UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

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

    For the fiscal year ended:            Commission file number:
         December 31, 1998                        0-8894

                              BENJAMIN MOORE & CO.
             (Exact name of registrant as specified in its charter)

           New Jersey                           13-5256230
    (State of incorporation)         (I.R.S. Employer Identification No.)

                             51 Chestnut Ridge Road
                           Montvale, New Jersey 07645
                    (Address of principal executive offices)

        Registrant's telephone number including area code: (201) 573-9600

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                      Common Stock, par value $10 per share

                 ----------------------------------------------

      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. |X|

      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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                   Yes |X| No |_|

As of March 1, 1999, the aggregate market value of the registrant's common stock
held by non-affiliates equalled $531,201,488.

As of March 1, 1999, 8,905,092 shares of common stock of the registrant were
issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement dated March 18, 1999, for use in
connection with its 1999 Annual Meeting of Shareholders are incorporated by
reference in Part III of this Annual Report on Form 10-K to the extent set forth
in Items 10, 11, 12 and 13 hereof.
<PAGE>

                                     PART I

INTRODUCTION

      Benjamin Moore & Co. (the "Company") was incorporated under the laws of
the State of New Jersey in 1891, as the successor to a business established in
1883. As used herein, the term "Company" means Benjamin Moore & Co. and its
subsidiaries, unless the context indicates otherwise. The Company's principal
executive offices are located at 51 Chestnut Ridge Road, Montvale, New Jersey
07645; and its telephone number at that location is (201) 573-9600.

ITEM 1. BUSINESS

(Dollars in thousands, except per share amounts)

      The Company is engaged in the formulation, manufacture and sale of a broad
line of coatings for use by the general public and industrial and commercial
users in its two segments in the United States ("U.S.") and Canada, as well as
in New Zealand and Australia. Transfers between geographic segments are not
significant and are eliminated in consolidation. Business groups within these
segments are trade sales coatings, production finishes coatings and retail.
Trade sales coatings consist of water-thinnable and solvent-thinnable general
purpose coatings (paints, stains and clear finishes) for use by the general
public, painting contractors and industrial and commercial users, primarily for
the decoration and preservation of the interiors and exteriors of residential,
commercial, institutional and industrial buildings and allied structures.
Production finishes coatings are usually produced to conform to the specific
requirements of manufacturers who utilize such coatings in the manufacturing
process. They are primarily used in the manufacture of various types of flexible
packages, beverage and food containers, tanks, roof decking, coils, furniture
and shelving, window blinds and flatwood products. Production finishes coatings
and trade sales coatings serve both decorative and preservative functions. The
Company owns interests in retail stores in the U.S. engaging in the sale of
paint and other home decorating items. Reference is made to the information set
forth in Note 16 to the Notes to Consolidated Financial Statements, Part II,
Item 8 hereof, with respect to assets and operating results by geographic
segment.

      The Company believes that it is one of the leading manufacturers of
coatings in the United States and Canada.

Marketing and Distribution

      It has always been the Company's policy to actively support the continued
growth and prosperity of independently owned distributors and retail outlets,
through which the trade sales coatings are sold. In furtherance of that policy,
the Company provides financing to such enterprises under circumstances where it
is deemed to be in the best interests of the Company to do so (see, e.g., Note 5
to the Notes to Consolidated Financial Statements, Part II, Item 8 hereof). The
trade sales coatings are sold under such trademarks as Benjamin Moore(R),
Benjamin Moore Paints(R), Moore's(R), Moorglo(R), Moorgard(R), Moorwood(R),
Moorwhite(R), Moorlife(R), Impervo(R), Moorcraft(R), Impervex(R), Regal(R) Wall
Satin(R), Satin Impervo(R), AquaGlo(R), AquaPearl(R), AquaVelvet(R), Regal
Aquagrip(R), Regal First Coat(R), Pristine(R), A Stroke of Brilliance(R),
Colorscapes(R), and Benwood(R). Although a variety of ready-mixed colors is
available in most of these products, a substantially wider selection can be
obtained through the Company's Moor-O-Matic(R)III Color System, which provides
in-store machine capability to tint formulated bases with colorants which are
manufactured by the Company. The Company believes its Moor-O-Matic(R)III Color
System has been of significant value in promoting the sales of its trade sales
coatings. Moore's(R) Video Color Planner and Moore's(R) Computer Color Matching
System provide the ability to plan color schemes and to quickly match almost any
color by computer. Production finishes coatings are customarily sold by the
Company directly to the ultimate user.


                                        2
<PAGE>

Sales

      The Company is engaged in the formulation, manufacture and sale of
coatings and related goods and services. Net sales in the U.S. accounted for
87.4%, 86.0%, and 86.7% of total revenue for the three years ending December 31,
1998, 1997 and 1996, respectively. Net sales in Canada accounted for 10.5%,
11.4%, and 11.5% of total revenue for the three years ending December 31,1998,
1997, and 1996, respectively. The Company does not have any customer to which
sales exceed 10% of total sales.

Foreign Operations

      The Company operates in Canada, New Zealand and Australia. The Company's
Canadian operations are carried on through Benjamin Moore & Co., Limited ("the
Canadian Company"), which is an 84.4% owned subsidiary of the Company, and
Technical Coatings Co. Limited, which is a wholly-owned subsidiary of the
Canadian Company. The Company's New Zealand operations are carried on through
Benjamin Moore & Co (NZ) Limited, which is a wholly-owned subsidiary of the
Company, and Benjamin Moore Pacific Limited, which is a 67.3% owned subsidiary
of Benjamin Moore & Co (NZ) Limited. The Company's Australian operations are
carried on through White Knight Paints Pty Ltd., which is a 57.9% owned
subsidiary of the Company. During 1998, net sales to external customers
attributable to those companies in total (which are included in the Company's
consolidated financial statements) were approximately $89,840. Approximately
5.6% of the outstanding shares of the Canadian subsidiary are owned by persons
who are associated with the Company, including employees of such subsidiary.

Research and Development and Quality Control

      The Company considers its research and development and quality control
activities to be among the most advanced in the industry, and of significant
importance in enabling it to achieve and maintain its position as one of the
leading companies in the coatings industry.

      The Company maintains several laboratory facilities for the development of
new products and processes, the improvement of existing products and the special
formulation of products to meet the specific requirements of its customers. The
Central Laboratories, which is the principal such facility, is located in
Flanders, New Jersey. Quality control activities are carried out in laboratories
located at each manufacturing facility.

      The Company also maintains outdoor testing facilities in Lebanon, New
Jersey, where its products, as well as those of its competitors, are evaluated
for performance under varying weather conditions. Independent commercial
facilities are also utilized for this purpose.

      As of December 31, 1998, 109 chemists and technicians were employed by the
Company in research and development and quality control activities. Research and
development and quality control expenditures amounted to $13,091, $12,496 and
$13,787 in 1998, 1997 and 1996, respectively. Quality control expenditures
aggregated $4,064, $3,943 and $3,928, respectively, and are included herein
because a substantial portion of such expenditures is related to development
projects.


                                        3
<PAGE>

Competition

      The coatings industry is highly competitive and has historically been
subject to intense price competition. It is estimated that there are
approximately 800 coatings manufacturers in the United States, many of which are
small companies which provide intense competition within regional and local
markets, especially with respect to lower priced coatings and custom made
specialty items which are required on a short-time delivery basis. Other
manufacturers are large diversified corporations, the assets of which are
substantially greater than those of the Company, which compete on a nationwide
basis. The competition which the Company encounters in Canada, New Zealand and
Australia is similar in nature to that which it encounters in the United States.
The Company estimates that it is one of the largest manufacturers of trade sales
coatings in the United States and Canada. With respect to sales of production
finishes coatings, the Company's overall position in the industry is relatively
small.

Seasonal Aspects

      Historically, sales of trade sales coatings have been seasonal in nature,
with the heaviest concentration of such sales occurring in the second and third
quarters of the year. Sales of production finishes coatings have been relatively
stable throughout the year. During 1998, the percentages of the U.S. trade sales
coatings which were made in the first, second, third and fourth quarters of the
year were 21%, 28%, 29% and 22%, respectively. The percentages of Canadian trade
sales coatings which were made in the first, second, third and fourth quarters
of 1998 were 23%, 31%, 27% and 19%, respectively. Production and inventory
schedules are timed to coincide with the aforementioned variations.

Employees

      As of December 31, 1998, the Company had approximately 2,274 employees.
Approximately 33% of these employees were salaried personnel, approximately 23%
were sales representatives, and approximately 44% were hourly employees. The
Company considers its relations with its employees to be excellent.

Raw Materials and Supplies

      The Company purchases its raw material and supplies from a wide variety of
sources, and does not consider its business to be dependent upon any one source
of supply. However, the price and supply of some petrochemical intermediate
products, which are important ingredients in the manufacture of coatings, are
subject to world political and economic conditions. Certain raw materials are
converted into synthetic resins which, when combined with pigments, are used in
the production of both the trade sales coatings and the production finishes
coatings.

Patents and Trademarks

      The Company does not rely on patents in its business. The Company does,
however, rely upon formulas developed by it, and upon its technical expertise
and experience in meeting the requirements of its customers. The Company owns a
large number of registered trademarks and trade names, several of which are
referred to elsewhere herein, which it considers to be of significance in
identifying the Company and its products.


                                        4
<PAGE>

Backlog

      As is typical in the industry, backlog of orders is not significant in the
business of the Company.

Environmental Affairs and Governmental Regulation

      The operations of the Company, like those of other companies engaged in
similar businesses, involve the use and disposal of substances regulated under
extensive environmental protection laws. The Company believes that its
operations are in compliance with applicable federal, state and local laws and
regulations relating to the discharge of materials into the environment, or
otherwise relating to the protection of the environment. Such laws and
regulations have not had any material adverse effect upon the Company's capital
expenditures, earnings or competitive position.

      The Company places emphasis on environmental responsibility. New and
existing facilities constructed or modified in the normal course of business
incorporate designs to minimize waste.

      The Company has entered into full or partial settlement agreements with
governmental authorities or private parties with respect to fourteen sites under
federal and state laws. Total settlement costs to date have been approximately
$3,000.

      The Company is involved in thirty-one unsettled sites. In all cases the
Company believes its share of liability for environmental clean up costs is less
than 1% of such costs for each site. A total of approximately $3,980 has been
accrued as an estimate of such potential costs. These cost estimates are
carefully reviewed and revised where necessary each quarter during the year.
Possible insurance recoveries are not considered in estimating liabilities.

      Also, the Company is involved in remedial activities at three of its owned
facilities as follows:

      1. A water monitoring program was conducted at the Company's facility in
Cuyahoga Heights, Ohio. No remediation activities are being conducted now. Total
costs to date are $172.

      2. Soil and shallow ground water contamination has been detected at the
Company's plant at Milford, Massachusetts. The affected soils have been
excavated. Further studies are being undertaken to assess the full extent of the
water contamination. However, preliminary results indicate that the problem is
moderate and is being remediated with appropriate technologies. Expenditures to
date have been approximately $910.

      3. The Company has expended approximately $5,000 over the last ten years
to assess and remediate contamination of soil and water at the Company's
facility at Santa Clara, California, operated by its subsidiary, Technical
Coatings Co. The Company has installed an underground trench along two sides of
its property. This trench is capable of capturing the contamination and
preventing its migration off the plant site. At full operating capacity, the
treatment system installed as part of the remediation process treats the pumped
water to acceptable cleanup levels. The treated water would be used in the paint
manufacturing process as cooling water before being discharged into the
municipal sewer system or reinjected to the ground for recirculation. At this
time there is a trial shut-down program of the treatment system which was
approved by the California regulatory agency responsible for such oversight.
Current operating and maintenance costs of the treatment system are
approximately $30 per year.

      Accrued costs for estimated cleanup expenses for these three facilities
are approximately $589.

      Federal and state laws require that potentially responsible parties
("PRP") fund remedial actions regardless of fault, legality of original disposal
or ownership of a disposal site. In 1998, the Company spent approximately $372
on remedial cleanups and related studies compared with approximately $347 spent
for such purposes in 1997 and $447 for such purposes in 1996.


                                        5
<PAGE>

      The Company has recovered approximately $2,338 since 1994 under an
environmental impairment insurance policy. The Company continues to negotiate
further settlements.

      It is difficult to estimate the ultimate level of future environmental
expenditures due to a number of uncertainties, including uncertainties about the
current status of the law and regulations, uncertainties surrounding remediation
procedures, including the development of new technologies, the enactment of
additional regulations, the identification of new sites for which the Company
could be a PRP, the apportionment of responsibility among identified PRPs in
addition to the Company and insurance recoveries of Company costs, as well as
information relating to individual sites. Subject to the foregoing, Company
management believes its estimates of its liability are reasonable and
anticipates that capital expenditures and the cost of remedial actions to comply
with the current laws governing environmental protection will not have a
material adverse effect upon its consolidated financial statements.


                                        6
<PAGE>

ITEM 2. PROPERTIES

      Set forth below is certain information with respect to the Company's
principal facilities:

                                             Approximate
Location                Principal Use        Square Feet      Owned/Leased
--------                -------------        -----------      ------------

Newark, NJ              Plant                   267,600       Owned

Melrose Park, IL        Plant                   145,200       Owned

Jacksonville, FL        Plant                   130,200       Owned

Pell City, AL           Plant                   120,800       Owned

Toronto, ON             Executive Offices-      118,800       Owned
                        Subsidiary; Plant

Milford, MA             Plant                   110,500       Owned

Cuyahoga Heights, OH    Warehouse               106,000       Owned

Colonial Heights, VA    Plant                   92,800        Owned

Mesquite, TX            Plant                   87,300        Owned

Flanders, NJ            Central Laboratories,   78,000        Owned
                        Management
                        Information Services

St. Louis, MO           Warehouse               76,800        Owned

Denver, CO              Warehouse               73,500        Owned

Johnstown, NY           Plant                   69,000        Owned

Montreal, PQ            Plant                   63,500        Owned

Commerce, CA            Plant                   59,000        Owned

Montvale, NJ            Corporate Offices       57,000        Owned

Glendale Heights, IL    Executive Offices-      57,000        Leased (1)
                        Subsidiary; Warehouse

Nutley, NJ              Plant                   50,000        Owned

Burlington, ON          Plant                   46,600        Owned

Seven Hills, NSW        Plant                   43,600        Leased (2)

Aldergrove, BC          Plant                   39,400        Owned

Santa Clara, CA         Plant                   39,400        Owned

-------------------------------
(1) Lease expires December, 2006, not including renewal options.

(2) Lease expires October, 1999, not including renewal options.

(3) Lease expires June, 2001, not including renewal option.


                                        7
<PAGE>

                                             Approximate
Location                Principal Use        Square Feet      Owned/Leased
--------                -------------        -----------      ------------

Auckland, NZ            Executive Offices-      30,700        Owned
                        Subsidiary; Plant

Seven Hills, NSW        Executive Offices-      25,000        Leased (3)
                        Subsidiary; Warehouse

      The Company owns 9.32 acres of land in Lebanon, New Jersey, which is used
as a testing facility. The Company also leases warehouse facilities in North
Kansas City, Missouri; Bloomington, Minnesota; Newark, California; Auckland and
Christchurch, New Zealand; Rocklea, QLD, Australia and in Concord, Edmonton,
Saskatoon, Winnipeg, Dartmouth and Mount Pearl, Canada. Warehouse arrangements
also exist in Portland, Oregon. In addition, the Company leases approximately 40
retail locations.

      All of the facilities which are stated above as being owned by the Company
are owned in fee, free and clear of any mortgages or other material
encumbrances. The Company believes that its properties and equipment are well
maintained and in good condition, and that the rentals paid by it for its leased
properties are at competitive rates. The Company also believes that its
facilities are adequate for its existing needs.

ITEM 3. LEGAL PROCEEDINGS

      The Company is involved in a number of legal actions in which substantial
monetary damages are sought. Management believes that the outcome of all such
legal actions, individually and in the aggregate, will not have a material
effect on the Company's consolidated financial statements. Also, see
"Environmental Affairs and Governmental Regulation" above.

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

      There was no submission of matters to a vote of security holders during
the fourth quarter of 1998.


                                        8
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

    The executive officers of the Company are elected each year by the directors
of the Company, and are as follows:

Name                      Office                                       Age
----                      ------                                       ---

Richard Roob              Chairman of the Board of Directors
                          and Chief Executive Officer                  66

Yvan Dupuy                President and Chief Operating Officer        47

Benjamin M. Belcher, Jr.  Executive Vice President                     64
(Retired 1/1/99)

Ward C. Belcher           Vice President-Operations                    52

Michael A. Bonner         Vice President-Technology                    49


Donald E. Devine II       Vice President - Finance and
                          Chief Financial Officer                      40

James E. Henderson        Treasurer                                    47

Michael A. Kolind         Vice President - Business Development        46

John T. Rafferty          Secretary and General Counsel                66

Ellen Singer              Vice President - Marketing                   42

Reid M. Squires           Vice President - Human Resources             44

Charles C. Vail           Senior Vice President                        55

Bruce E. Zeh              Vice President - Sales                       47

------------------------------

     All of the executive officers of the Company, except for Ms. Singer, and
Messrs. Devine and Zeh have, during a period in excess of the past five years,
been actively engaged in the business and affairs of the Company in various
senior management capacities.

     Ms. Singer was elected Vice President - Marketing in February 1998 and had
been the Director of Marketing of the Company since January 1997 and the
Corporate Marketing Manager from 1995 until 1996. Prior thereto, she was
Business Director of Nabisco Foods Group from 1987 until 1995.


                                        9
<PAGE>

      Mr. Devine joined the Company in November 1998 as Vice President - Finance
and Chief Financial Officer. Prior to his joining the Company, he was Vice
President of Finance and Chief Financial Officer of the Dannon Company since
1992.

      Mr. Zeh joined the Company in June 1998. Prior to his joining the Company,
he was formerly employed by ICI Paints as Vice President of ICI Paints Canada,
Inc. from 1980 through 1998. Prior to that he was a Vice President at Devoe.

                                     PART II

ITEM 5. MARKET PRICE OF THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
        HOLDER MATTERS

      Despite the absence of an established public trading market for shares of
the Company's common stock, sporadic trading of the Company's shares has been
reported on the over-the-counter bulletin board ("OTCBB"). This type of trading
activity continues to be reported and, at times, has been at prices
significantly above the per share price of the Company's common stock as
determined by the independent appraisal firm, Management Planning, Inc. ("MPI").
The Company will continue to use the MPI price for small block purchases from
shareholders and for purposes of the Company's Employees' Stock Ownership Plan
("ESOP"). It is possible that officers and directors of the Company may buy or
sell shares of Company common stock on the OTCBB from time to time. A broker or
financial advisor should be consulted for information concerning this market.

      In the past, the Company has purchased shares of its common stock from
shareholders in privately negotiated transactions. However, except with respect
to shares distributed from its ESOP, the Company is under no obligation to
purchase shares from its shareholders and there can be no assurance that such
purchases will be continued. As of December 31, 1998, the Company had
approximately 1,900 shareholders.

      In light of trading on the OTCBB, the Company is considering other avenues
for achieving an organized public market for the Company's common stock to
provide liquidity for share holdings.

                                      Price Range              Dividends Paid
                                 1998              1997         1998   1997
--------------------------------------------------------------------------------
                             High     Low      High     Low
1st quarter                 $83.68  $78.12    $74.61  $72.23   $ .45  $ .42
2nd quarter                  84.73   82.11     76.24   71.81     .45    .42
3rd quarter                  86.70   73.14     79.87   76.10     .45    .42
4th quarter                  84.65   71.73     80.15   74.62     .45    .42
4th quarter-extra                                                .45    .37
                                                               ------------
  Total                                                        $2.25  $2.05
                                                               ============


                                       10
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
Selected Income Statement Data:

                                                  Year Ended December  31,
                                        1998      1997      1996      1995      1994
--------------------------------------------------------------------------------------
<S>                                   <C>       <C>       <C>       <C>       <C>
Net Sales                             $710,993  $666,294  $625,190  $564,211  $547,064
                                      ================================================
Income before cumulative effect
   of change in accounting principle  $ 60,095  $ 24,304  $ 43,339  $ 30,456  $ 41,322
Net income                            $ 60,095  $ 30,635  $ 43,339  $ 30,456  $ 41,322
Basic net income per share               $6.78     $3.42     $4.67     $3.19     $4.29
Diluted net income per share             $6.77     $3.42     $4.67     $3.19     $4.29
Common stock cash dividends:
   Declared per share                    $2.30     $2.08     $1.92     $1.80     $1.81
   Paid per share                        $2.25     $2.05     $1.90     $1.80     $1.78

<CAPTION>
Selected Balance Sheet Data:

                                                  Year Ended December  31,
                                        1998      1997      1996      1995      1994
--------------------------------------------------------------------------------------
<S>                                   <C>       <C>       <C>       <C>       <C>
Current assets                        $273,272  $222,775  $217,554  $212,611  $195,433
Current liabilities                     67,866    66,756    72,191    78,204    56,870
                                      ------------------------------------------------
Working capital                       $205,406  $156,019  $145,363  $134,407  $138,563
                                      ================================================
Total assets                          $391,985  $350,582  $330,997  $330,155  $304,088
Long-term obligations                 $ 20,581  $ 14,649  $ 11,823  $ 12,176  $ 12,914
Shareholders' equity - net            $267,525  $236,368  $232,933  $227,661  $221,538
Book value per outstanding share of
  common stock (1) (2)                  $32.01    $27.92    $27.45    $25.99    $25.30
</TABLE>

Certain reclassifications have been made to the above selected financial data to
conform to the method of presentation used in 1998.

(1)   See Note 13 to the Notes to Consolidated Financial Statements, Part II,
      Item 8, hereof.
(2)   Book value per outstanding share of common stock is computed based on
      shareholders' equity before deduction of employees' stock ownership and
      stock purchase plan notes.


                                       11
<PAGE>

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

(Dollars in thousands, except per share amounts)

OPERATING RESULTS 1998 VS. 1997

      The Company achieved record sales and net income for the year ended
December 31, 1998.

      Net sales of $710,993 in 1998 increased by $44,699, or 6.7% over 1997.
Excluding the effect of purchasing a majority interest in a retail operation in
July of 1997, net sales increased 3.9% for the year versus 1997.

      Net sales in the United States ("U.S.") of $621,513 increased by 8.4% as
compared to 1997. Excluding the effect of purchasing a majority interest in a
retail operation in July of 1997, net sales in the U.S. increased by 5.2%
compared to 1997, on unit volume growth of 7.3%. The difference between net
sales and unit volume growth rates was primarily due to a change in product mix.
Net sales to external customers in Canada for the current year were $74,345, a
decrease of 1.8%, on unit volume growth of 6.3%. The difference between Canadian
net sales and unit volume growth rates was primarily due to a decline in foreign
currency exchange rates. Excluding the effect of such exchange rate
fluctuations, 1998 Canadian net sales increased by 5.1% as compared to last
year.

      Gross margin increased from 41.6% in 1997 to 42.3% in 1998. The improved
gross margin in 1998 primarily resulted from manufacturing savings achieved from
the 1997 restructuring. These improvements were partially offset by an increase
in certain key raw material prices as well as the effect of additional retail
operations included in 1998.

      Selling, general and administrative expenses ("SG&A") of $197,453
decreased by $1,708 as compared to 1997. SG&A as a percentage of sales was 27.8%
in 1998 as compared to 29.9% in 1997. The decrease in SG&A results from
efficiencies achieved from the 1997 restructuring as well as the effects of
certain one-time charges recorded in 1997. Included in 1998 SG&A is
approximately $5,600 of impairment write-downs relating to identifiable assets,
intangibles and goodwill associated with the Company's investments in Benjamin
Moore Pacific Ltd. ("Pacific") and White Knight Paints Pty Ltd. ("White
Knight"). During the fourth quarter of 1998, the Company signed a memorandum of
understanding to sell certain assets of White Knight in early 1999. The
impending sale of such assets resulted in the Company recording certain
impairment losses in the fourth quarter of 1998. Also, due to recurring losses
at Pacific, the Company recorded additional write-downs associated with
long-lived assets in 1998. Recent assessments made of Pacific's long-lived
assets based on projections of undiscounted future cash flows from operations
indicated that the carrying value of such assets was not recoverable.

      The change in "other (income) expense, net" from expense to income
resulted from increased interest income on a higher average cash position during
1998 as compared to 1997. In addition, interest expense declined in 1998 due to
significantly reduced bank borrowings throughout 1998 as compared to 1997.

      Income before taxes, minority interest and cumulative effect of change in
accounting principle was $107,183, an increase of $62,478 compared to the
previous year. The increase is primarily attributable to the $33,388
restructuring charge recorded in 1997, efficiencies achieved in 1998 from the
restructuring, the Company's concerted effort to reduce SG&A spending and strong
sales volume growth. The effective income tax rate in 1998 was 42.8% as compared
to 45.9% in 1997. The reduction in the effective tax rate in 1998 is primarily
due to the effects of foreign operations on the Company's tax provision.

      As a result of the foregoing, the Company generated net income of $60,095
in 1998 as compared to $30,635 in 1997. Included in 1997's net income is the
1997 effect, and related cumulative effect, of the change from accelerated
methods to the straight-line method of calculating depreciation on property,
plant and equipment, as discussed in Note 2 to the Notes to the Consolidated
Financial Statements.

      Basic and diluted net income per share for 1998 were $6.78 and $6.77,
respectively, an increase of $3.36 and $3.35, respectively, compared to 1997.


                                       12
<PAGE>

OPERATING RESULTS 1997 vs. 1996

      Net sales of $666,294 in 1997 represented an increase of $41,104, or 6.6%,
over the comparable period in 1996. Excluding the effect of purchasing a
majority interest of a retail operation in July of 1997, net sales increased
4.2% for the year versus 1996.

      Net sales in the U.S. of $573,090 increased by 5.8% as compared to 1996,
primarily as a result of volume increases. Excluding the effect of purchasing a
majority interest in a retail operation in July of 1997, net sales in the U.S.
increased by 3.0% compared to 1996. Net sales to external customers in Canada
for 1997 were $75,710, an increase of 5.4%, also resulting from volume
increases.

      Gross margin increased from 38.8% in 1996 to 41.6% in 1997. The improved
gross margin in 1997 was the result of efficiencies in purchasing and
manufacturing as well as lower raw material costs as compared to 1996.

      During the third quarter of 1997, the Company changed its method of
computing depreciation on its fixed assets from accelerated methods used in
previous periods to the straight-line method, which became effective at the
beginning of 1997 (see Note 2 to the Notes to Consolidated Financial
Statements). The change was made to produce a more effective matching of the
depreciation expense of the assets to the revenue produced by them. The effect
on gross margin for 1997 resulted in an increase to gross margin of $1,734.
Excluding the change in depreciation, the Company's 1997 gross margin would have
been 41.4%. The change in depreciation method also reduced SG&A by $1,663 in
1997.

      SG&A increased by $32,791 in 1997, primarily as a result of several
factors. The Company sold approximately $12,500 of dealer notes receivable to a
bank and recorded additional expense relating to recourse provisions contained
in the agreement. The Company also recorded additional reserves on trade
accounts and notes receivable as a result of adverse developments with certain
customers and tightened credit policies during 1997. Approximately $4,400 of
impairment write-downs were recorded relating to identifiable assets,
intangibles and goodwill associated with the Company's investment in Pacific,
smaller domestic acquisitions and, to a lesser extent, deferred software/systems
costs. With respect to the write-downs of the identifiable intangibles and
goodwill, such assessments were made on the basis of recent projections of
undiscounted future cash flows from operations. The Company also recorded a
charge of approximately $3,500 for obsolete advertising materials associated
with SKU reductions and the discontinuation of certain products in 1997. Other
increases to SG&A reflect costs associated with higher sales volume and
increased advertising and promotion expenses, principally related to the
nationwide introduction of new products. These increases were partially offset
by the reduction in depreciation expense discussed above.

      During the third quarter of 1997, the Company recorded a pre-tax charge of
$33,388, including employee separation costs of $29,683, asset impairments of
$1,975 and other costs of $1,730 (see Note 18 to the Notes to Consolidated
Financial Statements). This charge was the result of the Company's plan to
streamline its operations by reducing its workforce, consolidating certain
manufacturing facilities and disposing of excess equipment at closed facilities.
This plan is expected to improve the Company's production operations through the
consolidation of manufacturing production facilities in those plants which are
the most cost effective. In connection with this plan, the Company closed two
plants in 1997, closed another in early 1998 and has offered severance programs
to affected employees. The charge also includes two Company-wide voluntary early
retirement programs which were offered to all eligible employees. In total, more
than 275 employees either accepted early retirement or received severance
benefits as a result of the plant closings and the consolidation of certain
functions. The costs of these programs, combined with the cost of other
severance arrangements for employees not eligible to retire and certain one-time
costs relating to pension and medical plan enhancements and curtailment charges
for these employees have been reflected in the restructuring charge as employee
separation costs. Finally, asset impairments and other costs included in the
restructuring charge consist of the write-down of property, plant and equipment
as well as estimated decommissioning and maintenance costs of the closed
facilities. As a result of the above mentioned restructuring, the Company
expects to realize significant future cost savings.

      The decrease in "other (income) expense, net" reflects lower interest
expense on reduced bank borrowings in the U.S. and Canada. During the second
half of 1997, there were no outstanding bank borrowings in the U.S. and Canadian
manufacturing operations. This decrease is also the result of increased interest
income from the significant cash balance on hand during the second half of 1997
as compared to 1996.


                                       13
<PAGE>

      Income before taxes, minority interest and cumulative effect of change in
accounting principle was $44,705, a decrease of $29,483 when compared to the
previous year due to the factors discussed above. The effective income tax rate
in 1997 was 45.9% as compared to 42.7% in 1996. The increase in the effective
tax rate in 1997 is due to increased losses in one of the Company's foreign
subsidiaries.

      As a result of the foregoing, the Company generated net income of $30,635
in 1997 as compared to $43,339 in 1996. Included in 1997's net income is the
1997 effect, and related cumulative effect, of the change from accelerated
depreciation methods to the straight-line method as previously discussed.

      Basic and diluted net income per share for 1997 was $3.42, a decrease of
$1.25, as compared to 1996.

FINANCIAL POSITION AND LIQUIDITY

      Net cash flows provided by operating activities were $91,244 in 1998,
which was $10,648 lower and $38,273 greater than in 1997 and 1996, respectively.
Cash flows from operations continues to be the primary source of financing the
Company's growth. The most significant elements affecting this decline compared
to 1997 were the effects from the 1997 restructuring. During 1998, the Company
paid approximately $9,000 in severance and other employee benefit costs, thus
reducing the restructuring reserve recorded in 1997. Though net sales were up
6.7% in 1998 compared to 1997, the Company was able to decrease short-term and
long-term accounts and notes receivable by $2,513 compared to a decrease of
$36,827 last year. A significant portion of the decrease in accounts and notes
receivable in 1997 resulted from the sale of $12,500 of dealer notes to a bank
and the tightened credit policies initiated in 1997.

      Net cash flows used in investing activities were $9,802 in 1998, a
decrease of $9,589 compared to 1997 and $1,098 compared to 1996. No major
construction projects were in progress during 1998 and overall capital spending
was flat compared to 1997 and 1996. Included in 1997's cash flows used in
investing activities is the purchase of a majority interest in a retail
operation in July of 1997.

      Net cash flows used in financing activities of $27,363 represented a
decrease of $22,358 and $14,692 over the two years prior. Cash flows relating to
financing activities were principally used for payment of dividends and the
purchase of treasury stock. The Company expects the purchase of treasury stock
to continue to decline since more and more shares are traded on the
over-the-counter bulletin board ("OTCBB"); see discussion above at Item 5,
"Market Price of the Registrants' Common Stock and Related Security Holder
Matters". During the three years ended December 31, 1998, 1997 and 1996, the
Company purchased 135,325, 165,075 and 434,580 shares, respectively, of its
common stock.

      The Company increased short-term borrowings, net by $655 in 1998, compared
to net repayments of $21,610 and $3,013 in 1997 and 1996, respectively. There
were no facility or line of credit borrowings by the U.S. and Canadian
manufacturing operations at December 31, 1998.

      Working capital increased to $205,406 at December 31, 1998 and the current
ratio increased to 4.0:1 from 3.3:1 for the comparable period last year. Cash
and cash equivalents were $97,249 at December 31, 1998, as compared to $43,899
at December 31, 1997, reflecting the Company's continued commitment to
strengthening its balance sheet and cash position. The Company maintains
excellent relations with its banks and other financial institutions that may
serve as available resources for future growth opportunities, if the need
arises.


                                       14
<PAGE>

      Year 2000

      The Year 2000 ("Y2K") issue is the result of computer programs which were
written using two digits rather than four digits to define the applicable year.
The Company is very much aware of the issues that Y2K will bring to its computer
systems and other equipment with embedded micro controllers. The Company is
actively addressing its information technology ("IT") infrastructure, including
hardware, software and facilities, with the goal of achieving substantial Y2K
compliance in all significant areas of its operations, including, to the extent
practicable, its relationships with vendors, suppliers and customers.

      During 1998, the Company established a Company-wide Y2K Program Team made
up of Company leaders and outside experts to establish a disciplined project
management approach, issue inventory and assessment guidelines and coordinate
worldwide Y2K compliance efforts. The Company's Y2K Program Team has oversight
responsibility for monitoring the compliance efforts.

      The program team developed a multi-phase approach to assessing and
resolving Y2K issues. These phases are:

      1. A review of the Company's end-to-end business processes. This phase
helped to create a thorough inventory of all date and non-date dependent
systems, internal and external stakeholders, vendors, customers and suppliers.
Materials, services and informational inputs and outputs were identified and
prioritized based on impacts to the business if any should fail as a result of a
Y2K problem.

      2. Assessment of all inventoried systems, applications and stakeholders to
identify and locate Y2K issues. The Company has established a data repository
for Y2K documentation. The database includes the information gathered in Phase
1. External stakeholders, vendors, suppliers and other entities were polled to
determine if they are Y2K compliant. Databases were researched for the current
status of available fixes for items identified with Y2K issues. Listings of
compliant and non-compliant items were generated. Planned and available fixes
are being documented for non-compliant items and have formed the basis for Phase
3-Test Planning.

      3. Test planning and remediation of systems presenting Y2K issues. This
step included the development of a detailed test plan based on the business
priority assessment of the items identified in Phases 1 and 2. Units and
applications were then tested. Based on the test results, a remediation plan was
developed to renovate, retire, re-host, replace, redevelop or outsource as
appropriate. Contingency plans are being developed at this time based on the
remediation plan.

      4. Testing/validating of systems to measure the effectiveness of the
remediation.

      5. Continued monitoring of the remedied systems for ongoing compliance.

      The Company recognizes the importance of resolving these issues at an
early date so as not to adversely impact its own operations or its relationships
with its customers and other third parties. The Company has active
implementation teams focusing on this program and has made it a high priority to
substantially complete its Y2K compliance efforts in a timely manner.

      Currently the results of the assessment and remediation efforts being
conducted under the Y2K program are as follows:

      o     IT AS400 Systems and Applications - Most of the Company's IT systems
            and applications have been made substantially Y2K compliant. All
            remaining systems and applications will be substantially compliant
            by the end of the first quarter of 1999.

      o     Embedded Systems - Embedded systems, which include building
            services, operations, network services, personal computers and
            non-IT applications have been inventoried and are currently under
            assessment to determine the appropriate course of action. A
            preliminary assessment of inventoried embedded systems was completed
            in December 1998. Business priorities will drive the development of
            contingency plans based on detailed assessment results and the
            impact on the business. Testing and remediation of non-compliant
            components is scheduled for substantial completion by mid-year 1999.

      o     Third Parties - The Company has also completed an inventory of its
            key business stakeholders, which includes customers, suppliers,
            vendors and third party agents and has assessed their impact on its
            business. The Company has issued and is continuing to issue requests
            for Y2K compliance status from its key business stakeholders.

            The majority of requests for stakeholder status have been received.
            Where possible, the Company is also working closely with each of its
            key business stakeholders to determine if their Y2K issues might
            impact the Company's business. Contingency plans will be established
            to mitigate the risk associated with each

                                       15
<PAGE>


            business stakeholders' response and the impact of non-compliance on
            the Company.

      The total estimated pre-tax cost for resolving Y2K issues is approximately
$2,000, with approximately $1,000 of expenditures planned for 1999. The Company
will incur costs that include internal resources, external consulting, software
and certain equipment upgrades. The majority of these costs relate to software
modifications. The $1,000 of costs incurred have been expensed in 1998. System
replacement costs have been, or will be, capitalized and expensed over their
estimated useful lives. The cost of new hardware and software for recent
replacements is not included in the Y2K costs, as the Company had already
planned to replace these systems and did not accelerate the replacement due to
Y2K issues.

      Although the Company anticipates minimal business disruption will occur as
a result of Y2K issues, there is no guarantee that possible "worst case" Y2K
issues of third party vendors and suppliers would not impact the Company. To
date, the Company has not completed a formal contingency plan for non-compliance
but continues to develop such plans based on the information obtained from third
parties with whom it has material relationships, as well as the completion of
the evaluation of its IT and non-IT systems.

      The foregoing discussion regarding the Y2K project's timing,
effectiveness, implementation and cost contains forward-looking statements,
which are based on management's best estimates derived utilizing numerous
assumptions of future events including the continued availability of certain
resources, third party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved, and actual results could
differ materially from those contemplated estimates. Specific factors that might
cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes and similar uncertainties and the
remediation success of the Company's customers and suppliers.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company operates internationally, resulting in exposure to foreign
exchange rate risk. This risk primarily relates to the consolidation of foreign
subsidiary earnings, resulting in a foreign currency translation adjustment.
This adjustment is included in the consolidated financial statements presented
in Part II, Item 8 herein.


                                       16
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The consolidated financial statements of the registrant and its
subsidiaries, together with notes thereto and the independent auditors' report,
are set forth on pages 18 through 37. The additional financial information set
forth in Part IV and included herein should be read in conjunction with the
consolidated financial statements.


                                       17
<PAGE>

INDEPENDENT AUDITORS' REPORT

BENJAMIN MOORE & CO.:

We have audited the accompanying consolidated balance sheets of Benjamin Moore &
Co. and Subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of income and comprehensive income, shareholders'
equity, and cash flows for each of the three years in the period ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Benjamin Moore & Co. and
Subsidiaries at December 31, 1998 and 1997, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1998 in conformity with generally accepted accounting principles.

As discussed in Note 2 to the consolidated financial statements, in 1997 the
Company changed its method of computing depreciation.


/s/ Deloitte & Touche LLP

February 17, 1999
Parsippany, New Jersey


                                       18
<PAGE>

Benjamin Moore & Co. and Subsidiaries

Consolidated Statements of Income
and Comprehensive Income

For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in thousands, except per share amounts)

                                                      1998       1997      1996
-------------------------------------------------------------------------------
Net Sales                                         $710,993   $666,294  $625,190
                                                  ------------------------------
Costs and Expenses:
   Cost of products sold                           410,103    388,994   382,556
   Selling, general and administrative             197,453    199,161   166,370
   Restructuring                                               33,388
   Other (income) expense, net                      (3,746)        46     2,076
                                                  ------------------------------
     Total costs and expenses                      603,810    621,589   551,002
                                                  ------------------------------
Income Before Taxes, Minority Interest
   and Cumulative Effect of Change in
   Accounting Principle                            107,183     44,705    74,188

Income Tax Provision                                45,922     20,500    31,672
                                                  ------------------------------
Income Before Minority Interest
   and Cumulative Effect of Change in
   Accounting Principle                             61,261     24,205    42,516

Minority Interest in Net Income (Loss) of
   Consolidated Subsidiaries                         1,166        (99)     (823)
                                                  ------------------------------
Income Before Cumulative Effect of
   Change in Accounting Principle                   60,095     24,304    43,339

Cumulative Effect of Change in
   Accounting Principle                                         6,331
                                                  ------------------------------
Net Income                                        $ 60,095   $ 30,635  $ 43,339
                                                  ------------------------------
Other Comprehensive Income, net of tax:

   Foreign Currency Translation Adjustment          (2,105)      (539)     (363)
   (Net of tax of $1,575, $457 and $271 for 1998,
   1997 and 1996, respectively)
                                                  ------------------------------
Comprehensive Income                              $ 57,990   $ 30,096  $ 42,976
                                                  =============================
Basic Net Income Per Share                           $6.78      $3.42     $4.67
                                                  =============================
Diluted Net Income Per Share                         $6.77      $3.42     $4.67
                                                  =============================
Cash Dividends Declared Per Share
   of Common Stock                                   $2.30      $2.08     $1.92
                                                  =============================
Pro forma amounts assuming new method of
   depreciation applied retroactively:

   Pro forma net income                           $ 60,095   $ 24,304  $ 45,471
                                                  =============================
   Pro forma basic net income per share              $6.78      $2.71     $4.90
                                                  =============================
   Pro forma diluted net income per share            $6.77      $2.71     $4.90
                                                  =============================

See Notes to Consolidated Financial Statements.


                                       19
<PAGE>

Benjamin Moore & Co. and Subsidiaries

Consolidated Balance Sheets

December 31, 1998 and 1997
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                          1998        1997
------------------------------------------------------------------------------------------
<S>                                                                  <C>         <C>
Assets
Current Assets:
   Cash and cash equivalents                                         $  97,249   $  43,899
   Accounts and notes receivable - net                                  83,100      83,966
   Inventories - net                                                    69,031      72,942
   Prepaid expenses and other current assets                             9,571       9,812
   Deferred income taxes                                                14,321      12,156
                                                                     ---------------------
      Total Current Assets                                             273,272     222,775
Investments in Temporary Co-Ownerships                                   5,701       8,886
Property, Plant and Equipment - net                                     86,651      88,062
Other Assets                                                            26,361      30,859
                                                                     ---------------------
                  Total                                              $ 391,985   $ 350,582
                                                                     =====================

Liabilities and Shareholders' Equity
Current Liabilities:
   Short-term borrowings and current portion of long-term
      debt                                                           $   7,397   $   6,595
   Accounts payable - trade                                             27,980      22,142
   Other liabilities and accrued expenses                               28,060      34,004
   Dividends payable                                                     4,429       4,015
                                                                     ---------------------
      Total Current Liabilities                                         67,866      66,756
                                                                     ---------------------
Pension and Other Long-Term Benefits                                    27,566      28,084
                                                                     ---------------------
Long-Term Obligations                                                   20,581      14,649
                                                                     ---------------------
Minority Shareholders' Interest in Net Assets of
   Consolidated Subsidiaries                                             8,447       4,725
                                                                     ---------------------
Shareholders' Equity:
   Preferred stock, $10 par value - authorized, 500,000 shares;
      issued - none
   Common stock, $10 par value - authorized, 40,000,000 shares;
      issued 13,164,312 at December 31, 1998 and 1997, respectively    131,643     131,643
   Additional paid-in capital                                           41,206      32,632
   Retained earnings                                                   268,949     229,251
   Accumulated other comprehensive income - foreign currency
      translation adjustment                                            (5,914)     (3,809)
   Cost of treasury stock; 4,307,430 shares and
      4,280,615 shares at December 31, 1998 and 1997, respectively    (152,380)   (141,683)
   Employees' stock ownership and stock purchase plan notes            (15,979)    (11,666)
                                                                     ---------------------
      Shareholders' Equity - Net                                       267,525     236,368
                                                                     ---------------------
                  Total                                              $ 391,985   $ 350,582
                                                                     =====================
</TABLE>

See Notes to Consolidated Financial Statements.


                                       20
<PAGE>

Benjamin Moore & Co. and Subsidiaries

Consolidated Statements of
Shareholders' Equity

For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                            Accumulated             Employees' Stock
                                                   Additional                  Other       Cost of   Ownership and
                                        Common       Paid-in     Retained  Comprehensive  Treasury   Stock Purchase
                                         Stock       Capital     Earnings     Income        Stock      Plan Notes
-----------------------------------------------------------------------------------------------------------------
<S>                                    <C>           <C>         <C>          <C>        <C>            <C>
Balance, January 1, 1996               $131,643      $31,564     $191,604     $(2,907)   $(105,837)     $(18,406)

   Net income for the year                                         43,339
   Foreign currency translation
      adjustment                                                                 (363)
   Cash dividends declared
      on common stock -
      $1.92 per share                                             (17,699)
   Sales and distribution of
      treasury stock - 272 shares                         16                                     1
   Treasury stock purchases -
      434,580 shares                                                                       (23,411)
   Dividends credited to ESPP notes,
      net of interest                                                                                        592
   Note payments                                                                                           2,797
                                       --------------------------------------------------------------------------
Balance, December 31, 1996              131,643       31,580      217,244      (3,270)    (129,247)      (15,017)

   Net income for the year                                         30,635
   Foreign currency translation
      adjustment                                                                 (539)
   Cash dividends declared
      on common stock -
      $2.08 per share                                             (18,628)
   Sale and distribution of
      treasury stock - 15,187 shares                   1,052                                    68          (890)
   Treasury stock purchases -
      165,075 shares                                                                       (12,504)
   Dividends credited to ESPP notes,
      net of interest                                                                                        593
   Note payments                                                                                           3,648
                                       --------------------------------------------------------------------------
Balance, December 31, 1997              131,643       32,632      229,251      (3,809)    (141,683)      (11,666)

   Net income for the year                                         60,095
   Foreign currency translation
      adjustment                                                               (2,105)
   Cash dividends declared
      on common stock -
      $2.30 per share                                             (20,397)
   Sale of treasury stock -
      108,510 shares                                   8,574                                   444        (8,150)
   Treasury stock purchases -
      135,325 shares                                                                       (11,141)
   Dividends credited to ESPP notes,
      net of interest                                                                                        691
   Note payments                                                                                           3,146
                                       --------------------------------------------------------------------------
Balance, December 31, 1998             $131,643      $41,206     $268,949     $(5,914)   $(152,380)     $(15,979)
                                       ==========================================================================
</TABLE>

See Notes to Consolidated Financial Statements.


                                       21
<PAGE>

Benjamin Moore & Co. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in thousands)

<TABLE>
<CAPTION>
                                                                         1998        1997         1996
------------------------------------------------------------------------------------------------------
<S>                                                                  <C>         <C>          <C>
Cash Flows From Operating Activities:
   Net income                                                        $ 60,095    $ 30,635     $ 43,339
   Cumulative effect of change in accounting principle                             (6,331)
                                                                     ---------------------------------
   Income before cumulative effect of change in accounting
     principle                                                         60,095      24,304       43,339
   Adjustments To Reconcile Net Income To Net Cash Flows
      Provided By Operating Activities:
         Restructuring charge                                                      28,901
         Depreciation and amortization                                  8,553       7,809       12,008
         Write-off of obsolete advertising materials                                3,444
         Write-off of goodwill, intangibles and other assets            6,894       4,364
         Deferred income taxes                                         (1,021)    (11,684)        (209)
         Minority interest in net income (loss) of consolidated
           subsidiaries                                                  1,166        (99)        (823)
         Loss on disposal of equipment                                     279         45           75
         Pension and other long-term benefits                          (1,578)      3,451        3,529
         Other                                                             812         43         (322)
      Changes In Assets and Liabilities:
         Decrease (increase) in accounts and notes receivable             269      30,024       (5,601)
         Decrease in inventories                                        1,133       1,962        2,633
         Decrease in notes receivable due after one year                2,244       6,803        1,818
         Increase (decrease) in accounts payable - trade                5,838      (1,768)      (3,487)
         Other                                                          6,560       4,293           11
                                                                     ---------------------------------
            Net Cash Flows Provided By Operating Activities            91,244     101,892       52,971
                                                                     ---------------------------------
Cash Flows From Investing Activities:
   Proceeds from sale of equipment                                        144          87           19
   Payments for purchase of property, plant, equipment
      and acquisitions                                                (10,550)    (19,547)     (11,412)
   Investments in temporary co-ownerships                                 (74)       (941)      (1,617)
   Proceeds from sales of temporary co-ownership interests                678       1,010        2,110
                                                                     ---------------------------------
            Net Cash Flows Used In Investing Activities                (9,802)    (19,391)     (10,900)
                                                                     ---------------------------------
Cash Flows From Financing Activities:
   Payment of dividends                                               (19,290)    (17,836)     (17,076)
   Payment of dividends to minority shareholders                         (303)       (287)        (252)
   Proceeds (repayments) of short-term borrowings, net                     655    (21,610)      (3,013)
   Proceeds from sale of treasury stock                                    870         68
   Payments for purchase of treasury stock                             (11,141)   (12,504)     (23,411)
   Repayments of long-term obligations                                 (1,300)     (1,200)      (1,100)
   Payments received on employees' stock ownership and
      stock purchase plan notes                                         3,146       3,648        2,797
                                                                     ---------------------------------
            Net Cash Flows Used In Financing Activities               (27,363)    (49,721)     (42,055)
                                                                     ---------------------------------
Effect Of Exchange Rate Changes On Cash                                  (729)       (246)          (7)
                                                                     ---------------------------------
Net Increase In Cash and Cash Equivalents                              53,350      32,534            9
Cash and Cash Equivalents At Beginning Of Year                         43,899      11,365       11,356
                                                                     ---------------------------------
Cash and Cash Equivalents At End Of Year                             $ 97,249    $ 43,899     $ 11,365
                                                                     =================================
Supplemental Cash Flow Information:
     Interest paid                                                   $    818    $  2,735     $  3,674
     Income taxes paid                                               $ 45,940    $ 30,505     $ 29,663

Supplemental Schedule of Noncash Investing
   and Financing Activities:
     Additions to obligations under capital leases                   $     71
     Issuance of employees' stock purchase plan notes                $  8,150    $    890
</TABLE>

See Notes to Consolidated Financial Statements.


                                       22
<PAGE>

Benjamin Moore & Co. and Subsidiaries

Notes to Consolidated Financial Statements

For the Years Ended December 31, 1998, 1997 and 1996
(Dollars in thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Basis of Presentation

      The financial statements include the operations of Benjamin Moore & Co.
and all majority-owned subsidiaries ("the Company") except for Temporary
Co-Ownerships as explained in Note 5 below. All balances and transactions
between subsidiaries are eliminated in consolidation.

      Cash and Cash Equivalents

      Cash and cash equivalents include commercial paper of $73,934 and a
short-term investment fund of $10,011 in 1998 and commercial paper of $37,654 in
1997, all with original maturities of less than three months. The carrying
amount of these investments approximates fair value.

      Inventories

      Inventories are valued at lower of cost or market, determined primarily by
the use of the last-in, first-out ("LIFO") method.

      Property, Plant and Equipment

      Property, plant and equipment is recorded at cost and is depreciated using
the straight-line method. The major classes of property along with their
estimated useful lives are set forth below:

                                                                      Estimated
Asset                                                               Useful Life
-------------------------------------------------------------------------------
Buildings                                                               40 yrs.
Machinery and equipment                                               5-10 yrs.
Furniture and fixtures                                                5-10 yrs.
Automobiles and trucks                                                 3-6 yrs.
Leasehold improvements                                       Over Life of Lease

      As discussed in Note 2, during 1997, the Company changed the method of
computing depreciation on its fixed assets and modified certain of its assets'
estimated useful lives.

      Intangible Assets

      Included in Other Assets, intangible assets resulting from acquisitions
amounted to $14,854 and $15,634 at December 31, 1998 and 1997, respectively, and
are valued at cost. These assets are being amortized over their estimated useful
lives, which range from six to thirty-five years. During 1998, 1997 and 1996,
amortization of such intangibles amounted to $2,033, $4,085 and $923,
respectively. Included in the 1998 and 1997 amortization of intangibles are the
effects of impairment write-downs of intangibles and goodwill associated with
the Company's investment in Benjamin Moore Pacific Limited ("Pacific"), White
Knight Paints Pty Ltd. ("White Knight") and other small acquisitions, amounting
to approximately $1,433 and $3,700, respectively.

      Long-Lived Assets

      The Company evaluates the recoverability of its long-lived assets over
their remaining useful lives by projecting operating cash flows to be generated
on an undiscounted basis. As of December 31, 1998, the Company believes that the
existing balances of its long-lived assets are recoverable.

      Revenue Recognition

      Revenues are recorded when products are shipped.


                                       23
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

      Pension Expense

      It is the Company's policy to fund all qualified pension costs based on
calculations made by independent actuaries. Unrecognized net assets are being
amortized over 16-2/3 years for the United States ("U.S.") plan and 15 years for
the Canadian plan.

      Stock Options

      The Company accounts for its stock options under the provisions of
Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock
Issued to Employees."

      Advertising Expenses

      The cost of advertising is expensed as incurred. Advertising expenses
amounted to $48,223, $44,626 and $37,659 in 1998, 1997 and 1996, respectively.

      Research and Development Costs

      Research and development and quality control expenditures amounted to
$13,091, $12,496 and $13,787 in 1998, 1997 and 1996, respectively. Quality
control expenditures aggregated $4,064, $3,943 and $3,928, respectively in 1998,
1997 and 1996 and are included herein because a substantial portion of such
expenditures is related to development projects.

      Provision for Income Taxes

      The Company and its 80% or more owned subsidiaries file a consolidated tax
return. The Company provides deferred income taxes on temporary differences
between amounts of assets and liabilities for financial reporting purposes and
such amounts as measured by enacted tax laws. Tax credits are included as a
reduction of income tax expense in the year the credits arise.

      Foreign Currency Translation

      All balance sheet accounts of foreign subsidiaries are translated to U.S.
dollars at current exchange rates and income statement accounts are translated
using the average exchange rates for the period. Adjustments for currency
exchange rate fluctuations are excluded from net income and reflected as a
separate component of shareholders' equity and comprehensive income.

      Estimates

      The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the year.
Actual results could differ from those estimates.

      New Accounting Pronouncements

      In 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." Comprehensive Income is defined as the total change in
shareholders' equity during the period from transactions other than with
shareholders. For the Company, Comprehensive Income is comprised of net income
and the net change in the accumulated foreign currency translation adjustment
account. The Company adopted the provisions of SFAS No. 130 in 1998.

      In 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information." SFAS No. 131, which the Company adopted in
1998, supercedes SFAS No. 14, "Financial Reporting for Segments of a Business
Enterprise." SFAS No. 131 requires the Company to report segment information in
line with the information used by management for making operating decisions and
assessing performance. SFAS No. 131 also requires disclosures about products and
services, geographic areas, and major customers. All information previously
presented under SFAS No. 14 has been modified to conform to the provisions of
SFAS No. 131 (see Note 16).


                                       24
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

      In 1998, the FASB issued SFAS No. 132, "Employers' Disclosures About
Pensions and Other Postretirement Benefits." As required by the standard, the
Company began reporting under SFAS No. 132 in 1998 (see Note 7). All information
previously presented under SFAS Nos. 87, 88 and 106 has been modified to conform
to the provisions of SFAS No. 132.

      Reclassifications

      Certain reclassifications have been made to the 1997 and 1996 financial
statements to conform to the method of presentation used in 1998.

2. CHANGE IN ACCOUNTING PRINCIPLE

      In 1997, the Company changed the method of computing depreciation on its
fixed assets from accelerated methods used in previous periods to the
straight-line method. The change was made because the straight-line method
better matches the depreciation costs of the assets to the revenue produced by
them. This change also makes the Company's depreciation policy more comparable
to the policies used within its industry. The retroactive application of the new
method resulted in a cumulative effect adjustment of $6,331 (net of $4,234 in
income taxes) which is included in net income for the year ended December 31,
1997. The effect of the change on the year ended December 31, 1997 was to
increase net income before the cumulative effect of the change in accounting
principle by $1,960 million ($.22 per share). In conjunction with this change,
the Company also changed estimated useful lives of certain of its assets to more
appropriately reflect the period of time over which such assets are expected to
generate revenues. Pro forma amounts are presented in the Statement of Income
and Comprehensive Income showing the effect of applying the new method
retroactively.

3. ACCOUNTS AND NOTES RECEIVABLE
                                                                December 31,
                                                             1998           1997
--------------------------------------------------------------------------------
Trade                                                     $92,456        $93,300
Other                                                       1,702          1,183
                                                          ----------------------
    Total                                                  94,158         94,483
Less allowance for doubtful accounts                       11,058         10,517
                                                          ----------------------
    Net                                                   $83,100        $83,966
                                                          ======================

      Trade notes receivable due after one year, net of reserves, amounted to
$2,667 and $4,911 at December 31, 1998 and 1997, respectively, and are included
in Other Assets in the accompanying Consolidated Balance Sheets. The carrying
amount of notes receivable approximates fair value.


                                       25
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

4. INVENTORIES

                                                                December 31,
                                                             1998           1997
--------------------------------------------------------------------------------
Finished goods                                           $ 41,759       $ 51,369
Raw materials                                              29,965         23,573
                                                         -----------------------
    Total                                                  71,724         74,942
Less reserve                                                2,693          2,000
                                                         -----------------------
    Net                                                  $ 69,031       $ 72,942
                                                         =======================

      If the first-in, first-out ("FIFO") method of inventory accounting, which
approximates current cost, had been used, inventory would have been $9,676 and
$13,817 greater than reported at December 31, 1998 and 1997, respectively.

      Work-in-process is not significant, due to the brief production cycle, and
is included with raw materials.

      During 1998, the reduction of inventory resulted in the liquidation of
certain LIFO layers. The liquidation reduced net income by approximately $601 or
$.07 per share.

5. INVESTMENTS IN TEMPORARY CO-OWNERSHIPS

    Investments in Temporary Co-Ownerships are carried at cost less a reserve
for impairments. These investments in the capital stock of retail paint stores
are non-interest bearing financing arrangements. All increases in equity from
earnings accrue solely to the benefit of the independent co-owners. The Company
sells its products to Temporary Co-Ownerships at the same prices and terms used
in transactions with other customers. A reasonable estimate of fair value of the
investments in Temporary Co-Ownerships could not be made without incurring
excessive costs.

6. PROPERTY, PLANT AND EQUIPMENT

                                                                December 31,
                                                             1998           1997
--------------------------------------------------------------------------------
Land                                                     $  8,468       $  8,012
Buildings                                                  62,490         65,489
Machinery, equipment and leasehold improvements           112,906        104,582
                                                         -----------------------
    Total                                                 183,864        178,083
Less accumulated depreciation and amortization             97,213         90,021
                                                         -----------------------
    Net                                                  $ 86,651       $ 88,062
                                                         =======================

7. EMPLOYEE BENEFITS

      Pension and Postretirement Plans

      The Company has retirement income plans covering substantially all
employees. The benefits are based upon years of service and the employee's
highest average compensation during any thirty-six consecutive full calendar
months of employment.

      The Company also provides medical and life insurance benefits that cover
U.S. and Canadian employees of the Company. Substantially all employees are
covered by a postretirement health care plan which is contributory for employees
retiring on or after January 1, 1993, with retiree contributions adjusted
annually; the life insurance plan is non-contributory. The accounting for the
health care plan anticipates future cost-sharing changes to the written plan
that are consistent with the Company's expressed intent to increase retiree
contributions each year by the same percent increase experienced by the net
incurred charges through 1998, after which all future cost increases will be
passed on to the retirees. As of December 31, 1998, the Company has not
established any specific funding policy for these plans.


                                       26
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

<TABLE>
<CAPTION>
                                                                         December 31,
                                                        Pension Benefits               Postretirement Benefits
------------------------------------------------------------------------------------------------------------------------------------
                                                      1998             1997               1998              1997
<S>                                               <C>              <C>                <C>               <C>
Change in benefit obligation
   Benefit obligation at beginning of year        $169,929         $145,372           $ 37,845          $ 29,315
   Service cost                                      3,588            3,839                492               540
   Interest cost                                    11,833           11,122              2,241             2,443
   Plan amendments                                     246
   Curtailment (gain) or loss                                        (4,571)                               5,887
   Exchange rate changes                            (1,100)            (642)              (262)             (763)
   Special termination benefits                                      10,074                                1,375
   Benefits paid                                   (10,474)          (8,884)            (2,947)           (2,184)
   Participant contributions                                                               171               160
   Actuarial loss or (gain)                          8,148           13,619             (2,898)            1,072
                                                  ---------------------------------------------------------------
   Benefit obligation at end of year               182,170          169,929             34,642            37,845
                                                  ---------------------------------------------------------------

Change in plan assets
   Fair value of plan assets at
     beginning of year                             185,306          161,562
   Actual return on plan assets                     31,105           34,506
   Employer contributions                              304              257              2,776             2,024
   Participant contributions                                                               171               160
   Exchange rate changes                            (1,215)            (784)
   Benefits paid                                   (10,474)          (8,884)            (2,947)           (2,184)
   Administrative expenses                          (1,579)          (1,351)
                                                  ---------------------------------------------------------------
   Fair value of plan assets at end of year        203,447          185,306
                                                  ---------------------------------------------------------------

Reconciliation of funded status
   Funded status                                    21,277           15,377            (34,642)          (37,845)
   Unrecognized actuarial (gain) or loss           (25,867)         (20,561)              (973)            1,989
   Unrecognized transition (asset) or
      obligation                                    (2,479)          (3,163)            15,850            17,112
   Unrecognized prior service cost                   3,014            3,121
                                                  ---------------------------------------------------------------
   Net amount recognized at year-end              $ (4,055)        $ (5,226)          $(19,765)         $(18,744)
                                                  ===============================================================

Amounts recognized in the consolidated
   balance sheets consist of:
   Prepaid benefit cost                           $  2,172         $  2,108
   Accrued benefit liability                        (6,695)          (8,220)          $(19,765)         $(18,744)
   Intangible asset                                    468              886
                                                  ---------------------------------------------------------------
   Net amount recognized at year-end              $ (4,055)        $ (5,226)          $(19,765)         $(18,744)
                                                  ===============================================================
</TABLE>

The weighted-average assumptions employed at December 31, 1998 and 1997 were:

<TABLE>
<CAPTION>
                                                        Pension Benefits                Postretirement Benefits
------------------------------------------------------------------------------------------------------------------------------------
                                                      1998          1997                    1998          1997
<S>                                                   <C>           <C>                    <C>           <C>
Discount rate                                         6.75%         7.00%                   6.75%         7.00%
Expected return on plan assets                        9.00%         9.00%
Rate of compensation increase                         4.00%         4.00%
Health care cost trend rate*                                                               11.30%        11.00%
</TABLE>

*  Assumed to decrease to 6% by 2009 and remain at that level thereafter.


                                       27
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

     Net pension and postretirement benefit costs include the following
components:

<TABLE>
<CAPTION>
                                                 Pension Benefits             Postretirement Benefits
------------------------------------------------------------------------------------------------------
                                             1998       1997       1996        1998      1997     1996
<S>                                      <C>        <C>       <C>            <C>       <C>      <C>
Service cost                             $  3,588   $  3,839  $   4,221      $  492    $  540   $  530
Interest cost                              11,833     11,122     10,441       2,241     2,444    1,788
Expected return on plan assets            (16,049)   (14,354)   (12,674)
Amortization of prior service cost            333        354        361
Amortization of transitional (asset)
   or obligation                             (596)      (613)      (617)      1,120     1,519    1,107
Recognized actuarial (gain) or loss          (117)       (15)        (9)         31
                                         -------------------------------------------------------------
Net periodic benefit cost                $ (1,008)  $    333  $   1,723      $3,884    $4,503   $3,425
                                         =============================================================
</TABLE>

      As described in Note 18, the Company offered two voluntary early
retirement programs during 1997 that provided employees electing to retire
within the prescribed period with enhanced benefits. During 1997, the Company
recorded net charges for enhanced pension and other postretirement benefits of
$5,777 and $8,696, respectively.

      Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plan. A one-percentage point change in
assumed health care cost trend rates would have the following effects:

<TABLE>
<CAPTION>
                                                             One-Percentage-          One-Percentage-
                                                             Point Increase           Point Decrease
<S>                                                               <C>                     <C>
Effect on total of service and interest cost
   components for 1998                                            $103                    $ (80)

Effect on year-end 1998 postretirement
   benefit obligation                                              676                     (521)
</TABLE>

      Postemployment Benefits

      The Company accrues for benefits provided to former or inactive employees
after employment but before retirement. The liability related to these benefits
at December 31, 1998 is approximately $1,933 and is recorded in Pension and
Other Long-Term Benefits.

      Employees' Stock Ownership Plan

      The Company maintains a qualified Employees' Stock Ownership Plan ("ESOP")
covering substantially all of its U.S. employees. The Board of Directors of the
Company is authorized to make contributions from time to time to the plan trust
fund.


                                       28
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

      In 1989, the Company and its ESOP entered into a leveraged transaction
whereby the Company borrowed $10,000 from a bank and loaned such funds to the
ESOP. The ESOP used the loan proceeds to purchase, as restated to reflect the
1990 stock dividend, 239,792.236 shares of the Company's common stock; 87,590
shares from estates and 152,202.236 shares from the Company's treasury stock
account. The bank loan bears interest at 7.85% and is payable in ten graduated
annual installments through June 30, 1999. Based upon the borrowing rates
currently available to the Company for bank loans with similar terms and average
maturities, the carrying value of the bank loan approximates its current fair
value. The common stock purchased by the ESOP is held by the ESOP trustees as
collateral for the loan from the Company to the ESOP in a restricted account.
Each year the Company will make contributions to the plan, which the plan's
trustees will use to repay the loan from the Company in an amount sufficient for
the Company to make interest and principal payments on the loan. The
collateralized shares of common stock will be released from restriction and
allocated to participating employees annually, as of December 31, based upon the
percentage of debt service paid during the year then ended to the projected
total amount of debt service to be paid under the loan agreement.

      Contributions to the ESOP amounted to $1,369, $1,317 and $1,272 in 1998,
1997 and 1996, respectively. The fair value of the shares held by the ESOP was
$32,943 and $33,592 at December 31, 1998 and 1997, respectively.

      The Company's Canadian subsidiary maintains a similar plan which covers
substantially all of the Canadian Company's employees. The Canadian subsidiary
contributed approximately $236, $217 and $183 to the Canadian plan trust fund in
1998, 1997 and 1996, respectively.

      Stock Option and Stock Incentive Plans

      During 1993, the Company adopted a Stock Option Plan ("1993 Plan"). The
1993 Plan provides for the granting of non-statutory stock options to officers
and other employees of the Company. Options for the purchase of 400,000 shares
of common stock, par value $10 per share, could be granted. The options began
vesting on the second anniversary of the grant date and vest over the succeeding
two years. The options also become fully vested upon retirement or death.
Expiration is ten years from date of grant, six months after retirement or
ninety days after termination.

      In 1998, a new Stock Incentive Plan ("1998 Plan") was adopted by the
Company. Grants under the 1993 Plan were frozen. Options for the purchase of
400,000 shares of stock, par value of $10 per share, may be granted. Vesting
occurs over a four year period beginning one year after grant date. The options
also become fully vested upon death. Expiration is ten years from date of grant,
five years after retirement or three months after termination.

      Pursuant to SFAS No. 123, "Accounting for Stock-Based Compensation," the
Company has elected to account for its employee stock option plans under APB 25.
Accordingly, no compensation cost has been recognized for these plans. Had
compensation cost for the plans been determined based on the fair value at the
grant date consistent with SFAS No. 123, the Company's net income and income per
share would have been as follows:

                                             Year Ended December 31,
                                     --------------------------------------
                                       1998              1997         1996
---------------------------------------------------------------------------
Net income
   As reported                       $60,095          $30,635       $43,339
   Pro forma                          60,095           29,881        42,599
Net income per common share
Basic
   As reported                         $6.78            $3.42         $4.67
   Pro forma                            6.78             3.36          4.59
Diluted
   As reported                         $6.77            $3.42         $4.67
   Pro forma                            6.77             3.36          4.59


                                       29
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

      The fair value of each option grant is estimated on the date of grant
using the Binomial option-pricing model with the following weighted average
assumptions:

                                               Year Ended December 31,
                                         ----------------------------------
                                         1998          1997           1996
---------------------------------------------------------------------------

Interest rate                            5.26%         6.35%          6.44%
Dividend yield                           2.71%         2.62%          2.63%

Expected volatility                        15%           15%            16%
Expected life in years                     10            10             10

      Stock option activity for both the 1993 and 1998 plans were as follows:

                                               1998        1997        1996
---------------------------------------------------------------------------
Outstanding, January 1                      195,122     229,357     229,357
Granted                                     159,000      26,000
Exercised                                    (8,310)     (2,085)
Canceled                                    (33,360)    (58,150)
                                            -------------------------------
Outstanding, December 31                    312,452     195,122     229,357
Exercisable                                 127,452     169,122     152,904
Available for grant                         241,000     204,878     170,643
Weighted average price:
   Outstanding, beginning of year            $73.50      $73.26      $73.26
   Granted                                    83.06       75.09
   Exercised                                  73.26       73.26
   Canceled                                   73.26       73.26
   Outstanding, end of year                   78.40       73.50       73.26
   Exercisable, end of year                   73.26       73.26       73.26
   Weighted average fair value of
      options at grant date                   18.69       16.91

The following table summarizes information about stock options outstanding at
December 31, 1998:

                                                           Weighted Average
                                         Weighted Average     Remaining
    Price           Number Outstanding    Exercise Price   Contractual Life
---------------------------------------------------------------------------
$  70 to 75               137,452              73.26          4.7 Years

   76 to 80                18,500              76.74          8.6

   81 to 85               156,500              83.11          9.2

      The following table summarizes information about stock options exercisable
at December 31, 1998:

                                                           Weighted Average
    Price                         Number Exercisable       Exercise Price
---------------------------------------------------------------------------
$ 70 to 75                             127,452                 $73.26


                                       30
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

8. SHORT-TERM BORROWINGS

      Information regarding the Company's arrangements with banks in the U.S.,
Canada, New Zealand and Australia for short-term lines of credit follows:

                                                             December 31,
                                                           1998        1997
---------------------------------------------------------------------------
Outstanding borrowings                                  $ 5,576     $ 4,967

Weighted average interest rate on outstanding
   borrowings                                              6.4%        6.5%

Unused portion of lines of credit                       $78,075     $89,659

      There are no significant compensating cash balances or commitment fees
that relate to the above arrangements. Due to the short maturity of these
borrowings, the carrying amount approximates fair value.

9. OTHER LIABILITIES AND ACCRUED EXPENSES

                                                         December 31,
                                                    1998               1997
---------------------------------------------------------------------------
Income taxes payable                             $ 5,018            $ 3,285
Restructuring reserve - current portion            1,002             11,311
Salaries, wages and commissions                    6,970              6,568
Customer discounts and allowances                  5,614              4,129
Other                                              9,456              8,711
                                                 --------------------------
     Total                                       $28,060            $34,004
                                                 ==========================

      The current portion of the restructuring reserve shown above primarily
consists of dismantling and facility costs.

10. ENVIRONMENTAL MATTERS

      The Company operates in an industry subject to extensive environmental
regulations and is subject to potential liability under various claims and legal
actions which are pending or may be asserted in the future against the Company
regarding environmental remediation matters. Estimates of the future costs to be
incurred relating to such matters are necessary due to various uncertainties
surrounding remediation procedures, including the development of new
technologies, the enactment of additional regulations, the identification of new
sites for which the Company could be a potentially responsible party ("PRP") and
the apportionment of responsibility among identified PRPs in addition to the
Company. The Company establishes reserves for environmental matters when
remediation expenditures are probable and estimable. It is reasonably possible
that the final resolution of some of these matters may require significant
expenditures by the Company in excess of its existing reserves.

      The Company has accrued approximately $3,980 for estimated potential
cleanup costs based upon its monitoring of ongoing activities and its past
experience with these matters.


                                       31
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

11. LONG-TERM OBLIGATIONS

      Included in long-term obligations is long-term debt as follows:

                                                               December 31,
                                                           1998             1997
--------------------------------------------------------------------------------
ESOP loan payable                                        $1,400           $2,700
Bank debt (interest ranging from 6% - 11%)                1,775            1,332
                                                         -----------------------
     Total                                                3,175            4,032
Less current maturities                                   1,821            1,628
                                                         -----------------------
     Long-term debt                                      $1,354           $2,404
                                                         =======================

      Aggregate maturities of long-term debt are as follows: 1999 - $1,821;
2000 - $345; 2001 - $340; 2002 - $175; 2003 - $44; and $450 thereafter.

      At December 31, 1998 and 1997, the Company was contingently liable for
guarantees of indebtedness owed by third parties in the amount of $17,754 and
$16,800, respectively, relating to financing arrangements between a bank and
such third parties, to whom the Company sells merchandise. It is not practical
to estimate the fair value of the guarantee. As of December 31, 1998, the
Company has a reserve of $6,038 included in Long-Term Obligations for recourse
provisions under these financing arrangements.

12. LEASES

      The Company leases data processing equipment, buildings, transportation
equipment, autos and miscellaneous equipment under operating leases expiring at
various dates.

      Minimum future obligations under leases as of December 31, 1998 are as
follows:

Year ending December 31,                                                Total
-----------------------------------------------------------------------------
1999                                                                  $ 8,061

2000                                                                    7,361

2001                                                                    5,685

2002                                                                    3,475

2003                                                                    2,987

Thereafter                                                              6,090
                                                                      -------
   Total minimum lease payments                                       $33,659
                                                                      =======

      Rent expense on operating leases was approximately $10,375, $9,857 and
$8,291 for the years ended December 31, 1998, 1997 and 1996, respectively.


                                       32
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

13. SHAREHOLDERS' EQUITY

      In 1978, the Board of Directors, with shareholder approval, adopted an
Employees' Stock Purchase Plan ("ESPP"). Under the Plan, as restated to reflect
stock dividends, up to an aggregate of 1,600,000 shares of Common Stock held in
treasury may be offered and sold from time to time to employees of the Company
and its subsidiaries at the fair value price per share as determined by an
independent appraisal firm at the date of offering. Since 1979, 738,165 shares
have been sold to employees under the Plan.

      Notes receivable outstanding with respect to the above referenced Plan, as
well as the 1993 and 1998 Stock Option Plans and the ESOP note receivable, are
reflected in the balance sheets as reductions in shareholders' equity. The notes
received by the Company relative to the ESPP offerings since 1991 are
non-interest bearing. Notes received by the Company relative to the 1993 and
1998 Plans bear interest at the then-current rates of interest.

      Treasury stock is reflected at acquisition value, determined by the use of
the FIFO method. Sales and distributions of treasury shares are recorded at fair
value price per share. Any excess of such fair value proceeds over the FIFO cost
is reflected as additional paid-in capital.

      A reconciliation of the number of common shares outstanding is as follows:

                                                   Shares of Common Stock
                                             Issued     Treasury     Outstanding
--------------------------------------------------------------------------------
Balance, January 1, 1996                   13,164,312   3,696,419    9,467,893

Sale and distribution of treasury stock                      (272)         272

Treasury stock purchases                                  434,580     (434,580)
                                           ------------------------------------

Balance, December 31, 1996                 13,164,312   4,130,727    9,033,585

Sale and distribution of treasury stock                   (15,187)      15,187

Treasury stock purchases                                  165,075     (165,075)
                                           ------------------------------------

Balance, December 31, 1997                 13,164,312   4,280,615    8,883,697

Sale of treasury stock                                   (108,510)     108,510

Treasury stock purchases                                  135,325     (135,325)
                                           ------------------------------------

Balance, December 31, 1998                 13,164,312   4,307,430    8,856,882
                                           ====================================


                                       33
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

14. EARNINGS PER SHARE

      The components of the denominator for basic and diluted net income per
common share are as follows:

<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                                      -----------------------------------
                                                           1998         1997         1996
-----------------------------------------------------------------------------------------
<S>                                                   <C>          <C>          <C>
Basic net income per common share:
   Weighted average common shares outstanding         8,860,662    8,960,374    9,279,127
Diluted net income per common share:
   Stock options assumed to be exercised                 12,497        4,761
                                                      -----------------------------------
Denominator for diluted earnings per common share     8,873,159    8,965,135    9,279,127
                                                      ===================================
</TABLE>

      In 1997, the Company changed its method of computing depreciation (see
Note 2). This change resulted in basic and diluted net income per common share
of income before cumulative effect of change in accounting principle of $2.71
and basic and diluted net income per share of $.71 for the cumulative effect of
change in accounting principle.

15. INCOME TAXES

      The composition of the income tax provision is as follows:

                                            1998            1997            1996
--------------------------------------------------------------------------------

Federal income taxes:
     Current                             $34,971        $ 24,629         $23,054
     Deferred                             (1,214)        (11,684)             52
                                         ---------------------------------------
        Total federal                     33,757          12,945          23,106
                                         ---------------------------------------
State and local income taxes
     Current                               8,267           3,523           5,148
     Deferred                                193
                                         ---------------------------------------
        Total state and local              8,460           3,523           5,148
Foreign income taxes                       3,705           4,032           3,418
                                         ---------------------------------------
      Total                              $45,922        $ 20,500         $31,672
                                         =======================================


                                       34
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

      Deferred income taxes represent the tax effects of differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, and are comprised of the following:

                                                                 December 31,
                                                             1998           1997
--------------------------------------------------------------------------------
Deferred Tax Assets:
Pension and employee benefit related items                $ 9,436       $ 9,713
Accounts receivable and recourse reserves                   5,063         4,621
Restructuring                                               1,030         4,327
Inventory reserves                                          3,372         3,098
Claims reserves                                             2,464         2,204
Miscellaneous reserves                                      2,213         1,791
Foreign items                                               3,394
State deferred taxes                                        2,107
Other                                                       2,615         1,409
                                                          ----------------------
     Total deferred tax assets                             31,694        27,163
Valuation allowance                                        (2,542)
                                                          ----------------------
     Net deferred tax assets                              $29,152       $27,163
                                                          ======================

Deferred Tax Liabilities:

Property, plant and equipment                             $ 9,152       $ 8,557
Temporary Co-Ownership related items                        2,679         2,306
                                                          ----------------------
     Total deferred tax liabilities                       $11,831       $10,863
                                                          ======================

      Net long-term deferred tax assets of $3,000 are reflected in Other Assets.

      At December 31, 1998, the Company has a valuation allowance recorded
against available foreign tax credits and certain other foreign related items.
Management believes it is more likely than not that the benefits related to
these items may not be realized.

      The Company has available for utilization $509 of foreign tax credits.
Such credits expire as follows: 1999 - $58; 2000 - $233; 2001 - $140; and 2002 -
$78.

      A reconciliation of the statutory federal tax rate and effective tax rate
is as follows:

                                            1998           1997           1996
-------------------------------------------------------------------------------
Statutory tax rate                          35.0%          35.0%          35.0%
Effect of:
     State and local income taxes            5.1            5.1            4.5
     Foreign income taxes                    2.4            5.0            2.5
     Valuation allowance                     1.6
     Other - net                            (1.3)            .8             .7
                                            -----------------------------------
Effective tax rate                          42.8%          45.9%          42.7%
                                            ===================================

      The Company does not accrue Federal income taxes on its equity in the
undistributed earnings of its Canadian subsidiary, which amounted to $36,175,
$33,619 and $30,293 at December 31, 1998, 1997 and 1996, respectively, because
the Company intends to reinvest such earnings indefinitely.


                                       35
<PAGE>

Notes to Consolidated Financial Statements
(Continued)

16. SEGMENT INFORMATION

      The Company manufactures and sells coatings for use by the general public
and industrial and commercial users in the U.S., Canada, New Zealand and
Australia. Transfers between geographic areas are eliminated in consolidation.
The Company has two reportable segments - (1) U.S. and (2) Canada. Business
groups within these two segments are trade sales coatings, production finishes
coatings, and retail. Also included in the Company's consolidated financial
statements, but not considered a reportable segment, are the international
businesses in Australia and New Zealand.

      The accounting policies of the segments are the same as those described in
Note 1. Segment data includes intersegment net sales. The Company evaluates the
performance of its segments based upon net sales to external customers and net
income (loss).

      The Company does not have any customers to which sales exceed 10% of total
sales.

      Assets and operating results by reportable segment and geographic area are
as follows:

<TABLE>
<CAPTION>
                                                        All     Reconciling   Consolidated
        1998              United States    Canada     Others       Items         Totals
                          -------------    ------     ------       -----         ------

<S>                         <C>            <C>       <C>        <C>             <C>
Net Sales                   $621,513       $80,637   $15,135    $ (6,292)(a)    $710,993

Net Sales to External
Customers                   $621,513       $74,345   $15,135                    $710,993

Net Income (Loss)           $ 61,205       $ 4,350   $(1,264)   $ (4,196)(a)    $ 60,095

Total Assets                $364,320       $43,077   $10,200    $(25,612)(b)    $391,985

        1997

Net Sales                   $573,090       $80,396   $17,494    $ (4,686)(a)    $666,294

Net Sales to External
Customers                   $573,090       $75,710   $17,494                    $666,294

Net Income (Loss)           $ 29,448       $ 4,043   $(2,818)   $    (38)(a)    $ 30,635

Total Assets                $327,182       $43,266   $11,308    $(31,174)(b)    $350,582

        1996

Net Sales                   $541,829       $75,968   $11,539    $ (4,146)(a)    $625,190

Net Sales to External
Customers                   $541,829       $71,822   $11,539                    $625,190

Net Income (Loss)           $ 43,537       $ 3,519   $(1,719)   $ (1,998)(a)    $ 43,339
</TABLE>


                                       36
<PAGE>

Notes to Consolidated Financial Statements
(Concluded)

      Reconciling items primarily consist of (a) the elimination of sales and
cost of sales between segments, and (b) the elimination of intersegment
investments and advances.

      The following table represents net sales to external customers by business
group:

                                            1998             1997           1996
--------------------------------------------------------------------------------
Trade Sales Coatings                    $601,583         $585,052       $563,957
Production Finishes Coatings              55,054           51,375         51,995
Retail                                    54,356           29,867          9,238
                                        ----------------------------------------
      Total                             $710,993        $ 666,294       $625,190
                                        ========================================

17. OTHER (INCOME) EXPENSE, NET

      The components of other (income) expense, net are as follows:

                                                 1998          1997        1996
--------------------------------------------------------------------------------
Other income                                   $(5,530)     $(2,663)    $(1,698)
Interest expense                                   927        2,664       3,626
Net loss on the disposal of fixed assets           279           45          75
Other expenses                                     578                       73
                                               ---------------------------------
      Net                                      $(3,746)     $    46     $ 2,076
                                               =================================

18. RESTRUCTURING

      During the third quarter of 1997, the Board of Directors approved and
implemented a strategic restructuring program designed to improve operating
efficiency and industry competitiveness. This plan resulted in the Company
recording a pre-tax charge of $33,388 including employee separation costs of
$29,683 and asset impairments and other charges of $3,705. The Company
streamlined its operations by reducing its workforce, consolidating certain
manufacturing facilities and disposing of excess equipment.

      Over 90% of all separations were completed by December 31, 1997 with the
remainder being completed during 1998. Exclusive of pension and postretirement
enhancements, the remaining restructuring liability as of December 31, 1998,
relating primarily to dismantling and facility costs, is $2,762. During 1998 and
1997, cash payments charged against the reserve were $9,019 and $4,400,
respectively.


                                       37
<PAGE>

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

      Reference is made to the information set forth under the captions (i)
"ELECTION OF DIRECTORS" at pages 4 and 5 and "Section 16(a) Beneficial Ownership
Reporting Compliance" at page 22 of the Company's Proxy Statement dated March
18, 1999, for use in connection with its 1999 Annual Meeting of Shareholders,
which information is hereby incorporated by reference, and (ii) "EXECUTIVE
OFFICERS OF THE REGISTRANT" at pages 9 and 10 of this Annual Report on Form
10-K.

ITEM 11. EXECUTIVE COMPENSATION

      Reference is made to the information set forth under the caption "DIRECTOR
COMPENSATION", "EXECUTIVE COMPENSATION" and "SEVERANCE ARRANGEMENTS" at pages 8
- 12 and 17 of the Company's Proxy Statement dated March 18, 1999, for use in
connection with its 1999 Annual Meeting of Shareholders, which information is
hereby incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      (a) Security Ownership of Certain Beneficial Owners

      Reference is made to the information set forth under the caption
"PRINCIPAL SHAREHOLDERS" at pages 2 and 3 of the Company's Proxy Statement dated
March 18, 1999, for use in connection with its 1999 Annual Meeting of
Shareholders, which information is hereby incorporated by reference.

      (b) Security Ownership of Management

      Reference is made to the information set forth under the caption "ELECTION
OF DIRECTORS - Ownership of Securities by Nominees and Directors" at pages 6 and
7 of the Company's Proxy Statement dated March 18, 1999, for use in connection
with its 1999 Annual Meeting of Shareholders, which information is hereby
incorporated by reference.

      (c) Changes in Control

      To the knowledge of the Company, there are no arrangements the operation
of which may at a subsequent date result in a change in control of the Company.


                                       38
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Reference is made to the information set forth under the caption
"COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" at page 12 of the
Company's Proxy Statement dated March 18, 1999, for use in connection with its
1999 Annual Meeting of Shareholders, which information is hereby incorporated by
reference.

                                     PART IV

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

(a)  (1) List of Financial Statements Included Under Item 8
         of this Report

         Independent Auditors' Report                                 18

         Consolidated Statements of Income and Comprehensive
             Income for the Years Ended December 31,
             1998, 1997 and 1996                                      19


         Consolidated Balance Sheets, December 31, 1998
             and 1997                                                 20

         Consolidated Statements of Shareholders' Equity for
             the Years Ended December 31, 1998, 1997 and 1996         21

         Consolidated Statements of Cash Flows for the Years
             Ended December 31, 1998, 1997 and 1996                   22

         Notes to Consolidated Financial Statements for the Years
             Ended December 31, 1998, 1997 and 1996                23 - 37

     (2) Financial Statement Supplemental Schedule

         II       Consolidated Valuation and Qualifying Accounts
                  For the Years Ended December 31, 1998, 1997
                  and 1996                                            44

      All other schedules for which provision is made in the applicable
regulations of the Securities and Exchange Commission are omitted because of the
absence of conditions under which they are required or because the information
required thereby is shown in the financial statements or notes thereto.

      The individual financial statements of the Company have been omitted
because the Company is primarily an operating Company and all subsidiaries are
included in the consolidated financial statements being filed. In addition, in
the aggregate, such subsidiaries do not have minority equity interests and/or
indebtedness to any person other than the Company or its consolidated
subsidiaries in amounts which together exceed 5 percent of the total assets of
the Company at December 31, 1998 and 1997.


                                       39
<PAGE>

      (b) Reports on Form 8-K

      No reports on Form 8-K have been filed by the Company during the last
      quarter of the fiscal year ended December 31, 1998.

(c) List of Exhibits

      (3) Restated Certificate of Incorporation and Bylaws of the Company.

            (i)   Restated Certificate of Incorporation of the Company
                  (incorporated herein by reference to Exhibit 3(a) of the
                  Company's Registration Statement under the Securities Act of
                  1933, as amended, on Form S-1 Registration No. 2-62626).

                  Reference is made to the information set forth under the
                  caption "Amendment of the Restated Certificate of
                  Incorporation" at pages 10 and 11 of the Company's Proxy
                  Statement dated March 22, 1985, for use in connection with its
                  1985 Annual Meeting of Shareholders, which information is
                  hereby incorporated by reference.

                  Reference is made to the information set forth under the
                  caption "Limitation of Liability of Directors and Officers to
                  the Maximum Extent Permitted by New Jersey Law" at pages 10,
                  11, 12 and 13 of the Company's Proxy Statement dated March 28,
                  1988, for use in connection with its 1988 Annual Meeting of
                  Shareholders, which information is hereby incorporated by
                  reference.

                  Reference is made to the information set forth under the
                  caption "Amendment of the Restated Certificate of
                  Incorporation" at pages 11 and 12 of the Company's Proxy
                  Statement dated March 21, 1989, for use in connection with its
                  1989 Annual Meeting of Shareholders, which information is
                  hereby incorporated by reference.

                  Reference is made to the information set forth under the
                  caption "Amendment of the Certificate of Incorporation" at
                  pages 15, 16 and 17 of the Company's Proxy Statement dated
                  March 28, 1994, for use in connection with its 1994 Annual
                  Meeting of Shareholders, which information is hereby
                  incorporated by reference.

            (ii)  Bylaws of the Company (incorporated herein by reference to
                  Exhibit 3(b) of the Company's Registration Statement under the
                  Securities Act of 1933, as amended, on Form S-1 - Registration
                  No. 2-62626).

                  Reference is made to the information set forth under the
                  caption "Indemnification of Directors, Officers and Employees"
                  at pages 13 and 14 of the Company's Proxy Statement dated
                  March 28, 1988, for use in connection with its 1988 Annual
                  Meeting of Shareholders, which information is hereby
                  incorporated by reference.

                  Reference is made to the information set forth under the
                  caption "Approval of Amendments of the Company Bylaws" at
                  pages 17 through 21 of the Company's Proxy Statement dated
                  March 28, 1994, for use in connection with its 1994 Annual
                  Meeting of Shareholders, which information is hereby
                  incorporated by reference.


                                       40
<PAGE>

            (10)  Material Contracts

            (iii) (A) Employees' Stock Purchase Plan of the Company
                      (incorporated herein by reference to Exhibit 4(a) of the
                      Company's Registration Statement under the Securities Act
                      of 1933, as amended, on Form S-8 - Registration No. 
                      33-2694).

                      Reference is made to the information set forth under the
                      caption "Amendment of Employees' Stock Purchase Plan" at
                      pages 11 and 12 of the Company's Proxy Statement dated
                      March 25, 1991, for use in connection with its 1991 Annual
                      Meeting of Shareholders, which information is hereby
                      incorporated by reference.

                      Reference is made to the information set forth under the
                      caption "Approval of the Stock Option Plan" at pages 13,
                      14 and 15 of the Company's Proxy Statement dated March 22,
                      1993, for use in connection with its 1993 Annual Meeting
                      of Shareholders, which information is hereby incorporated
                      by reference.

                      Reference is made to the information set forth under the
                      caption "Supplemental Executive Retirement Plan" and
                      "Severance Arrangements" at pages 10, 11 and 15 of the
                      Company's Proxy Statement dated March 21, 1997, for use in
                      connection with its 1997 Annual Meeting of Shareholders,
                      which information is hereby incorporated by reference.

                      Reference is made to the information set forth under the
                      caption "Approval of the 1998 Stock Incentive Plan" at
                      pages 16 - 21 of the Company's Proxy Statement dated March
                      23, 1998, for use in connection with its 1998 Annual
                      Meeting of Shareholders, which information is hereby
                      incorporated by reference.

            (21)      Subsidiaries of the Company                     Page 46

            (23)      Independent Auditors' Consent                   Page 47

            (27)      Financial Data Schedule                         Page 48


                                       41
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized,
in Montvale, New Jersey, on the 23rd day of March, 1999.


                                             BENJAMIN MOORE & CO.


                                             By /s/ Yvan Dupuy
                                                -------------------
                                                    Yvan Dupuy
                                                President and Chief
                                                 Operating Officer

                               POWER OF ATTORNEY

      KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Yvan Dupuy and Richard Roob, and each of
them, his true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Annual Report on
Form 10-K and to file the same, with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

                            -------------------------

      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 dates indicated.


                                       42
<PAGE>

           Signature                       Title                     Date
           ---------                       -----                     ----

                                  Chairman of the Board
                                  of Directors and Chief
                                  Executive Officer;
                                  (Principal Executive
       /s/ Richard Roob           Officer) and Director         March 23, 1999
------------------------------
          Richard Roob

                                  President and Chief
                                  Operating Officer;
        /s/ Yvan Dupuy            Director                      March 23, 1999
------------------------------
          Yvan Dupuy

    /s/ Donald E. Devine II       Vice President-Finance        March 23, 1999
------------------------------    and Chief Financial Officer
      Donald E. Devine II

 /s/ Benjamin M.Belcher, Jr.      Director                      March 23, 1999
------------------------------
   Benjamin M. Belcher, Jr.

     /s/ W.C. Belcher             Director                      March 23, 1999
------------------------------
         Ward C. Belcher

                                  Director                      March 23, 1999
------------------------------
    Charles H. Bergmann, Jr.

                                  Director                      March 23, 1999
------------------------------
       Frederick J. Costello

                                  Director                      March 23, 1999
------------------------------
         Robert J. Hodgson

           /s/ G. Moore           Director                      March 23, 1999
------------------------------
          Gerald W. Moore

      /s/ John C. Moore, Jr.      Director                      March 23, 1999
------------------------------
        John C. Moore, Jr.

                                  Director                      March 23, 1999
------------------------------
       Robert H. Mundheim

      /s/ Charles C. Vail         Director                      March 23, 1999
------------------------------
        Charles C. Vail

                                  Director                      March 23, 1999
------------------------------
          Ward B. Wack

                                  Director                      March 23, 1999
------------------------------
         Sara B. Wardell

        /s/ M.C. Workman          Director                      March 23, 1999
------------------------------
       Maurice C. Workman


                                       43
<PAGE>

                                   SCHEDULE II

                      BENJAMIN MOORE & CO. AND SUBSIDIARIES
                 CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
        Column  A             Column  B                Column  C               Column  D         Column  E
----------------------------------------------------------------------------------------------------------
                                                      Additions
                                                      ---------
                              Balance At     Charged To          Charged
                               Beginning      Costs And         To Other                      Balance At
       Description              Of Year       Expenses          Accounts      Deductions      End of Year
       -----------              -------       --------          --------      ----------      -----------
<S>                           <C>              <C>               <C>          <C>               <C>
Allowance For
Doubtful Accounts:

Current

          1998................$10,517          $ 5,035           $  --        $ 4,494(1)(2)     $11,058
                              =========================================================================

          1997................$ 9,359          $18,977           $ 379        $18,198(1)        $10,517
                              =========================================================================

          1996................$ 7,662          $ 6,495           $  --        $ 4,798(1)        $ 9,359
                              =========================================================================

Long-Term

          1998................$ 1,107          $ 1,955           $  --        $   628(1)        $ 2,434
                              =========================================================================

          1997................$    --          $ 1,107           $  --        $    --           $ 1,107
                              =========================================================================

Allowance For
Inventory Obsolescence:

          1998................$ 2,000          $   784           $  --        $    15(2)        $ 2,769
                              =========================================================================

          1997................$    --          $ 2,000           $  --        $    --           $ 2,000
                              =========================================================================
</TABLE>

(1) Accounts and Notes Receivable Written Off - Net of Recoveries
(2) Foreign exchange gain or (loss)


                                       44
<PAGE>

INDEPENDENT AUDITORS' REPORT

Benjamin Moore & Co.:

We have audited the financial statements of Benjamin Moore & Co. and
Subsidiaries as of December 31, 1998 and 1997, and for each of the three years
in the period ended December 31, 1998, and have issued our report thereon dated
February 17, 1999, which report includes an explanatory paragraph relating to
the change in 1997 in the method of computing depreciation; such financial
statements and report are included elsewhere in this Form 10-K. Our audits also
included the financial statement schedule of Benjamin Moore & Co. and
Subsidiaries, listed in Item 14. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


/s/ Deloitte & Touche LLP

February 17, 1999
Parsippany, New Jersey