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Fortune Brands Inc (FBI)

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Friday 25 January, 2008

Fortune Brands Inc

Fortune Brands Reports Fourth Quarter and Full-...

Fortune Brands, Inc.
                  

Fortune Brands, Inc. (NYSE: FO):

    --  Company Delivers Targeted EPS for Quarter and Full Year

    --  Premium Spirits Business Achieves Record Full-Year Results with Margin
        Expansion

    --  Home Products Brands Outperform Challenging Market

    --  Golf Brands Set Industry Revenue Record

Fortune Brands, Inc. (NYSE: FO), a leading consumer brands company, today
reported results for the fourth quarter and full-year 2007. The company
delivered a fourth-quarter revenue record, benefiting from double-digit sales
increases for the company's distilled spirits and golf brands. The company also
continued to outperform the challenging U.S. home products market and gain share
in key categories. While reported earnings comparisons for the fourth quarter
and full year were adversely impacted by the downturn in the U.S. housing
market, charges for supply-chain initiatives, and the absence of one-time gains
recorded in the prior-year periods, the company achieved results within its
earnings target ranges for both periods.

'The effectiveness of our proactive growth and returns strategies, underpinned
by the strength of our company's unique breadth and balance, helped Fortune
Brands deliver results that achieved our earnings target for the fourth quarter,
as well as the full-year target we established at the beginning of 2007,' said
Bruce Carbonari, president and chief executive officer of Fortune Brands.
'That's especially notable given the fact that the housing correction in the
U.S. has proven more challenging and persistent than anyone anticipated a year
ago - or even three months ago.'

                           Winning in the Marketplace

'We're pleased that our brands are performing very well in their respective
markets,' Carbonari continued.

'In Spirits, we're driving strong profit growth that reflects our focus on
premium brands and building brand equity, which supports higher pricing in a
growing market. Net of excise taxes, Jim Beam, Sauza and Maker's Mark all drove
double-digit revenue increases for 2007 in constant currency, and worldwide
sales of Jim Beam surpassed 6 million cases. It's also notable that our
second-half acceleration of brand-building spending continued into the fourth
quarter, that we expanded underlying full-year operating margins in spirits by
more than one point, and that our spirits brands now generate about half of
Fortune Brands' total annual operating income.

'In Home and Hardware, we're aggressively positioning ourselves to outperform
the challenging market, and our sales outpaced the estimated market performance
by approximately four points for the year. In the quarter, Moen, Therma-Tru,
Master Lock, Simonton and our cabinetry brands continued to gain market share.
At the same time, our proactive pursuit of high-return cost and productivity
initiatives, many of which we began in advance of the downturn's impact, limited
the fourth-quarter operating margin decline in Home & Hardware to just 50 basis
points, adjusted for one-time items.'

'And in Golf, our brands set an industry sales record in 2007, finishing the
year with a double-digit sales increase in the fourth quarter. Successful
innovations helped Titleist, FootJoy and Cobra achieve individual brand records,
as we also attained sales records in every product category and in all major
markets for the year,' Carbonari added.

For the fourth quarter:

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*T
-- Income from continuing operations was $190.7 million, or $1.22 per
    diluted share, down 23% from $1.59 in the year-ago quarter.
    -- Comparisons were adversely impacted by: a current-quarter net
     charge ($0.17 per share) as restructuring-related items more than
     offset a gain on sale; and a year-ago-quarter net gain ($0.23 per
     share) from one-time items.
    -- These results exclude income from the divested wine business
     and the related gain on sale, amounting to $0.06 per diluted
     share in both the current-year and year-ago quarters. Wine
     results are reported in discontinued operations.
-- Diluted EPS before charges/gains was $1.43, up 1% from $1.42 in the
    year-ago quarter. Results benefited from solid operating
    performance, a lower effective tax rate and lower corporate
    expenses.
    -- These results, which include income from the wine business
     through the date of divestiture, achieved the company's
     previously announced target to be up low-single digits to down
     mid-single digits.
-- Net sales from continuing operations were $2.22 billion, up 1%.
-- Operating income from continuing operations was $336.2 million,
    down 7%.
*T

For the full year:

-0-
*T
-- Income from continuing operations was $749.5 million, or $4.79 per
    diluted share, down 10% from $5.31 in 2006.
-- Diluted EPS before charges/gains was $5.11, down 4% from $5.33 in
    2006.
    -- These results include income from the wine business through the
     date of divestiture.
-- Net sales from continuing operations were $8.56 billion, up 0.5%.
-- Operating income from continuing operations was $1.38 billion, down
    5%.
-- Free cash flow was $520 million after dividends and capital
    expenditures.
-- Return on equity before charges/gains was 15.3%.
-- Return on invested capital before charges/gains was 9.2%.
-- The dividend increased 8% to an annual rate of $1.68 per share.
*T

                          Establishing Targets for 2008

'While the U.S. housing correction will continue to present challenges in 2008,
we look to the future with confidence,' Carbonari continued. 'We enter the year
with enhanced flexibility on our balance sheet and higher returns following the
sale of our wine business in the fourth quarter. We remain sharply focused on
growth and returns, and we're continuing to invest for the future - to build our
brands, create innovative new products, expand into new markets, and optimize
our supply chains. Combined with our unique breadth and balance, we believe
these initiatives will continue to benefit us in 2008 and beyond, and position
us extremely well for when the U.S. housing market recovers.

'Looking to 2008, we're determined to continue growing our premium spirits and
golf brands, and to continue outperforming the home products industry. That
said, in an environment in which the home products market is expected by most
economists to decline double digits again in 2008, we're budgeting accordingly.

'Based on our initial estimates, we're targeting EPS before charges/gains to be
in the range of up at a low-single-digit rate to down at a high-single-digit
rate. That's versus an EPS before charges/gains for continuing operations number
of $5.06 for 2007. Our 2008 target is based on these goals for our business
units:

-0-
*T
-- In Spirits, we're targeting operating income before charges to be
    up at a mid-to-high-single-digit rate.
-- In Home & Hardware, we estimate the home products market was down
    low-double digits on a revenue basis in 2007 and we're budgeting
    for a similar market decline in 2008. We're targeting to again
    outperform the market at the top line, to again minimize margin
    declines, and for operating income before charges in Home &
    Hardware to be down at a mid-single-digit-to-mid-teens rate.
-- In Golf, we're targeting operating income before charges to be up
    modestly, reflecting increased investment in brand building and
    international growth opportunities.
*T

'For the first quarter of 2008, we're targeting diluted EPS before charges/gains
to be in the range of flat to down at a high-single digit rate. That's compared
to an EPS before charges/gains for continuing operations number of $0.81 for the
year-ago quarter,' Carbonari added.

The company also announced that it is targeting free cash flow for 2008 in the
range of $500-600 million after dividends and net capital expenditures.

About Fortune Brands

Fortune Brands, Inc. is a leading consumer brands company with annual sales
exceeding $8 billion. Its operating companies have premier brands and leading
market positions in distilled spirits, home and hardware, and golf products.
Beam Global Spirits & Wine, Inc. is the company's premium spirits business.
Major spirits brands include Jim Beam and Maker's Mark bourbon, Sauza tequila,
Canadian Club whisky, Courvoisier cognac, Teacher's and Laphroaig Scotch, and
DeKuyper cordials. Home and hardware brands include Moen faucets, Aristokraft,
Omega, Diamond and Kitchen Craft cabinetry, Therma-Tru door systems, Simonton
windows, Master Lock padlocks and Waterloo tool storage sold by units of Fortune
Brands Home & Hardware LLC. Acushnet Company's golf brands include Titleist,
Cobra and FootJoy. Fortune Brands, headquartered in Deerfield, Illinois, is
traded on the New York Stock Exchange under the ticker symbol FO and is included
in the S&P 500 Index, the MSCI World Index and the Ocean Tomo 300(TM) Patent
Index.

To receive company news releases by e-mail, please visit www.fortunebrands.com.

Forward-Looking Statements

This press release contains statements relating to future results, which are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Readers are cautioned that these forward-looking
statements speak only as of the date hereof, and the company does not assume any
obligation to update, amend or clarify them to reflect events, new information
or circumstances occurring after the date of this release. Actual results may
differ materially from those projected as a result of certain risks and
uncertainties, including but not limited to: competitive market pressures
(including pricing pressures); consolidation of trade customers; successful
development of new products and processes; ability to secure and maintain rights
to intellectual property; risks pertaining to strategic acquisitions and joint
ventures, including the potential financial effects and performance of such
acquisitions or joint ventures, and integration of acquisitions and the related
confirmation or remediation of internal controls over financial reporting;
changes related to the potential privatization of V&S Group; ability to attract
and retain qualified personnel; general economic conditions, including the U.S.
housing market; weather; risks associated with doing business outside the United
States, including currency exchange rate risks; interest rate fluctuations;
commodity and energy price volatility; costs of certain employee and retiree
benefits and returns on pension assets; dependence on performance of
distributors and other marketing arrangements; the impact of excise tax
increases on distilled spirits and wines; changes in golf equipment regulatory
standards and other regulatory developments; potential liabilities, costs and
uncertainties of litigation; impairment in the carrying value of goodwill or
other acquired intangibles; historical consolidated financial statements that
may not be indicative of future conditions and results due to the recent
portfolio realignment; any possible downgrades of the company's credit ratings;
as well as other risks and uncertainties detailed from time to time in the
company's Securities and Exchange Commission filings.

Use of Non-GAAP Financial Information

This press release includes measures not derived in accordance with generally
accepted accounting principles ('GAAP'), such as diluted earnings per share
before charges/gains, return on equity before charges/gains, return on invested
capital before charges/gains, comparable net sales, free cash flow, and
operating income before charges. These measures should not be considered in
isolation or as a substitute for any measure derived in accordance with GAAP,
and may also be inconsistent with similar measures presented by other companies.
Reconciliation of these measures to the most closely comparable GAAP measures,
and reasons for the company's use of these measures, are presented in the
attached pages.

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

                                       -------------------------------
                                       Three Months Ended December 31,
                                       -------------------------------
                                          2007       2006    % Change
                                       -------------------------------

                                       -------------------------------
Net Sales                                $2,215.4  $2,199.4       0.7
                                       -------------------------------

       Cost of goods sold                 1,135.4   1,104.1       2.8

       Excise taxes on spirits              183.7     175.5       4.7

       Advertising, selling, general
        and administrative expenses         516.0     528.1      (2.3)

       Gain on sale
        of The Dalmore Scotch assets        (45.6)        -         -

       Amortization of intangibles           11.8      11.8         -

       Restructuring
        and restructuring-related
         items                               77.9      19.8         -

                                       -------------------------------
Operating Income                            336.2     360.1      (6.6)
                                       -------------------------------

       Interest expense                      67.5      79.3     (14.9)

       Other income, net                     (8.1)    (10.3)    (21.4)

                                       -------------------------------
       Income from Continuing
        Operations before income taxes
        and minority interests              276.8     291.1      (4.9)
                                       -------------------------------

       Income taxes                          79.9      37.6     112.5

       Minority interests                     6.2       5.7       8.8

                                       -------------------------------
Income from Continuing Operations           190.7     247.8     (23.0)
                                       -------------------------------

Income from Discontinued Operations          10.8       9.8      10.2

                                       -------------------------------
Net Income                                 $201.5    $257.6     (21.8)
                                       -------------------------------

Earnings Per Common Share, Basic:
                                       -------------------------------
   Income from continuing operations        $1.24     $1.63     (23.9)
   Income from discontinued operations       0.07      0.07         -
   Net Income                               $1.31     $1.70     (22.9)
                                       -------------------------------

Earnings Per Common Share, Diluted:
                                       -------------------------------
   Income from continuing operations        $1.22     $1.59     (23.3)
   Income from discontinued operations       0.06      0.06         -
   Net Income                               $1.28     $1.65     (22.4)
                                       -------------------------------

Avg. Common Shares Outstanding
                                       -------------------------------
       Basic                                153.8     151.5       1.5
       Diluted                              156.9     155.6       0.8
                                       -------------------------------
*T

-0-
*T
                         FORTUNE BRANDS, INC.
                   CONSOLIDATED STATEMENT OF INCOME
               (In millions, except per share amounts)
                             (Unaudited)

                                      --------------------------------
                                      Twelve Months Ended December 31,
                                      --------------------------------
                                          2007       2006    % Change
                                      --------------------------------

                                      --------------------------------
Net Sales                                $8,563.1  $8,521.0       0.5
                                      --------------------------------

Cost of goods sold                        4,549.9   4,467.8       1.8

Excise taxes on spirits                     510.9     505.6       1.0

Advertising, selling, general
 and administrative expenses              2,022.8   2,021.5       0.1

Gain on sale
 of The Dalmore Scotch assets               (45.6)        -         -

Amortization of intangibles                  47.6      42.9      11.0

Restructuring
 and restructuring-related items            101.2      35.3         -

                                      --------------------------------
Operating Income                          1,376.3   1,447.9      (4.9)
                                      --------------------------------

Interest expense                            293.6     308.8      (4.9)

Other income, net                           (37.5)    (40.2)     (6.7)

                                      --------------------------------
 Income from Continuing Operations
  before income taxes and minority
  interest                                1,120.2   1,179.3      (5.0)
                                      --------------------------------

Income taxes                                346.3     299.3      15.7

Minority interests                           24.4      67.9     (64.1)

                                      --------------------------------
Income from Continuing Operations           749.5     812.1      (7.7)
                                      --------------------------------

Income from Discontinued Operations          13.1      18.0     (27.2)

                                      --------------------------------
Net Income                                 $762.6    $830.1      (8.1)
                                      --------------------------------

Earnings Per Common Share, Basic:
                                      --------------------------------
   Income from continuing operations        $4.89     $5.44     (10.1)
   Income from discontinued
    operations                               0.09      0.12     (25.0)
   Net Income                               $4.98     $5.56     (10.4)
                                      --------------------------------

Earnings Per Common Share, Diluted:
                                      --------------------------------
   Income from continuing operations        $4.79     $5.31      (9.8)
   Income from discontinued
    operations                               0.08      0.11     (27.3)
   Net Income                               $4.87     $5.42     (10.1)
                                      --------------------------------

Avg. Common Shares Outstanding
                                      --------------------------------
       Basic                                153.1     149.1       2.7
       Diluted                              156.5     153.0       2.3
                                      --------------------------------

Actual Common Shares Outstanding
                                      --------------------------------
       Basic                                153.9     151.9       1.3
       Diluted                              156.5     156.4       0.1
                                      --------------------------------
*T

-0-
*T
                         FORTUNE BRANDS, INC.
               (In millions, except per share amounts)
                             (Unaudited)

NET SALES AND OPERATING INCOME
-------------------------------------

                                      --------------------------------
                                      Three Months Ended December 31,
                                      --------------------------------
                                          2007        2006    % Change
                                      --------------------------------
Net Sales
                                      --------------------------------
       Spirits                              $858.8    $779.5     10.2
       Home and Hardware                   1,111.5   1,202.3     (7.6)
       Golf                                  245.1     217.6     12.6
                                      --------------------------------
Total Net Sales from Continuing
 Operations                               $2,215.4  $2,199.4      0.7
                                      --------------------------------

Operating Income
                                      --------------------------------
       Spirits                              $290.1    $236.7     22.6
       Home and Hardware                      62.8     148.2    (57.6)
       Golf                                   (6.7)     (4.8)   (39.6)
       Corporate expenses                    (10.0)    (20.0)    50.0
                                      --------------------------------
Total Operating Income from
 Continuing Operations                      $336.2    $360.1     (6.6)
                                      --------------------------------

Operating Income Before
 Charges/Gains(a)
                                      --------------------------------
       Spirits                              $245.9    $242.7      1.3
       Home and Hardware                     138.7     162.0    (14.4)
       Golf                                   (6.1)     (4.8)   (27.1)
Less:
       Corporate expenses                    (10.0)    (20.0)    50.0
                                      --------------------------------
Operating Income Before Charges/Gains
 from Continuing Operations                  368.5     379.9     (3.0)
       Restructuring
        and restructuring-related
         items                               (77.9)    (19.8)       -
      Gain from the sale of The
       Dalmore Scotch assets (b)              45.6         -        -
                                      --------------------------------
Operating Income from Continuing
 Operations                                 $336.2    $360.1     (6.6)
                                      --------------------------------

                                      --------------------------------
                                      Twelve Months Ended December 31,
                                      --------------------------------
                                          2007        2006    % Change
                                      --------------------------------
Net Sales
                                      --------------------------------
       Spirits                            $2,606.8  $2,513.4      3.7
       Home and Hardware                   4,550.9   4,694.2     (3.1)
       Golf                                1,405.4   1,313.4      7.0
                                      --------------------------------
Total Net Sales from Continuing
 Operations                               $8,563.1  $8,521.0      0.5
                                      --------------------------------

Operating Income
                                      --------------------------------
       Spirits                              $766.7    $660.6     16.1
       Home and Hardware                     503.0     695.4    (27.7)
       Golf                                  165.5     166.0     (0.3)
       Corporate expenses                    (58.9)    (74.1)    20.5
                                      --------------------------------
 Total Operating Income from
  Continuing Operations                   $1,376.3  $1,447.9     (4.9)
                                      --------------------------------

Operating Income Before
 Charges/Gains(a)
                                      --------------------------------
       Spirits                              $725.2    $669.6      8.3
       Home and Hardware                     599.3     721.7    (17.0)
       Golf                                  166.3     166.0      0.2
 Less:
       Corporate expenses                    (58.9)    (74.1)    20.5
                                      --------------------------------
Operating Income Before Charges/Gains
 from Continuing Operations                1,431.9   1,483.2     (3.5)
       Restructuring
        and restructuring-related
         items                              (101.2)    (35.3)       -
      Gain from the sale of The
       Dalmore Scotch assets (b)              45.6         -        -
                                      --------------------------------
Operating Income from Continuing
 Operations                               $1,376.3  $1,447.9     (4.9)
                                      --------------------------------


                                      --------------------------------
                                      Three Months Ended December 31,
                                      --------------------------------
                                          2007        2006    % Change
                                      --------------------------------
Home and Hardware - Operating Margin

Net Sales                                 $1,111.5  $1,202.3     (7.6)

Operating Income                              62.8     148.2    (57.6)
Operating Margin                               5.7%     12.3%
                                      --------------------------------

     Restructuring
      and restructuring-related items         75.9      13.8        -
     2006 Hedge Gain                             -      (5.8)       -
Operating Income Before Charges
 and One-Time Hedge Gain in 2006            $138.7    $156.2    (11.2)
Operating Margin - Before Charges (c)         12.5%     13.0%
                                      --------------------------------

                                      --------------------------------
                                      Twelve Months Ended December 31,
                                      --------------------------------
                                          2007        2006    % Change
                                      --------------------------------
Spirits - Operating Margin

Net Sales                                 $2,606.8  $2,513.4      3.7

Operating Income                             766.7     660.6     16.1
Operating Margin                              29.4%     26.3%
                                      --------------------------------

     Restructuring
      and restructuring-related items          4.1       9.0        -
     Gain from the sale of The
      Dalmore Scotch assets                  (45.6)        -        -
Operating Income Before Charges
 and gain on the sale of The Dalmore
  Scotch assets                              725.2     669.6      8.3
Operating Margin - Before Charges (c)         27.8%     26.6%
                                      --------------------------------
*T

(a) Operating Income Before Charges/Gains is Operating Income derived in
accordance with GAAP excluding restructuring and restructuring-related items and
excluding the gain from the sale of The Dalmore Scotch assets. Operating Income
Before Charges/Gains is a measure not derived in accordance with GAAP.
Management uses this measure to determine the returns generated by our operating
segments and to evaluate and identify cost reduction initiatives. Management
believes this measure provides investors with helpful supplemental information
regarding the underlying performance of the company from year-to-year. This
measure may be inconsistent with similar measures presented by other companies.

(b) The gain from the sale of The Dalmore Scotch assets is included in the
Spirits segment.

(c) Operating Margin Before Charges/Gains is Operating Income before the gain on
the sale of The Dalmore Scotch assets and excluding restructuring and
restructuring-related items, and excluding a commodity hedge gain divided by net
sales.

Operating Margin Before Charges/Gains and One-Time Hedge Gains and Operating
Margin Before Charges/Gains and the gain on the sale of The Dalmore Scotch
assets is a measure not derived in accordance with GAAP. Management uses this
measure to determine the returns generated by operating segments and to evaluate
and identify cost-reduction initiatives. Management believes this measure
provides investors with helpful supplemental information regarding the
underlying performance of the company from year-to-year. This measure may be
inconsistent with similar measures presented by other companies.

-0-
*T
FREE CASH FLOW
----------------------

                       --------------------------------
                       Three Months Ended December 31,
                       --------------------------------
                            2007             2006
                       --------------------------------

                       --------------------------------
Free Cash Flow (d)              $292.6           $228.0
Add:
   Net Capital
    Expenditures                 105.0             92.0
   Dividends Paid                 64.7             59.2
                       --------------------------------
   Cash Flow From
    Operations                  $462.3           $379.2
                       --------------------------------

                       -----------------------------------------------
                       Twelve Months Ended December 31, 2008 Full Year
                       -----------------------------------------------
                            2007             2006       Targeted Range
                       -----------------------------------------------

                       -----------------------------------------------
Free Cash Flow (d)              $518.8           $577.4    $500 - 600
Add:
   Net Capital
    Expenditures                 197.9            181.4       175-225
   Dividends Paid                248.6            223.9         270(i)
                       -----------------------------------------------
   Cash Flow From
    Operations                  $965.3           $982.7  $945 - 1,095
                       -----------------------------------------------
*T

(d) Free Cash Flow is Cash Flow from Operations less capital expenditures net of
proceeds from asset sales and dividends paid to stockholders. Free Cash Flow is
a measure not derived in accordance with GAAP. Management believes that Free
Cash Flow provides investors with helpful supplemental information about the
company's ability to fund internal growth, make acquisitions, repay debt and
repurchase common stock. This measure may be inconsistent with similar measures
presented by other companies.

(i) Assumes current dividend rate and basic shares outstanding on December 31,
2007.

DILUTED EPS BEFORE CHARGES/GAINS

Diluted EPS from Continuing Operations Before Charges/Gains is Income from
Continuing Operations calculated on a per-share basis excluding restructuring,
restructuring-related and one-time items.

For the fourth quarter of 2007, Diluted EPS from Continuing Operations Before
Charges/Gains is Income from Continuing Operations calculated on a per-share
basis excluding $77.9 million ($56.5 million after tax or $0.35 per diluted
share) of restructuring and restructuring-related items and $45.6 million ($28.5
million after tax or $0.18 per diluted share) gain associated with the sale of
The Dalmore Scotch assets. For the twelve-month period ended December 31, 2007,
Diluted EPS from Continuing Operations Before Charges/Gains excludes $101.2
million ($71.1 million after tax or $0.45 per diluted share) of restructuring
and restructuring-related items and a $45.6 million ($28.5 million after tax or
$0.18 per diluted share) gain associated with the sale of The Dalmore Scotch
assets.

For the fourth quarter of 2006, Diluted EPS from Continuing Operations Before
Charges/Gains is Income from Continuing Operations calculated on a per-share
basis excluding $19.8 million ($12.3 million after tax or $0.08 per diluted
share) of restructuring and restructuring-related items and $48.3 million, or
$0.31 per diluted share, of deferred tax credits associated with recently
enacted lower international statutory tax rates. For the twelve-month period
ended December 31, 2006, Diluted EPS from Continuing Operations Before
Charges/Gains excludes $35.3 million ($22.0 million after tax or $0.15 per
diluted share) of restructuring and restructuring-related items, a $47.8
million, or $0.31 per diluted share, non-cash charge associated with the
required accounting for an increase in the value of V&S Group's minority
interest in our Beam Global Spirits & Wines business, currency mark-to-market
expense of $2.9 million, or $0.02 per diluted share, and $86.5 million, or $0.57
per diluted share, of tax-related credits principally associated with the
deferred tax credits and the favorable conclusion of routine state tax audits
and the routine IRS review of our 2002-2003 tax returns.

Diluted EPS Before Charges/Gains is Net Income (inclusive of the wine business)
calculated on a per-share basis excluding restructuring and
restructuring-related items and the gain on the sale of the Wine business.

Diluted EPS Before Charges/Gains and Diluted EPS from Continuing Operations
Before Charges/Gains are measures not derived in accordance with GAAP.
Management uses this measure to evaluate the overall performance of the company
and believes this measure provides investors with helpful supplemental
information regarding the underlying performance of the company from
year-to-year. This measure may be inconsistent with similar measures presented
by other companies.

-0-
*T

                                      --------------------------------
                                      Three Months Ended December 31,
                                      --------------------------------
                                         2007        2006    % Change
                                      --------------------------------

                                      --------------------------------
Diluted Earnings Per Share from
 Continuing Operations
Income from Continuing Operations
    Before Charges/(Gains)                 1.39        1.36       2.2
       Minority Interest charge               -           -         -
       Tax-related credits                    -        0.31         -
       Gain on sale of The Dalmore
        Scotch assets                      0.18           -         -
       Currency mark-to-market
        expense                               -           -         -
       Restructuring
        and restructuring-related
         items                            (0.35)      (0.08)        -

                                      --------------------------------
Income from Continuing Operations          1.22        1.59     (23.3)
                                      --------------------------------

                                      --------------------------------
Income from Discontinued Operations        0.06        0.06         -
                                      --------------------------------

                                      --------------------------------
           Net Income                      1.28        1.65     (22.4)
                                      --------------------------------



                                      --------------------------------
Diluted Earnings Per Share
Net Income Before Charges/(Gains),
 inclusive of the wine business            1.43        1.42       0.7
        Minority Interest charge              -           -         -
        Tax-related credits                   -        0.31         -
        Gain on sale of The Dalmore
         Scotch assets                     0.18           -         -
        Currency mark-to-market
         expense                              -           -         -
        Restructuring
          and restructuring-related
           items                          (0.36)      (0.08)        -
        Gain on the sale of the wine
         business                          0.03           -         -

                                      --------------------------------
           Net Income                      1.28        1.65     (22.4)
                                      --------------------------------


                                      --------------------------------
                                      Twelve Months Ended December 31,
                                      --------------------------------
                                         2007        2006    % Change
                                      --------------------------------

                                      --------------------------------
Diluted Earnings Per Share from
 Continuing Operations
Income from Continuing Operations
 Before Charges/(Gains)                    5.06        5.22      (3.1)
        Minority Interest charge              -       (0.31)        -
        Tax-related credits                   -        0.57         -
        Gain on sale of The Dalmore
         Scotch assets                     0.18           -         -
        Currency mark-to-market
         expense                              -       (0.02)        -
        Restructuring
          and restructuring-related
           items                          (0.45)      (0.15)        -

                                      --------------------------------
Income from Continuing Operations          4.79        5.31      (9.8)
                                      --------------------------------

                                      --------------------------------
Income from Discontinued Operations        0.08        0.11     (27.3)
                                      --------------------------------

                                      --------------------------------
           Net Income                      4.87        5.42     (10.1)
                                      --------------------------------


                                      --------------------------------
Diluted Earnings Per Share
Net Income Before Charges/(Gains),
 inclusive of the wine business            5.11        5.33      (4.1)
        Minority Interest charge              -       (0.31)        -
        Tax-related credits                   -        0.57         -
        Gain on sale of The Dalmore
         Scotch assets                     0.18           -         -
        Currency mark-to-market
         expense                              -       (0.02)        -
        Restructuring
          and restructuring-related
           items                          (0.45)      (0.15)        -
        Gain on the sale of the wine
         business                          0.03           -         -

                                      --------------------------------
           Net Income                      4.87        5.42     (10.1)
                                      --------------------------------

                                      ----------
                                        Three
                                        Months
                                        Ended
                                       March 31,
                                      ----------
Diluted Earnings Per Share from
 Continuing Operations                   2007
                                      ----------
Income from Continuing Operations
 Before Charges/(Gains)                    0.81
        Restructuring
         and restructuring-related
          items                           (0.03)

                                      ----------
        Income from Continuing
         Operations                        0.78
                                      ----------
*T

RESTRUCTURING AND RESTRUCTURING-RELATED ITEMS

The company recorded pre-tax restructuring and restructuring-related items of
$77.9 million ($56.5 million after tax or $0.36 per diluted share) in the
three-month period ended December 31, 2007. The charges principally relate to a)
the Home and Hardware segment supply chain initiative, the exiting of certain
product lines in the U.S. and the UK door market, b) supply chain initiatives in
the Golf segment and c) repositioning initiatives in the Spirits U.S. business.

The company recorded pre-tax restructuring and restructuring-related items of
$101.2 million ($71.1 million after tax or $0.45 per diluted share) in the
twelve-month period ended December 31, 2007. The charges principally relate to
a) the Home and Hardware segment supply chain initiatives, the exiting of
certain product lines in the U.S. and the UK door market, b) supply chain
initiatives in the Golf segments and c) targeted repositioning actions in
Australia and the U.S. for the Spirits segment.

-0-
*T

                 -----------------------------------------------------
                         Three Months Ended December 31, 2007
                        (In millions, except per share amounts)
                 -----------------------------------------------------
                                 Restructuring-Related Items
                                 ---------------------------
                                  Cost of Sales    SG & A
                  Restructuring       Charges       Charges    Total
                 -----------------------------------------------------
     Spirits                  $-               $-       $1.4      $1.4
     Home and
      Hardware              57.0              7.9       11.0      75.9
     Golf                    0.4                -        0.2       0.6
                 -----------------------------------------------------
           Total           $57.4             $7.9      $12.6     $77.9
                 -----------------------------------------------------

                                                             ---------
Income tax
 benefit                                                          21.4
                                                             ---------
Net charge                                                       $56.5
                                                             ---------
Charge per
 common share
  Basic                                                          $0.37
  Diluted                                                        $0.36
                                                             ---------


                 -----------------------------------------------------
                         Twelve Months Ended December 31, 2007
                        (In millions, except per share amounts)
                 -----------------------------------------------------
                                 Restructuring-Related Items
                                 ---------------------------
                                  Cost of Sales    SG & A
                  Restructuring       Charges       Charges    Total
                 -----------------------------------------------------
     Spirits                $2.7               $-       $1.4      $4.1
     Home and
      Hardware              70.2             14.7       11.4      96.3
     Golf                    0.6                -        0.2       0.8
                 -----------------------------------------------------
           Total           $73.5            $14.7      $13.0    $101.2
                 -----------------------------------------------------

                                                             ---------
Income tax
 benefit                                                          30.1
                                                             ---------
Net charge                                                       $71.1
                                                             ---------
Charge per
 common share
  Basic                                                          $0.46
  Diluted                                                        $0.45
                                                             ---------
*T

RECONCILIATION OF 2007 EARNINGS BEFORE CHARGES TARGETS TO GAAP EARNINGS TARGETS

For the fourth quarter, the company targeted diluted EPS before charges/gains to
be in the range of up low-single digits to down mid-single digits. On a GAAP
basis, the company's diluted EPS from continuing operations was down 23%.

RECONCILIATION OF 2008 EARNINGS BEFORE CHARGES TARGETS TO GAAP EARNINGS TARGETS

For the first quarter, the company is targeting diluted EPS before charges/gains
from continuing operations to be in the range of flat to down high-single digits
versus an EPS before charges/gains from continuing operations of $0.81 in the
year ago quarter. On a GAAP basis, the company is targeting diluted EPS to in
the range of flat to down high-single digits.

For the full year, the company is targeting diluted EPS before charges/gains
from continuing operations to be in the range of up low-single digits to down
high-single digits. On a GAAP basis, the company is targeting diluted EPS from
continuing operations to be in the range of up low-single digits to up
double-digits.

RECONCILIATION OF 2008 OPERATING INCOME BEFORE CHARGES GUIDANCE TO GAAP
OPERATING INCOME

For the full year, we are targeting Spirits operating income before charges to
grow at a mid-to-high single-digit rate. On a GAAP basis, Spirits is targeting
operating income to grow at mid-to-high single digit rate.

For the full year, we are targeting Home & Hardware operating income before
charges to be down in the range of mid-single-digits to mid-teens. On a GAAP
basis, Home & Hardware is targeting operating income to be down mid-single
digits to up high-single digits.

For the full year, we are targeting Golf operating income before charges to be
up modestly. On a GAAP basis, Golf is targeting operating income to up modestly.

-0-
*T
                         FORTUNE BRANDS, INC.
             Quarterly Results from Continuing Operations
                            2007 and 2006
                         Amounts in millions
                             (Unaudited)

                                                   -------------------
                                                      First Quarter
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------

                                                   -------------------
Net sales                                          $1,909.1  $1,966.8
                                                   -------------------

     Cost of products sold                          1,058.9   1,050.9

     Excise taxes on spirits                           97.1     119.0

     Advertising, selling, general and
      administrative expenses                         475.8     478.7

     Gain on sale of The Dalmore Scotch assets            -         -

     Amortization of intangibles                       12.0       9.9

     Restructuring and restructuring-related items      9.0      10.6

                                                   -------------------
Operating income                                      256.3     297.7
                                                   -------------------

     Interest expense                                  75.5      72.1

     Other (income) expense, net                       (9.4)    (10.0)

                                                   -------------------
Income from Continuing Operations before income
 taxes and minority interests                         190.2     235.6
                                                   -------------------

     Income taxes                                      62.8      58.8

     Minority interest                                  6.1       4.7

                                                   -------------------
Income from Continuing Operations                     121.3     172.1
                                                   -------------------

Income from Discontinued Operations                    (1.1)      1.3

                                                   -------------------
Net Income                                           $120.2    $173.4
                                                   -------------------


Earnings Per Common Share, Basic:
                                                   -------------------
     Income from continuing operations                $0.80     $1.17
     Income from discontinued operations              (0.01)     0.01
     Net Income                                       $0.79     $1.18
                                                   -------------------

Earnings Per Common Share, Diluted:
                                                   -------------------
     Income from continuing operations                $0.78     $1.14
     Income from discontinued operations              (0.01)     0.01
     Net Income                                       $0.77     $1.15
                                                   -------------------


Average number of common shares outstanding
                                                   -------------------
    Basic                                             152.4     146.4
    Diluted                                           156.1     150.4
                                                   -------------------


                                                   -------------------
Diluted EPS from Continuing Operations
 Before Charges/(Gains)                               $0.81     $1.05

Net Charges/(Gains) per Diluted Share                  0.03     (0.09)

Net Income Cont. Ops. Before Charges/(Gains)         $127.0    $157.8
Net Charges/(Gains)                                     5.7     (14.3)


Operating Income Before Charges/(Gains)               265.3     308.3

Spirits Net Sales                                     519.4     561.9
Spirits Excise Taxes                                   97.1     119.0

Spirits Operating Income                              130.9     119.0
Spirits Restructuring Related Charges                   2.3       1.8
Gain on Sale of The Dalmore Scotch assets                 -         -
Spirits Operating Income Before Charges/(Gains)       133.2     120.8

Other (Income)/Expense, Net                            (9.4)    (10.0)
Other (Income)/Expense, Net Before Charges/(Gains)     (9.4)    (11.0)

Effective Tax Rate                                     33.0%     25.0%
Effective Tax Rate Before Charges/(Gains)              33.2%     34.3%
                                                   -------------------

                                                   -------------------
                                                     Second Quarter
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------

                                                   -------------------
Net sales                                          $2,293.3  $2,198.6
                                                   -------------------

     Cost of products sold                          1,212.3   1,150.8

     Excise taxes on spirits                          118.9     101.6

     Advertising, selling, general and
      administrative expenses                         523.5     512.3

     Gain on sale of The Dalmore Scotch assets            -         -

     Amortization of intangibles                       12.0       9.1

     Restructuring and restructuring-related items     10.8       1.6

                                                   -------------------
Operating income                                      415.8     423.2
                                                   -------------------

     Interest expense                                  76.4      77.3

     Other (income) expense, net                       (7.5)    (10.0)

                                                   -------------------
Income from Continuing Operations before income
 taxes and minority interests                         346.9     355.9
                                                   -------------------

     Income taxes                                     111.5     106.8

     Minority interest                                  5.9       4.1

                                                   -------------------
Income from Continuing Operations                     229.5     245.0
                                                   -------------------

Income from Discontinued Operations                     2.5       2.8

                                                   -------------------
Net Income                                           $232.0    $247.8
                                                   -------------------


Earnings Per Common Share, Basic:
                                                   -------------------
     Income from continuing operations                $1.50     $1.66
     Income from discontinued operations               0.02      0.02
     Net Income                                       $1.52     $1.68
                                                   -------------------

Earnings Per Common Share, Diluted:
                                                   -------------------
     Income from continuing operations                $1.47     $1.62
     Income from discontinued operations               0.01      0.01
     Net Income                                       $1.48     $1.63
                                                   -------------------


Average number of common shares outstanding
                                                   -------------------
    Basic                                             152.8     147.7
    Diluted                                           156.4     151.6
                                                   -------------------


                                                   -------------------
Diluted EPS from Continuing Operations
 Before Charges/(Gains)                               $1.51     $1.53
Net Charges/(Gains) per Diluted Share                  0.04     (0.09)

Net Income Cont. Ops. Before Charges/(Gains)         $236.2    $231.7
Net Charges/(Gains)                                     6.7     (13.3)


Operating Income Before Charges/(Gains)               426.6     424.8

Spirits Net Sales                                     616.6     579.3
Spirits Excise Taxes                                  118.9     101.6

Spirits Operating Income                              174.3     146.9
Spirits Restructuring Related Charges                   0.3       1.3
Gain on Sale of The Dalmore Scotch assets
Spirits Operating Income Before Charges/(Gains)       174.6     148.2

Other (Income)/Expense, Net                            (7.5)    (10.0)
Other (Income)/Expense, Net Before Charges/(Gains)     (7.5)    (10.9)

Effective Tax Rate                                     32.1%     30.0%
Effective Tax Rate Before Charges/(Gains)              32.3%     34.2%
                                                   -------------------

                                                   -------------------
                                                      Third Quarter
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------

                                                   -------------------
Net sales                                          $2,145.3  $2,156.2
                                                   -------------------

     Cost of products sold                          1,143.3   1,162.0

     Excise taxes on spirits                          111.2     109.5

     Advertising, selling, general and
      administrative expenses                         507.5     502.4

     Gain on sale of The Dalmore Scotch assets            -         -

     Amortization of intangibles                       11.8      12.1

     Restructuring and restructuring-related items      3.5       3.3

                                                   -------------------
Operating income                                      368.0     366.9
                                                   -------------------

     Interest expense                                  74.2      80.1

     Other (income) expense, net                      (12.5)     (9.9)

                                                   -------------------
Income from Continuing Operations before income
 taxes and minority interests                         306.3     296.7
                                                   -------------------

     Income taxes                                      92.1      96.1

     Minority interest                                  6.2      53.4

                                                   -------------------
Income from Continuing Operations                     208.0     147.2
                                                   -------------------

Income from Discontinued Operations                     0.9       4.1

                                                   -------------------
Net Income                                           $208.9    $151.3
                                                   -------------------


Earnings Per Common Share, Basic:
                                                   -------------------
     Income from continuing operations                $1.36     $0.97
     Income from discontinued operations                  -      0.03
     Net Income                                       $1.36     $1.00
                                                   -------------------

Earnings Per Common Share, Diluted:
                                                   -------------------
     Income from continuing operations                $1.33     $0.95
     Income from discontinued operations                  -      0.03
     Net Income                                       $1.33     $0.98
                                                   -------------------


Average number of common shares outstanding
                                                   -------------------
    Basic                                             153.3     150.9
    Diluted                                           156.8     154.5
                                                   -------------------


                                                   -------------------
Diluted EPS from Continuing Operations
 Before Charges/(Gains)                               $1.34     $1.28
Net Charges/(Gains) per diluted share                  0.01      0.33

Net Income Cont. Ops. Before Charges/(Gains)         $210.2    $197.0
Net Charges/(Gains)                                     2.2      49.8

Operating Income Before Charges/(Gains)               371.5     370.2

Spirits Net Sales                                     612.0     592.7
Spirits Excise Taxes                                  111.2     109.5

Spirits Operating Income                              171.4     158.0
Spirits Restructuring Related Charges                     -         -
Gain on Sale of The Dalmore Scotch assets                 -         -
Spirits Operating Income Before Charges/(Gains)       171.4     158.0

Other (Income)/Expense, Net                           (12.5)     (9.9)
Other (Income)/Expense, Net Before Charges/(Gains)    (12.5)     (9.9)

Effective Tax Rate                                     30.1%     32.4%
Effective Tax Rate Before Charges/(Gains)              30.2%     32.4%
                                                   -------------------

                                                   -------------------
                                                     Fourth Quarter
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------

                                                   -------------------
Net sales                                          $2,215.4  $2,199.4
                                                   -------------------

     Cost of products sold                          1,135.4   1,104.1

     Excise taxes on spirits                          183.7     175.5

     Advertising, selling, general and
      administrative expenses                         516.0     528.1

     Gain on sale of The Dalmore Scotch assets        (45.6)        -

     Amortization of intangibles                       11.8      11.8

     Restructuring and restructuring-related items     77.9      19.8

                                                   -------------------
Operating income                                      336.2     360.1
                                                   -------------------

     Interest expense                                  67.5      79.3

     Other (income) expense, net                       (8.1)    (10.3)

                                                   -------------------
Income from Continuing Operations before income
 taxes and minority interests                         276.8     291.1
                                                   -------------------

     Income taxes                                      79.9      37.6

     Minority interest                                  6.2       5.7

                                                   -------------------
Income from Continuing Operations                     190.7     247.8
                                                   -------------------

Income from Discontinued Operations                    10.8       9.8

                                                   -------------------
Net Income                                           $201.5    $257.6
                                                   -------------------


Earnings Per Common Share, Basic:
                                                   -------------------
     Income from continuing operations                $1.24     $1.63
     Income from discontinued operations               0.07      0.07
     Net Income                                       $1.31     $1.70
                                                   -------------------

Earnings Per Common Share, Diluted:
                                                   -------------------
     Income from continuing operations                $1.22     $1.59
     Income from discontinued operations               0.06      0.06
     Net Income                                       $1.28     $1.65
                                                   -------------------


Average number of common shares outstanding
                                                   -------------------
    Basic                                             153.8     151.5
    Diluted                                           156.9     155.6
                                                   -------------------


                                                   -------------------
Diluted EPS from Continuing Operations
 Before Charges/(Gains)                               $1.39     $1.36
Net Charges/(Gains) per Diluted Share                  0.17     (0.23)

Net Income Cont. Ops. Before Charges/(Gains)         $218.7    $211.8
Net Charges/(Gains)                                    28.0     (36.0)

Operating Income Before Charges/(Gains)               368.5     379.9

Spirits Net Sales                                     858.8     779.5
Spirits Excise Taxes                                  183.7     175.5

Spirits Operating Income                              290.1     236.7
Spirits Restructuring Related Charges                   1.4       5.9
Gain on Sale of The Dalmore Scotch assets             (45.6)        -
Spirits Operating Income Before Charges/(Gains)       245.9     242.6

Other (Income)/Expense, Net                            (8.1)    (10.3)
Other (Income)/Expense, Net Before Charges/(Gains)     (8.1)    (10.3)

Effective Tax Rate                                     28.8%     13.0%
Effective Tax Rate Before Charges/(Gains)              27.2%     30.1%
                                                   -------------------

                                                   -------------------
                                                        Full Year
                                                   -------------------
                                                     2007      2006
                                                   --------- ---------

                                                   -------------------
Net sales                                          $8,563.1  $8,521.0
                                                   -------------------

     Cost of products sold                          4,549.9   4,467.8

     Excise taxes on spirits                          510.9     505.6

     Advertising, selling, general and
      administrative expenses                       2,022.8   2,021.5


     Gain on sale of The Dalmore Scotch assets        (45.6)        -

     Amortization of intangibles                       47.6      42.9

     Restructuring and restructuring-related items    101.2      35.3

                                                   -------------------
Operating income                                    1,376.3   1,447.9
                                                   -------------------

     Interest expense                                 293.6     308.8

     Other (income) expense, net                      (37.5)    (40.2)

                                                   -------------------
Income from Continuing Operations before income
 taxes and minority interests                       1,120.2   1,179.3
                                                   -------------------

     Income taxes                                     346.3     299.3

     Minority interest                                 24.4      67.9

                                                   -------------------
Income from Continuing Operations                     749.5     812.1
                                                   -------------------

Income from Discontinued Operations                    13.1      18.0

                                                   -------------------
Net Income                                           $762.6    $830.1
                                                   -------------------


Earnings Per Common Share, Basic:
                                                   -------------------
     Income from continuing operations                $4.89     $5.44
     Income from discontinued operations               0.09      0.12
     Net Income                                       $4.98     $5.56
                                                   -------------------

Earnings Per Common Share, Diluted:
                                                   -------------------
     Income from continuing operations                $4.79     $5.31
     Income from discontinued operations               0.08      0.11
     Net Income                                       $4.87     $5.42
                                                   -------------------


Average number of common shares outstanding
                                                   -------------------
    Basic                                             153.1     149.1
    Diluted                                           156.5     153.0
                                                   -------------------


                                                   -------------------
Diluted EPS from Continuing Operations
 Before Charges/(Gains)                               $5.06     $5.22
Net Charges/(Gains) per Diluted Share                  0.27     (0.09)

Net Income Cont. Ops. Before Charges/(Gains)         $792.1    $798.3
Net Charges/(Gains)                                    42.6     (13.8)


Operating Income Before Charges/(Gains)             1,431.9   1,483.2

Spirits Net Sales                                   2,606.8   2,513.4
Spirits Excise Taxes                                  510.9     505.6

Spirits Operating Income                              766.7     660.6
Spirits Restructuring Related Charges                   4.0       9.0
Gain on Sale of The Dalmore Scotch assets             (45.6)        -
Spirits Operating Income Before Charges/(Gains)       725.1     669.6

Other (Income)/Expense, Net                           (37.5)    (40.2)
Other (Income)/Expense, Net Before Charges/(Gains)    (37.5)    (42.1)

Effective Tax Rate                                     30.9%     25.4%
Effective Tax Rate Before Charges/(Gains)              30.6%     32.7%
                                                   -------------------
*T

-0-
*T
                         FORTUNE BRANDS, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEET
                            (In millions)
                             (Unaudited)


                                             ------------ ------------
                                             December 31, December 31,
                                                 2007         2006
                                             ------------ ------------

Assets
  Current assets
                                             ------------ ------------
      Cash and cash equivalents                    $203.7       $186.7
      Accounts receivable, net                    1,101.9      1,130.1
      Inventories                                 2,047.6      1,937.8
      Other current assets                          392.9        390.2
      Current assets of discontinued
       operations                                       -        285.3
                                             ------------ ------------
        Total current assets                      3,746.1      3,930.1

    Property, plant and equipment, net            1,698.2      1,708.2
    Intangibles resulting from
      business acquisitions, net                  8,063.2      8,038.7
    Other assets                                    488.8        346.0
    Noncurrent assets of discontinued
     operations                                         -        645.3
                                             ------------ ------------
        Total assets                            $13,996.3    $14,668.3
                                             ------------ ------------


Liabilities and Stockholders' Equity
  Current liabilities
                                             ------------ ------------
      Short-term debt                              $230.9       $787.6
      Current portion of long-term debt             200.0          1.7
      Other current liabilities                   1,738.0      1,628.4
      Current liabilities of discontinued
       operations                                       -         97.7
                                             ------------ ------------
        Total current liabilities                 2,168.9      2,515.4

  Long-term debt                                  3,942.7      5,034.9
  Other long-term liabilities                     1,640.7      1,749.6
  Noncurrent liabilities of discontinued
   operations                                           -         80.7
                                             ------------ ------------
        Total liabilities                         7,752.3      9,380.6

  Minority interest                                 558.5        559.7

  Stockholders' equity                            5,685.5      4,728.0
                                             ------------ ------------

          Total liabilities and
           stockholders' equity                 $13,996.3    $14,668.3
                                             ------------ ------------
*T

-0-
*T
                         FORTUNE BRANDS, INC.
  Reconciliation of ROE based on Net Income Before Charges/Gains to
                     ROE based on GAAP Net Income
                          December 31, 2007
                         Amounts in millions
                             (Unaudited)

                     Rolling twelve months              ROE based on
                       Net Income Before                  Net Income
                      Charges/Gains less                   Before
                      Preferred Dividends     Equity     Charges/Gains
                     ---------------------   --------   --------------

 Fortune Brands             $800.0         / $5,217.9 =     15.3%


                     Rolling twelve months
                              GAAP                      ROE based on
                       Net Income less                       GAAP
                      Preferred Dividends     Equity      Net Income
                     ---------------------   --------   --------------

 Fortune Brands             $762.1         / $5,095.6 =     15.0%

*T

Return on Equity - or ROE - Before Charges/Gains is net income less preferred
dividends derived in accordance with GAAP excluding any restructuring and
non-recurring items divided by the twelve month average of GAAP common equity
(total equity less preferred equity) excluding any restructuring and
non-recurring items.

-0-
*T
                         FORTUNE BRANDS, INC.
  Reconciliation of ROIC based on Net Income Before Charges/Gains to
                    ROIC based on GAAP Net Income
                          December 31, 2007
                         Amounts in millions
                             (Unaudited)

                      Rolling twelve
                      months Net Income                 ROIC based on
                           Before                         Net Income
                     Charges/Gains plus    Invested        Before
                      Interest Expense      Capital      Charges/Gains
                     ------------------   -----------   --------------

 Fortune Brands           $1,004.0      /  $10,905.6  =      9.2%


                      Rolling twelve
                         months GAAP                    ROIC based on
                      Net Income plus      Invested          GAAP
                      Interest Expense      Capital       Net Income
                     ------------------   -----------   --------------

 Fortune Brands            $966.1       /  $10,783.2  =      9.0%

*T

Return on Invested Capital - or ROIC - Before Charges/Gains is net income plus
interest expense derived in accordance with GAAP excluding any restructuring and
non-recurring items divided by the twelve month average of GAAP Invested Capital
(net debt plus equity) excluding any restructuring and non-recurring items.

ROE Before Charges/Gains and ROIC Before Charges/Gains are measures not derived
in accordance with GAAP. Management uses these measures to determine the returns
generated by the company and to evaluate and identify cost-reduction
initiatives. Management believes these measures provide investors with helpful
supplemental information regarding the underlying performance of the company
from year-to-year. These measures may be inconsistent with similar measures
presented by other companies.

-0-
*T
Contact:
Fortune Brands, Inc.
Media Relations:
Clarkson Hine
(847) 484-4415
or
Investor Relations:
Tony Diaz
(847) 484-4410
*T
                                                                                                                                                  

a d v e r t i s e m e n t