Fortune Brands, Inc. reported net income for the second quarter of 2003 was $176.7 million, or $1.18 per diluted share, as compared to $196.9 million, or $1.27 per diluted share, in the year-ago quarter. Results in both periods included net gains from tax-related credits that exceeded restructuring-related charges. Excluding the net gains in both years, diluted earnings per share were $1.03, up 16% from $0.89 a year ago, and 4 cents above the consensus estimate of Wall Street securities analysts.

Net sales were $1.58 billion, up 5% and operating income was $240 million, up 11%.

“Fortune Brands once again delivered very strong operating results in a quarter marked by lingering economic uncertainty and poor weather,” said Fortune Brands chairman & CEO Norm Wesley. “Our brand investments continued to pay off in hot new products and share gains in key markets. Were adding to that growth with our high-return strategic moves, expanded customer relationships and sustained improvements in productivity and asset returns. Notably in the quarter, our kitchen and bath cabinet brands fueled strong momentum and our Titleist, FootJoy and Cobra golf brands drove significant share gains. Our Jim Beam-ABSOLUT alliance underpinned steady results in spirits and wine and our aggressive cost reductions continue to drive the ongoing profit turnaround in our office products business.”

Double-Digit EPS Growth Outlook for Third Quarter & Full Year

“Fortune Brands is on track for another excellent full-year performance,” Wesley said. “The strength of our first half results combined with our great brands and successful strategy enhance our confidence that well achieve our long-term goals of double-digit EPS growth and improved returns for the full year. Were targeting double-digit growth in EPS for the third quarter, as well.” The company’s earnings goals exclude special charges and gains.

Net Gain from Special Items

The company’s second quarter 2003 results included an after-tax net gain of $22.7 million, or 15 cents per share. The net gain stems from a $35 million reversal of tax reserves resulting from the routine audit of Fortune Brands 1993-1996 tax returns, partly offset by $12.3 million in after-tax restructuring-related charges in the office products and golf businesses and identifiable intangible write-downs in the office products unit. In the second quarter of 2002, the company recorded an after-tax net gain of $58.4 million due to a $71.3 million tax refund related to utilization of a previously disallowed capital loss, partly offset by $12.9 million in after-tax restructuring-related charges in the office products business.

                         FORTUNE BRANDS, INC.
                   CONSOLIDATED STATEMENT OF INCOME
                (In millions, except per share amounts)
                              (Unaudited)

                                        Three Months Ended June 30,
                                       2003       2002      % Change
                                    ----------------------------------
Net Sales                           $ 1,582.1  $ 1,512.6       4.6
                                    ----------------------------------
  Cost of goods sold                    855.8      822.8       4.0

  Excise taxes on spirits and wine       71.3       74.6      (4.4)

  Advertising, selling, general
     and administrative expenses        391.3      375.7       4.2

  Amortization of intangibles             4.7        3.4      38.2

  Write-downs of identifiable 
   intangibles                           12.0        -         -

  Restructuring
     and restructuring-related items      6.6       19.5     (66.2)
                                    ----------------------------------
Operating Income                        240.4      216.6      11.0
                                    ----------------------------------
  Interest expense                       18.6       20.9     (11.0)

  Other (income) expense, net            (7.8)     (23.9)     67.4

  Income taxes                           49.0       18.9     159.3

  Minority interests                      3.9        3.8       2.6
                                    ----------------------------------
Net Income                          $   176.7  $   196.9     (10.3)

                        FORTUNE BRANDS, INC.
                (In millions, except per share amounts)
                              (Unaudited)

NET SALES AND OPERATING INCOME
------------------------------
                                        Three Months Ended June 30,
                                       2003       2002      % Change
                                    ----------------------------------
Net Sales

  Home and Hardware                 $   704.0  $   670.7       5.0

  Spirits and Wine                      253.6      246.1       3.0

  Golf                                  371.8      334.7      11.1

  Office                                252.7      261.1      (3.2)
                                    ----------------------------------
Total                               $ 1,582.1  $ 1,512.6       4.6
                                    ----------------------------------
Operating Income Before Charges (a)

  Home and Hardware                 $   119.4  $   107.7      10.9




  Spirits and Wine                       69.5       68.6       1.3

  Golf                                   70.5       63.1      11.7

  Office                                 13.5        8.1      66.7

Less:

  Corporate expenses                     13.9       11.4      21.9

  Write-downs of identifiable 
   intangibles                           12.0        -         -

  Restructuring
     and restructuring-related items      6.6       19.5     (66.2)
                                    ----------------------------------
Operating Income                    $   240.4  $   216.6      11.0

                                 Items
                         ----------------------                      
                            Cost of     SG & A   Identifiable      
          Restructuring  Sales Charges  Charges  Intangibles   Total
          ---------------------------------------------------------- 

Golf        $  2.0          $    -      $    -   $    -       $  2.0

Office         3.7             0.7         0.2     12.0         16.6
          ---------------------------------------------------------- 
   Total    $  5.7          $  0.7      $  0.2   $ 12.0       $ 18.6
          ---------------------------------------------------------- 
Income
 tax benefit                                                     6.3
                                                              ------
Net charge                                                    $ 12.3
                                                              ------