $250 million of 10 1/4% Subordinated
Notes. The 10 1/4% Subordinated Notes are classified as non-current as the
Company had the intent and the ability to maintain these borrowings on a
long-term basis (due to the issuance of the

F-20
62

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4 1/2% Convertible Subordinated Debentures). The maturities of long-term debt
during the next five years are as follows (in millions): 1994 -- $3;
1995 -- $234; 1996 -- $1; 1997 -- $303; and 1998 -- $0.

SHAREHOLDERS' EQUITY:

(IN THOUSANDS)
CUMULATIVE
PREFERRED COMMON PAID-IN RETAINED TRANSLATION SHAREHOLDERS'
STOCK STOCK CAPITAL EARNINGS ADJUSTMENTS EQUITY
--------- -------- -------- -------- ----------- ------------

Balance, January 1, 1991...... $ 780 $ 59,450 $ 83,800 $192,100 $19,880 $ 356,010
Net (loss).................. -- -- -- (8,970) -- (8,970)
Preferred stock dividends... -- -- -- (9,600) -- (9,600)
Adjustment related to sale
of foreign operations.... -- -- -- -- (5,130) (5,130)
Translation adjustments,
net...................... -- -- -- -- (5,620) (5,620)
--------- -------- -------- -------- ----------- ------------
Balance, December 31, 1991.... 780 59,450 83,800 173,530 9,130 326,690
Net income.................. -- -- -- 38,430 -- 38,430
Preferred stock dividends... -- -- -- (9,300) -- (9,300)
Translation adjustments,
net...................... -- -- -- -- (3,080) (3,080)
Exercise of stock options... -- 70 590 -- -- 660
--------- -------- -------- -------- ----------- ------------
Balance, December 31, 1992.... 780 59,520 84,390 202,660 6,050 353,400
Net income.................. -- -- -- 47,600 -- 47,600
Preferred stock dividends... -- -- -- (14,930) -- (14,930)
Common stock dividends...... -- -- -- (3,210) -- (3,210)
Retirement of 12%
Preferred................ (780) -- (76,720) -- -- (77,500)
Issuance of 10% Preferred... 1,000 -- 99,000 -- -- 100,000
Issuance of warrants........ -- -- 70,800 -- -- 70,800
Issuance of DECS............ 10,800 -- 198,720 -- -- 209,520
Retirement of common
stock.................... -- (10,000) (90,000) -- -- (100,000)
Retirement of 10%
Preferred................ (1,000) -- (99,000) -- -- (100,000)
Conversion of convertible
debentures............... -- 10,370 174,120 -- -- 184,490
Translation adjustments,
net...................... -- -- -- -- (9,140) (9,140)
Exercise of stock options... -- 620 5,980 -- -- 6,600
--------- -------- -------- -------- ----------- ------------
Balance, December 31, 1993.... $10,800 $ 60,510 $367,290 $232,120 $(3,090) $ 667,630
--------- -------- -------- -------- ----------- ------------
--------- -------- -------- -------- ----------- ------------

On March 31, 1993, the Company acquired from Masco Corporation 10 million
shares of Company Common Stock, recorded at $100 million, $77.5 million of the
Company's previously outstanding 12% Exchangeable Preferred Stock, and Masco
Corporation's holdings of Emco Limited common stock and convertible debentures,
recorded at $80.8 million. In exchange, Masco Corporation received $100 million
(liquidation value) of the Company's 10% Exchangeable Preferred Stock,
seven-year warrants to purchase 10 million shares of Company Common Stock at $13
per share, recorded at $70.8 million, and $87.5 million in cash. The
transferable warrants are not exercisable by Masco Corporation if an exercise
would increase Masco Corporation's common equity ownership interest in the
Company above 35 percent. The cash portion of this transaction is included in
the accompanying statement of cash flows as cash used for investing activities
of $87.5 million. As part of this transaction, as modified in late 1993, Masco
Corporation agreed to purchase from the Company, at the Company's option

F-21
63

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

through March, 1997, up to $200 million of subordinated debentures. In late
1993, the Company redeemed the 10% Exchangeable Preferred Stock for its $100
million liquidation value.

In July, 1993, the Company issued 10.8 million shares of 6% Dividend
Enhanced Convertible Stock (DECS) at $20 per share ($216 million aggregate
liquidation amount) in a public offering (classified as Convertible Preferred
Stock). The net proceeds from this issuance were used to reduce the Company's
indebtedness. On July 1, 1997, each of the then outstanding shares of the DECS
will convert into one share of Company Common Stock, if not previously redeemed
by the Company or converted at the option of the holder, in both cases for
Company Common Stock.

Each share of the DECS is convertible at the option of the holder anytime
prior to July 1, 1997 into .806 of a share of Company Common Stock, equivalent
to a conversion price of $24.81 per share of Company Common Stock. Dividends are
cumulative and each share of the DECS has 4/5 of a vote, voting together as one
class with holders of Company Common Stock.

Beginning July 1, 1996, the Company, at its option, may redeem the DECS at
a call price payable in shares of Company Common Stock principally determined by
a formula based on the then current market price of Company Common Stock.
Redemption by the Company, as a practical matter, will generally not result in a
call price that exceeds one share of Company Common Stock or is less than .806
of a share of Company Common Stock (resulting from the holder's conversion
option).

The Company's 6% Convertible Subordinated Debentures were called for
redemption in late 1993. Substantially all holders, including Masco Corporation,
exercised their right to convert these debentures into Company Common Stock (at
a conversion price of $18 per share), resulting in the issuance of approximately
10.4 million shares of Company Common Stock.

The Company's consideration for a 1987 acquisition included two million
shares of Company Common Stock which were subject to a stock value guarantee
agreement. During the second quarter of 1993, the Company's stock value
guarantee obligation was settled, resulting in no material financial impact to
the Company.

The Company commenced paying cash dividends on its Common Stock in August,
1993 and declared three and paid two quarterly dividends in 1993, each in the
amount of $.02 per common share.

STOCK OPTIONS AND AWARDS:

For the three years ended December 31, 1993, stock option data pertaining
to stock option plans for key employees of the Company and affiliated companies
are as follows:

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1993 1992 1991
------ ------- ------

Options outstanding, January 1................................. 4,540 3,770 2,220
Options granted................................................ 30 900 1,730
Option price per share.................................... $13-26 $6 1/8-10 3/4 $4 1/2
Options cancelled.............................................. -- 60 180
Option price per share.................................... -- $4 1/2 $4 1/2-9 1/8
Options exercised.............................................. 760 70 --
Option price per share.................................... $4 1/2-9 1/8 $9 1/8 --
------------ ------------- ------------
Options outstanding, December 31............................... 3,810 4,540 3,770
------------ ------------- ------------
------------ ------------- ------------
Options exercisable, December 31............................... 680 880 740
------------ ------------- ------------
------------ ------------- ------------

F-22
64

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1993, options have been granted and are outstanding with
exercise prices ranging from $4 1/2 to $26 per share, the fair market value at
the dates of grant.

Pursuant to restricted stock incentive plans, the Company granted long-term
incentive awards, net, for 202,000, 251,000 and 675,000 shares of Company Common
Stock during 1993, 1992 and 1991, respectively, to key employees of the Company
and affiliated companies. The unamortized costs of incentive awards, aggregating
approximately $20 million at December 31, 1993, are being amortized over the
ten-year vesting periods.

At December 31, 1993 and 1992, a combined total of 5,631,000 and 5,759,000
shares, respectively, of Company Common Stock were available for the granting of
options and incentive awards under the above plans.

EMPLOYEE BENEFIT PLANS:

Pension and Profit-Sharing Benefits. The Company sponsors defined-benefit
pension plans for most of its employees. In addition, substantially all salaried
employees participate in noncontributory profit-sharing plans, to which payments
are approved annually by the Directors. Aggregate charges to income under these
plans were $10.9 million in 1993, $10.3 million in 1992 and $8.3 million in
1991, including approximately $.9 million in each year related to discontinued
operations.

Net periodic pension cost for the Company's defined-benefit pension plans
includes the following components for the three years ended December 31, 1993:

(IN THOUSANDS)
1993 1992 1991
------- ------- -------

Service cost -- benefits earned during the year.... $ 4,110 $ 4,150 $ 4,140
Interest cost on projected benefit obligations..... 5,540 5,090 4,590
Actual return on assets............................ (7,730) (3,820) (5,450)
Net amortization and deferral...................... 1,600 (1,800) 430
------- ------- -------
Net periodic pension cost.......................... $ 3,520 $ 3,620 $ 3,710
------- ------- -------
------- ------- -------

Major assumptions used in accounting for the Company's defined-benefit
pension plans are as follows:

1993 1992 1991
----- ------ ------

Discount rate for obligations........................ 7.0% 8.25% 8.25%
Rate of increase in compensation levels.............. 5.0% 6.0 % 6.0 %
Expected long-term rate of return on plan assets..... 13.0% 13.0 % 13.0 %

F-23
65

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The funded status of the Company's defined-benefit pension plans at
December 31, 1993 and 1992 is as follows:

(IN THOUSANDS)
1993 1992
-------------------------- --------------------------
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
RECONCILIATION OF FUNDED STATUS BENEFITS ASSETS BENEFITS ASSETS
- -------------------------------------------- ----------- ----------- ----------- -----------

Actuarial present value of benefit
obligations:
Vested benefit obligation.............. $23,040 $ 34,280 $20,780 $24,160
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Accumulated benefit obligation......... $24,450 $ 38,650 $22,120 $31,200
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Projected benefit obligation........... $35,270 $ 39,920 $32,020 $33,030
Assets at fair value........................ 29,550 26,560 27,530 23,570
----------- ----------- ----------- -----------
Projected benefit obligation in excess
of plan assets....................... (5,720) (13,360) (4,490) (9,460)
Reconciling items:
Unrecognized net loss.................. 7,140 8,810 5,920 5,140
Unrecognized prior service cost........ 460 3,250 1,240 3,400
Unrecognized net (asset) obligation at
transition........................... (1,340) (160) (1,940) 70
Adjustment required to recognize
minimum liability.................... -- (10,840) -- (6,900)
----------- ----------- ----------- -----------
(Accrued) prepaid pension cost......... $ 540 $ (12,300) $ 730 $(7,750)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

Postretirement Benefits. The Company provides postretirement medical and
life insurance benefits for certain of its active and retired employees.

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions" ("SFAS 106") for its postretirement benefit plans. This
statement requires the accrual method of accounting for postretirement health
care and life insurance based on actuarially determined costs to be recognized
over the period from the date of hire to the full eligibility date of employees
who are expected to qualify for such benefits. In conjunction with the adoption
of SFAS 106, the Company elected to recognize the transition obligation on a
prospective basis and accordingly, the net transition obligation is being
amortized over 20 years. Net periodic postretirement benefit cost includes the
following components for the year ended December 31, 1993:

(IN THOUSANDS)
1993
-------

Service cost.......................................................... $ 300
Interest cost......................................................... 1,900
Net amortization...................................................... 1,200
-------
Net periodic postretirement benefit cost.............................. $3,400
-------
-------

The incremental cost in 1993 of accounting for postretirement health care
and life insurance benefits under SFAS 106 amounted to approximately $1.7
million.

F-24
66

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Postretirement benefit obligations, none of which are funded, are
summarized as follows for the year ended December 31:

(IN THOUSANDS)
1993
------------

Accumulated postretirement benefit obligations:
Retirees.............................................................. $ 19,400
Fully eligible active plan participants............................... 1,400
Other active participants............................................. 6,400
------------
Total accumulated postretirement benefit obligation..................... 27,200
Unrecognized net loss................................................. (2,900)
Unamortized transition obligation..................................... (22,500)
------------
Accrued postretirement benefits......................................... $ 1,800
------------
------------

The discount rate used in determining the accumulated postretirement
benefit obligation was seven percent. The assumed health care cost trend rate in
1993 was 12 percent, decreasing to an ultimate rate in the year 2000 of seven
percent. If the assumed medical cost trend rates were increased by one percent,
the accumulated postretirement benefit obligation would increase by $2.6 million
and the aggregate of the service and interest cost components of net periodic
postretirement benefit cost would increase by $.2 million.

SEGMENT INFORMATION:

The Company's business segments involve the production and sale of the
following:

Transportation-Related Products:

Precision products, generally produced using advanced
metalworking technologies with significant proprietary content,
and aftermarket products for the transportation industry.

Specialty Products:

Architectural -- Doors, windows, security grilles and office
panels and partitions for commercial and
residential markets.

Other -- Products manufactured principally for the defense
industry.

Amounts related to the Company's Energy-related segment have been presented
as discontinued operations.

Corporate assets consist primarily of cash and cash investments, equity and
other investments in affiliates and notes receivable.

F-25
67

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(IN THOUSANDS)
ASSETS EMPLOYED
NET SALES OPERATING PROFIT (B) AT DECEMBER 31
---------------------------------- ---------------------------- ----------------------------------
1993 1992 1991 1993 1992 1991 1993 1992 1991
---------- ---------- ---------- -------- -------- -------- ---------- ---------- ----------

The Company's operations
by industry segment are:
Transportation-Related
Products (A)............ $1,195,000 $1,058,000 $ 874,000 $160,000 $124,000 $ 74,000 $ 883,000 $ 851,000 $ 808,000
Specialty Products:
Architectural........... 289,000 291,000 273,000 (4,000) 2,000 (16,000) 313,000 321,000 322,000
Other................... 99,000 106,000 119,000 5,000 3,000 1,000 104,000 109,000 114,000
---------- ---------- ---------- -------- -------- -------- ---------- ---------- ----------
Total............. $1,583,000 $1,455,000 $1,266,000 161,000 129,000 59,000 1,300,000 1,281,000 1,244,000
---------- ---------- ----------
---------- ---------- ----------
Other expense, net........ (25,000) (44,000) (56,000)
General corporate
expense................. (15,000) (17,000) (15,000)
-------- -------- --------
Income (loss) from
continuing operations
before income taxes
(credit) and
extraordinary loss...... $121,000 $ 68,000 $(12,000)
-------- -------- --------
-------- -------- --------
Corporate assets.......... 422,000 318,000 449,000
Discontinued operations... 68,000 208,000 210,000
---------- ---------- ----------
Total assets...... $1,790,000 $1,807,000 $1,903,000
---------- ---------- ----------
---------- ---------- ----------

PROPERTY ADDITIONS DEPRECIATION AND AMORTIZATION
---------------------------- ----------------------------------
1993 1992 1991 1993 1992 1991
-------- -------- -------- ---------- ---------- ----------

The Company's operations by industry segment are:
Transportation-Related Products.......................... $52,000 $47,000 $37,000 $42,000 $42,000 $41,000
Specialty Products:
Architectural.......................................... 5,000 8,000 8,000 12,000 13,000 12,000
Other.................................................. 3,000 5,000 4,000 6,000 5,000 6,000
Total............................................ $60,000 $60,000 $49,000 $60,000 $60,000 $59,000

- ---------------
(A) Included within this segment are sales to one customer of $324 million, $268
million and $217 million in 1993, 1992 and 1991, respectively; sales to
another customer of $222 million, $216 million and $201 million in 1993,
1992 and 1991, respectively; and sales to a third customer of $186 million,
$184 million and $126 million in 1993, 1992 and 1991, respectively.

(B) Included in 1991 operating profit (principally Transportation-Related
Products and Architectural Products) are charges of $27 million to reflect
the expenses related to the discontinuance of product lines, and the costs
of restructuring several businesses. Other expense, net in 1992 and 1991,
includes approximately $15 million and $14 million, respectively, to reflect
disposition costs related to idle facilities and other long-term assets.

F-26
68

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER INCOME (EXPENSE), NET:

(IN THOUSANDS)
1993 1992 1991
------- ------- --------

Other, net:
Gains from sales of marketable securities
(including the effect of valuation
allowances).................................. $11,550 $ 4,020 $ 12,010
Interest income................................. 9,570 9,260 7,890
Dividend income................................. 3,150 1,750 1,910
Other, net...................................... 2,060 (5,080) (16,280)
------- ------- --------
$26,330 $ 9,950 $ 5,530
------- ------- --------
------- ------- --------

Gains realized from sales of marketable securities are determined on a
specific identification basis at the time of sale.

INCOME TAXES:

(IN THOUSANDS)
1993 1992 1991
-------- -------- --------

Income (loss) from continuing operations before
income taxes (credit) and extraordinary loss:
Domestic...................................... $105,470 $ 57,880 $(34,780)
Foreign....................................... 15,710 10,370 22,310
-------- -------- --------
$121,180 $ 68,250 $(12,470)
-------- -------- --------
-------- -------- --------
Provision for income taxes:
Federal, current.............................. $ 17,940 $ 12,750 $(19,410)
State and local............................... 8,350 5,170 4,560
Foreign....................................... 8,410 8,160 9,460
Deferred, principally federal................. 15,590 3,130 3,270
-------- -------- --------
Income taxes (credit) on income (loss) from
continuing operations before income taxes
(credit) and extraordinary loss............ $ 50,290 $ 29,210 $ (2,120)
-------- -------- --------
-------- -------- --------

F-27
69

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The components of the net deferred taxes as at December 31, 1993 were as
follows:

(IN THOUSANDS)
1993
--------

Deferred tax assets:
Charges for restructuring and other costs, net................... $ 7,450
Inventory........................................................ 8,430
Other, principally deductions reported in different periods for
financial reporting and tax purposes.......................... 18,330
--------
34,210
--------
Deferred tax liabilities:
Depreciation and amortization.................................... 90,350
Other, principally equity in undistributed earnings of
affiliates.................................................... 18,450
--------
108,800
--------
Net deferred tax liability....................................... $ 74,590
--------
--------

The following is a reconciliation of tax computed at the U.S. federal
statutory rate to the provision for income taxes (credit) allocated to income
(loss) from continuing operations before income taxes (credit) and extraordinary
loss:

(IN THOUSANDS)
1993 1992 1991
------- ------- -------

U.S. federal statutory rate........................ 35% 34% 34%
Tax (credit) at U.S. federal statutory rate........ $42,410 $23,210 $(4,240)
State and local taxes, net of federal tax
benefit.......................................... 5,430 3,390 3,030
Higher effective foreign tax rate.................. 2,910 4,670 1,870
U.S. tax benefit relating to foreign operations.... (90) (190) (2,000)
Dividends-received deduction....................... (2,290) (2,320) (2,360)
Amortization in excess of tax, net................. 3,820 4,780 4,210
Other, net......................................... (1,900) (4,330) (2,630)
------- ------- -------
Income taxes (credit) on income (loss) from
continuing operations before income taxes
(credit) and extraordinary loss............... $50,290 $29,210 $(2,120)
------- ------- -------
------- ------- -------

Provisions for deferred income taxes by temporary difference components for
the years ended December 31, 1992 and 1991 were as follows:

(IN THOUSANDS)
1992 1991
------- -------

Accelerated depreciation and amortization.................. $ 4,060 $ 550
Marketable securities valuation............................ (970) 4,660
Charges for restructuring and other costs, net............. (2,350) (1,300)
Deductions reported in different periods for financial
reporting and tax purposes............................... 60 (5,770)
Alternative minimum tax.................................... 680 5,180
Other, net................................................. 1,650 (50)
------- -------
$ 3,130 $ 3,270
------- -------
------- -------

F-28
70

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS:

In accordance with Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments," the following methods
were used to estimate the fair value of each class of financial instruments:

Notes Receivable and Other Assets. Fair values of financial instruments
included in notes receivable and other assets were estimated using various
methods including quoted market prices and discounted future cash flows based on
the incremental borrowing rates for similar types of investments. In addition,
for variable-rate notes receivable that fluctuate with the prime rate, the
carrying amounts approximate fair value.

Long-Term Debt. The carrying amount of bank debt and certain other
long-term debt instruments approximate fair value as the floating rates inherent
in this debt reflect changes in overall market interest rates. The fair values
of the Company's subordinated debt instruments are based on quoted market
prices. The fair values of certain other debt instruments are estimated by
discounting future cash flows based on the Company's incremental borrowing rate
for similar types of debt instruments.

The carrying amounts and fair values of the Company's financial instruments
at December 31, 1993 and 1992 are as follows:

(IN THOUSANDS)
1993 1992
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------

Cash and cash investments............. $ 83,200 $ 83,200 $ 76,000 $ 76,000
Notes receivable and other assets..... $ 72,650 $ 80,220 $ 60,150 $ 68,050
Long-term debt:
Bank debt........................... $295,000 $295,000 $441,090 $441,090
6% Convertible Subordinated -- -- $186,890 $160,730
Debentures.......................
10% Senior Subordinated Notes....... $233,150 $243,640 $233,150 $237,230
10 1/4% Senior Subordinated Notes... $250,000 $254,380 $250,000 $251,880
Other long-term debt................ $ 9,120 $ 9,150 $ 10,780 $ 10,780

F-29
71

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INTERIM AND OTHER SUPPLEMENTAL FINANCIAL DATA (UNAUDITED):

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
FOR THE QUARTERS ENDED
----------------------------------------------------------
DECEMBER 31ST SEPTEMBER 30TH JUNE 30TH MARCH 31ST
------------- -------------- --------- ----------

1993:
----
Net sales..................... $ 392,600 $373,680 $ 412,530 $404,070
Gross profit.................. $ 76,440 $ 78,600 $ 85,610 $ 84,750
Income from continuing
operations before
extraordinary loss:
Income...................... $ 18,510 $ 15,000 $ 21,310 $ 16,070
Per common and common
equivalent share:
Primary.................. $.23 $.17 $.34 $.22
Assuming full dilution... $.22 $.17 $.31 $.22
Net income (loss):
Income (loss)............... $ (6,980) $ 15,320 $ 21,740 $ 17,520
Income (loss) attributable
to common stock.......... $ (11,660) $ 9,900 $ 19,240 $ 15,190
Per common and common
equivalent share:
Primary.................. $(.20) $.18 $.35 $.25
Assuming full dilution... $(.15) $.18 $.32 $.24
Market price per common share:
High........................ $28 1/8 $22 5/8 $21 $17 1/4
Low......................... $18 3/4 $19 1/2 $15 3/4 $11 3/8

1992:
----
Net sales..................... $ 377,790 $358,240 $ 381,470 $337,820
Gross profit.................. $ 70,560 $ 76,320 $ 79,340 $ 70,050
Income from continuing
operations:
Income...................... $ 7,190 $ 10,300 $ 13,510 $ 8,040
Per common and common
equivalent share......... $.08 $.13 $.18 $.10
Net income:
Income...................... $ 8,480 $ 9,640 $ 12,020 $ 8,290
Income attributable to
common stock............. $ 6,160 $ 7,310 $ 9,700 $ 5,960
Per common and common
equivalent share......... $.10 $.12 $.16 $.10
Market price per common share:
High........................ $12 1/8 $13 5/8 $13 7/8 $11
Low......................... $8 3/8 $10 3/8 $8 5/8 $4 3/4

F-30
72

MASCOTECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Certain amounts presented above have been reclassified to present a segment
of the Company's business as discontinued operations (see "Discontinued
Operations" note).

Results for the second quarters of 1993 and 1992 include pre-tax income of
approximately $9 million and $25 million, respectively, as a result of gains
associated with the sale of common stock through public offerings by equity
affiliates and, in 1992, a prepayment premium related to the redemption of
debentures held by the Company. This income was largely offset by costs and
expenses related to cost reduction initiatives, the restructuring of certain
operations and product lines, adjustments to the carrying value of certain
long-term assets, and other costs and expenses.

Results for the third quarter of 1993 were reduced by a charge of
approximately $.04 per common share reflecting the recently increased 1993
federal corporate income tax rate.

The fourth quarter of 1993 net loss includes the effect of a $5.8 million
pre-tax extraordinary charge ($3.7 million after-tax or $.06 per common share)
related to the early extinguishment of subordinated debt (see "Long-Term Debt"
note). The fourth quarter of 1993 net loss also includes an after-tax charge of
approximately $22 million ($.38 per common share) related to the disposition of
a segment of the Company's business (see "Discontinued Operations" note).

The 1993 results include the benefit of approximately $11.5 million pre-tax
income ($6.7 million after-tax or $.12 per common share), primarily in the third
and fourth quarters, resulting from net gains from sales of marketable
securities.

The 1992 results include the benefit of approximately $4 million pre-tax
income ($2 million after-tax or $.04 per common share), primarily in the fourth
quarter, resulting from net gains from sales of marketable securities.

The 1993 income (loss) per common share amounts for the quarters do not
total to the full year amounts due to the changes in the number of common shares
outstanding during the year and the dilutive effect of first, second and third
quarter 1993 results.

The calculation of earnings per common and common equivalent share for the
fourth quarter of 1993 results in dilution for income from continuing
operations, assuming full dilution. Therefore, the fully diluted earnings per
share computation is used for all computations, even though the result is
anti-dilutive for one of the per share amounts.

F-31
73

MASCOTECH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONCLUDED)

The following supplemental unaudited financial data combine the Company
with Masco Capital Corporation (through date of disposition) and TriMas and have
been presented for analytical purposes. The Company had a common equity
ownership interest in TriMas of approximately 43 percent at December 31, 1993
and 28 percent at December 31, 1992. The interests of the other common
shareholders are reflected below as "Equity of other shareholders of TriMas."
All significant intercompany transactions have been eliminated.

(IN THOUSANDS)
AT DECEMBER 31
--------------------------
1993 1992
----------- -----------

Current assets...................................... $ 770,810 $ 813,570
Current liabilities................................. (252,810) (334,790)
----------- -----------
Working capital..................................... 518,000 478,780
Property and equipment, net......................... 652,420 682,310
Excess of cost over net assets of acquired
companies......................................... 526,260 591,330
Other assets........................................ 298,290 145,710
Bank and other debt................................. (1,027,250) (1,243,880)
Deferred income taxes and other long-term
liabilities....................................... (161,500) (196,420)
Equity of other shareholders of TriMas.............. (138,590) (104,430)
----------- -----------
Equity of shareholders of MascoTech................. $ 667,630 $ 353,400
----------- -----------
----------- -----------

FOR THE YEARS ENDED DECEMBER 31
----------------------------------------
1993 1992 1991
---------- ----------- -----------

Net sales................................ $2,022,240 $ 1,841,570 $ 1,604,180
---------- ----------- -----------
---------- ----------- -----------
Operating profit......................... $ 215,740 $ 170,460 $ 86,260
---------- ----------- -----------
---------- ----------- -----------
Income (loss) from continuing operations
before extraordinary loss.............. $ 70,890 $ 39,040 $ (10,350)
---------- ----------- -----------
---------- ----------- -----------

F-32
74

MASCOTECH, INC.

FINANCIAL STATEMENT SCHEDULES

PURSUANT TO ITEM 14(A)(2) OF FORM 10-K

ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION

FOR THE YEAR ENDED DECEMBER 31, 1993

MASCOTECH, INC.

FINANCIAL STATEMENT SCHEDULES

Schedules, as required for the years ended December 31, 1993, 1992 and 1991:

II. Amounts Receivable From Related Parties and Underwriters, Promoters, and
Employees Other than Related Parties............................................ F-34
V. Property, Plant and Equipment................................................... F-35
VI. Accumulated Depreciation, Depletion and Amortization of Property, Plant and
Equipment..................................................................... F-36
VIII. Valuation and Qualifying Accounts............................................... F-37
X. Supplementary Income Statement Information...................................... F-38

F-33
75

MASCOTECH, INC.
SCHEDULE II. AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ----------------------- ------------ ---------- ------------------------- -------------------------
DEDUCTIONS BALANCE AT END OF PERIOD
------------------------- -------------------------
BALANCE AT
BEGINNING OF AMOUNTS AMOUNTS
NAME OF DEBTOR PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT NOT CURRENT
- ----------------------- ------------ ---------- ---------- ----------- ----------- -----------
(A) (B)

Erwin H. Billig........ $ 2,800,000 $ 160,000 $ 900,000 -- $ 2,060,000 --
------------ ---------- ---------- ----------- ----------- -----------
Lee M. Gardner......... 840,000 50,000 890,000 -- -- --
------------ ---------- ---------- ----------- ----------- -----------
James W. Hook.......... 280,000 20,000 -- -- 300,000 --
------------ ---------- ---------- ----------- ----------- -----------
Richard A. Manoogian... 11,210,000 630,000 -- -- 11,840,000 --
------------ ---------- ---------- ----------- ----------- -----------
Timothy Wadhams........ 1,680,000 90,000 1,770,000 -- -- --
------------ ---------- ---------- ----------- ----------- -----------
16,810,000 950,000 3,560,000 -- 14,200,000 --
------------ ---------- ---------- ----------- ----------- -----------
Discount on Notes
Receivable(C)........ (890,000) 750,000 -- -- (140,000) --
------------ ---------- ---------- ----------- ----------- -----------
$ 15,920,000 $1,700,000 $3,560,000 -- $14,060,000 --
------------ ---------- ---------- ----------- ----------- -----------
------------ ---------- ---------- ----------- ----------- -----------

NOTES:

(A) Represents accrual of interest.

(B) Amounts receivable (including interest of $3,400,000) from employees are due
June 30, 1994. The stated rate of interest is 7%.

(C) Represents the discount pertaining to the difference between the stated rate
of interest of 7% and the effective rate of interest of approximately 9%.
Activity in 1992 includes discount amortization of $550,000 interest of
$710,000 and the cancellation of the receivable balance of $1,350,000 for
an exempt employee.
Activity in 1991 includes discount amortization of $340,000 and interest of
$1,040,000.

F-34
76

MASCOTECH, INC.

SCHEDULE V. PROPERTY, PLANT AND EQUIPMENT

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ---------------------------------- ------------ ----------- ----------- ------------ ----------
BALANCE AT OTHER BALANCE
BEGINNING ADDITIONS CHARGES AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS ADD (DEDUCT) OF PERIOD
- ---------------------------------- ------------ ----------- ----------- ------------ ---------
(A) (B) (C)

1993:
Land and land improvements...... $ 39,740,000 $ 250,000 $ 1,830,000 $ (4,440,000) $ 33,720,000
Buildings....................... 182,460,000 4,690,000 4,170,000 (24,220,000) 158,760,000
Machinery and equipment......... 580,030,000 12,460,000 13,590,000 (67,800,000) 511,100,000
Office, delivery and other
equipment.................... 57,200,000 2,890,000 2,650,000 (12,390,000) 45,050,000
Construction in progress........ 32,570,000 39,250,000 420,000 (21,960,000) 49,440,000
------------ ----------- ------------ ------------- ------------
$892,000,000 $59,540,000 $ 22,660,000 $(130,810,000) $798,070,000
------------ ----------- ------------ ------------- ------------
------------ ----------- ------------ ------------- ------------
1992:
Land and land improvements...... $ 39,470,000 $ 250,000 $ 80,000 $ 100,000 $ 39,740,000
Buildings....................... 180,580,000 3,170,000 1,380,000 90,000 182,460,000
Machinery and equipment......... 557,620,000 26,140,000 17,610,000 13,880,000 580,030,000
Office, delivery and other
equipment.................... 54,160,000 5,150,000 4,700,000 2,590,000 57,200,000
Construction in progress........ 21,170,000 33,750,000 600,000 (21,750,000) 32,570,000
------------ ----------- ------------ ------------- ------------
$853,000,000 $68,460,000 $ 24,370,000 $ (5,090,000) $892,000,000
------------ ----------- ------------ ------------- ------------
------------ ----------- ------------ ------------- ------------
1991:
Land and land improvements...... $ 41,190,000 $ 460,000 $ 5,470,000 $ 3,290,000 $ 39,470,000
Buildings....................... 189,250,000 11,140,000 25,360,000 5,550,000 180,580,000
Machinery and equipment......... 560,550,000 46,360,000 69,770,000 20,480,000 557,620,000
Office, delivery and other
equipment.................... 55,860,000 7,310,000 8,920,000 (90,000) 54,160,000
Construction in progress........ 24,560,000 19,370,000 1,540,000 (21,220,000) 21,170,000
------------ ----------- ------------ ------------- ------------
$871,410,000 $84,640,000 $111,060,000 $ 8,010,000 $853,000,000
------------ ----------- ------------ ------------- ------------
------------ ----------- ------------ ------------- ------------

NOTES:
(A) Includes property, plant and equipment additions of $20 million in 1991
obtained through the acquisition of companies.

(B) Includes property, plant and equipment from the disposition of certain
operations in 1991.

(C) Adjustments and reclassifications to present the Energy-related segment as
discontinued operations in 1993, and the effect of foreign currency
translation.

F-35
77

MASCOTECH, INC.

SCHEDULE VI. ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------------- ------------ ----------- ----------- ------------ ------------
ADDITIONS
BALANCE AT CHARGED TO OTHER BALANCE
BEGINNING COSTS AND CHANGES AT END
CLASSIFICATION OF PERIOD EXPENSES RETIREMENTS ADD (DEDUCT) OF PERIOD
-------------- ------------ ----------- ----------- ------------ ------------
(A) (B)

1993:
Land improvements........... $ 2,520,000 $ 250,000 $ 10,000 $ (200,000) $ 2,560,000
Buildings................... 43,970,000 4,620,000 940,000 (9,230,000) 38,420,000
Machinery and equipment..... 275,960,000 29,450,000 8,440,000 (56,500,000) 240,470,000
Office, delivery and other
equipment................ 32,130,000 4,990,000 2,140,000 (8,550,000) 26,430,000
------------ ----------- ----------- ------------ ------------
$354,580,000 $39,310,000 $11,530,000 $(74,480,000) $307,880,000
------------ ----------- ----------- ------------ ------------
------------ ----------- ----------- ------------ ------------
1992:
Land improvements........... $ 2,310,000 $ 250,000 $ 20,000 $ (20,000) $ 2,520,000
Buildings................... 39,280,000 5,490,000 150,000 (650,000) 43,970,000
Machinery and equipment..... 255,500,000 34,810,000 11,100,000 (3,250,000) 275,960,000
Office, delivery and other
equipment................ 29,680,000 5,770,000 4,170,000 850,000 32,130,000
------------ ----------- ----------- ------------ ------------
$326,770,000 $46,320,000 $15,440,000 $ (3,070,000) $354,580,000
------------ ----------- ----------- ------------ ------------
------------ ----------- ----------- ------------ ------------
1991:
Land improvements........... $ 2,430,000 $ 280,000 $ 350,000 $ (50,000) $ 2,310,000
Buildings................... 38,410,000 4,890,000 6,910,000 2,890,000 39,280,000
Machinery and equipment..... 246,200,000 35,090,000 32,350,000 6,560,000 255,500,000
Office, delivery and other
equipment................ 28,370,000 7,210,000 6,170,000 270,000 29,680,000
------------ ----------- ----------- ------------ ------------
$315,410,000 $47,470,000 $45,780,000 $ 9,670,000 $326,770,000
------------ ----------- ----------- ------------ ------------
------------ ----------- ----------- ------------ ------------

Notes:

(A) Includes accumulated depreciation of property, plant and equipment from
the disposition of operations in 1991.

(B) Adjustments and reclassifications to present the Energy-related segment as
discontinued operations in 1993, and the effect of foreign currency
translation.

F-36
78

MASCOTECH, INC.

SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------- ---------- --------------------------- ---------- -------------
ADDITIONS
---------------------------
CHARGED
BALANCE AT CHARGED TO (CREDITED)
BEGINNING COSTS AND TO OTHER BALANCE AT
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS END OF PERIOD
- -------------------------------- ---------- ------------ ---------- ---------- -------------
(A) (B)

Allowance for doubtful accounts,
deducted from accounts
receivable in the balance
sheet:
1993.......................... $7,190,000 $2,470,000 $(1,820,000) $2,710,000 $ 5,130,000
---------- ------------ ----------- ---------- -------------
---------- ------------ ----------- ---------- -------------
1992.......................... $7,810,000 $3,040,000 -- $3,660,000 $ 7,190,000
---------- ------------ ----------- ---------- -------------
---------- ------------ ----------- ---------- -------------
1991.......................... $8,220,000 $7,730,000 $(2,800,000) $5,340,000 $ 7,810,000
---------- ------------ ----------- ---------- -------------
---------- ------------ ----------- ---------- -------------

Notes:

(A) Allowance of companies reclassified for discontinuance of Energy-related
segment in 1993, and other adjustments, net in 1991.

(B) Deductions, representing uncollectible accounts written off, less
recoveries of accounts written off in prior years.

F-37
79

MASCOTECH, INC.

SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION

FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991

COLUMN A COLUMN B
- ------------------------------------------------------ -----------------------------------------
CHARGED TO COSTS AND EXPENSES
-----------------------------------------
ITEM 1993 1992 1991
- ------------------------------------------------------ ----------- ----------- -----------

Maintenance and repairs............................... $46,070,000 $44,000,000 $41,100,000
----------- ----------- -----------
----------- ----------- -----------
Depreciation and amortization of intangible assets,
preoperating costs and similar deferrals:
Amortization of patents............................. $ 180,000 $ 180,000 $ 260,000
----------- ----------- -----------
----------- ----------- -----------
Amortization of deferred charges.................... $ 5,880,000 $ 6,730,000 $ 4,880,000
----------- ----------- -----------
----------- ----------- -----------
Amortization of excess of cost over net assets of
acquired companies............................... $14,540,000 $14,260,000 $14,500,000
----------- ----------- -----------
----------- ----------- -----------

Notes:

Other captions provided for under this schedule are excluded, as the
amounts related to such captions are not material.

Amounts reflect the reclassification of the Company's Energy-related
segment as discontinued operations.

F-38
80

EXHIBIT
NUMBER EXHIBIT INDEX
- ------- -----------------------------------------------------------------------------------

3.ii Bylaws of Masco Corporation, as amended.
4.d Indenture dated as of November 1, 1986 between Masco Industries, Inc. (now known as
MascoTech, Inc.) and Morgan Guaranty Trust Company of New York, as Trustee, and
Directors' resolutions establishing Masco Industries, Inc.'s 4 1/2% Convertible
Subordinated Debentures Due 2003.
4.f Credit Agreement dated as of September 2, 1993 by and among MascoTech, Inc., the
banks party thereto, and NBD Bank, N.A., as Agent, and Comerica Bank, The Bank of
New York, The First National Bank of Chicago, Morgan Guaranty Trust Company of New
York and NationsBank of North Carolina, N.A., as Co-Agents.
Note: Other instruments, notes or extracts from agreements defining the rights of holders
of long-term debt of Masco Corporation or its subsidiaries have not been filed
since (i) in each case the total amount of long-term debt permitted thereunder does
not exceed 10 percent of Masco Corporation's consolidated assets, and (ii) such
instruments, notes and extracts will be furnished by Masco Corporation to the
Securities and Exchange Commission upon request.
10.d Agreement between Masco Corporation and MascoTech, Inc. dated as of November 23,
1993 including an amendment to Stock Repurchase Agreement.
10.l MascoTech, Inc. 1991 Long-Term Stock Incentive Plan (Restated September 14, 1993).
10.m MascoTech, Inc. 1984 Restricted Stock Incentive Plan (Restated September 14, 1993).
10.n MascoTech, Inc. 1984 Stock Option Plan (Restated September 14, 1993).
10.o Masco Corporation Supplemental Executive Retirement and Disability Plan.
10.p Form of Agreement dated June 29, 1989 between Masco Corporation and certain of its
officers.
10.q Amended and Restated Securities Purchase Agreement dated as of November 23, 1993
between Masco Corporation and MascoTech, Inc., including form of Note.
10.r Registration Agreement dated as of March 31, 1993 between Masco Corporation and
Masco Industries, Inc. (now known as MascoTech, Inc.)
11 Computation of Primary and Fully Diluted Per Share Earnings.
12 Computation of Ratio of Earnings to Fixed Charges.
21 List of Subsidiaries.
23.a Consent of Coopers & Lybrand relating to Masco Corporation's Financial Statements
and Financial Statement Schedules.
23.b Consent of Coopers & Lybrand relating to MascoTech, Inc.'s Financial Statements and
Financial Statement Schedules.