Server: Microsoft-IIS/3.0 Date: Thu, 18 Dec 1997 02:03:24 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Thu, 01 May 1997 17:40:38 GMT Content-Length: 2886 MascoTech - Investor Information Continue from Page 1.

TO OUR SHAREHOLDERS

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Since our reported financial results include the operating results of businesses sold during 1996, the strong operating performance of our core Metalworking and Aftermarket Groups is not readily apparent. In 1996, these two groups had combined sales of approximately $870 million, an eight percent increase from 1995, and had a combined operating profit before general corporate expense of approximately $136 million, an increase of 17 percent. In addition, on a pro forma basis which assumes that all of the recent restructuring activity and the purchase of securities from Masco Corporation (discussed below) had been completed as of January 1, 1996, our earnings per common share for 1996 would have approximated $1.40.

Financial Position

Since 1994, our restructuring activity has resulted in the disposition of businesses with annual sales approximating $1 billion for which we have received proceeds of approximately $600 million. The cash portion of these proceeds has been applied to reduce the Company's indebtedness and to invest over $200 million in capital improvements and new technology for our core Metalworking and Aftermarket Groups.

In late 1996, we purchased from Masco Corporation 17 million shares of our common stock and warrants to acquire additional MascoTech shares; these securities have been retired. Although this transaction results in the additional near-term leverage of our balance sheet, we believe that the substantial reduction in our common shares outstanding should enhance long-term financial returns for our shareholders. A more detailed discussion of this transaction is attached here.

In early 1997, we finalized a new bank credit facility for $575 million which provides our Company with significant financial flexibility. Also contributing to our financial flexibility is the value of the Company's investments in publicly traded affiliates: TriMas Corporation; Titan Wheel International, Inc.; and Emco Limited. The market value of our investments in these affiliate companies approximated $500 million at December 31, 1996, compared with the Company's carrying value of approximately $230 million.

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