Interest expense in the second quarter was $8 million, an increase of $1 million over the second quarter of 2002. Year to date interest expense was $17 million in 2003, an increase of $3 million over the same period in 2002. The increase was from higher borrowings primarily for acquisitions, partially offset by lower interest rates.

Other, net represented $11 million expense, up $32 million over income of $21 million in the second quarter of 2002. This fluctuation in other, net is primarily the result of the $18 million gain recorded in 2002 for the Company's settlement of its U.S. defined benefit pension plan, $5 million of higher losses in 2003 related to the Company's Mac Advantage financing program, a $3 million gain from the sale of real estate in 2002, and increased intangible amortization expense of $3 million associated with acquisitions, primarily Best Access. Other, net year to date was $18 million expense, up $37 million from income of $19 million year to date 2002. This increase in other, net is due to the same factors discussed previously pertaining to the second quarter. In this regard, the Mac Advantage losses were $9 million higher in 2003 and the increased intangible expense was $7 million versus the comparable 2002 period.

The Company's effective income tax rate was 30.7% in the second quarter this year compared to 38.7% in the prior year's quarter. For the year to date periods, the income tax rate for 2003 was 30.4% and the rate for 2002 was 35.9%. The 2002 effective tax rate includes the impact of the tax expense related to the settlement of the defined benefit plan that increased the effective tax rate. Excluding this transaction, the Company's effective tax rate for the second quarter and year to date periods is 32.0%. The remaining decline in the 2003 tax rate relates to refunds of prior year tax assessments.

Business Segment Results

The Tools segment includes carpenters, mechanics, pneumatic and hydraulic tools, as well as tool sets. The Doors segment includes commercial and residential doors, both automatic and manual, and associated services, as well as closet doors and systems, home decor, door locking systems, commercial and consumer hardware.

Tools segment sales of $481 million in the second quarter of 2003 represented a 3.1% decrease from $497 million in the second quarter of 2002, driven by lower Mac Direct sales due to the exit strategy and inventory reductions at several large consumer channel customers. On a year to date basis, Tools segment net sales in 2003 were $948 million, a 2.7% decrease from $975 million in 2002. Operating profit was $24 million, or 5.0% of net sales, for the second quarter of 2003, compared to $66 million, or 13.2% of net sales, in 2002. The decline in operating profit is primarily attributable to lower sales volume and higher receivable and inventory losses as a result of the Mac Direct exit, costs related to the retirement of the Company's CEO, the absence of retirement plan income, and continual price erosion. Year to date operating profit in 2003 was $51 million, or 5.4% of net sales, compared to $127 million, or 13.1% of net sales in 2002. The decline in operating profit is primarily attributable to the same factors discussed previously pertaining to the second quarter results.

Doors segment sales were $219 million in the second quarter of 2003, an increase of 43.3% from $153 million in the second quarter of 2002. Acquired companies contributed $72 million in sales. Operating profit of $33 million increased by $11 million as a result of these acquired companies, representing 15.1% of net sales in the second quarter of 2003, as compared with 14.7% of net sales in the same period last year. On a year to date basis, Doors segment sales were $418 million, an increase of 43.4% from $291 million in 2002. Acquired companies contributed $140 million in sales. Operating profit of $52 million increased by $11 million as a result of these acquired companies, and represents 12.5% of year to date net sales in 2003, as compared with 14.1% of net sales in the same period last year.

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Restructuring and Other Charges

The Company recorded $22 million in restructuring and asset impairment charges in the second quarter of 2003. Of this charge, $1 million related to the Doors segment, $18 million related to the Tools segment and the remaining $3 million related to centralized corporate functions. These charges consisted of $5 million of asset impairments and $5 million of other exit costs related to the exit of the Company's Mac Direct retail channel, $9 million for severance and related benefits for Operation 15 initiative headcount reductions and $3 million for asset impairments pertaining to other Operation 15 initiatives. The $8 million of asset impairments generally relates to assets designated as held for use which are idle as a result of Operation 15 initiatives and accordingly their book value has been written off. The second quarter charge for headcount reductions will result in a net employment reduction of approximately 700 manufacturing, selling and administrative people. The Company anticipates expending the balance by early 2004.

An analysis of the Company's restructuring reserves for the period March 29, 2003 to June 28, 2003 is as follows (in millions):

				3/29/03				Additions				Usage				6/28/03
Q2 2003
Severance				$	—			$	9.0			$	(4.6	)		$	4.4
Asset impairments					—				7.9				(7.9	)			—
Other					—				5.0				(1.9	)			3.1
				$	—			$	21.9			$	(14.4	)		$	7.5

In addition, the exit of Mac Direct will require liquidation of certain assets such as inventories, accounts receivable, trucks and other items. The aggregate net book value of these assets and certain lease obligations is approximately $85 million. Management continues to formulate plans to maximize the economic value associated with these items. In the first two quarters of 2003, the Company recognized $24 million in receivable losses and $7 million in inventory losses associated with the Mac Direct exit. The Company believes that additional impairments and exit costs are possible, however the amounts cannot be determined at this time, as they depend on future events and actions which have not been finalized.

FINANCIAL CONDITION

Liquidity and Sources of Capital

Operating cash flow of $64 million in the second quarter of 2003 decreased $20 million from the prior year's second quarter principally as a result of increased inventory and accounts receivable levels. On a year to date basis, operating cash flow of $116 million in 2003 increased by $11 million from 2002 due to timing of income tax disbursements and positive cash flows from acquisitions, partially offset by the decreases in working capital mentioned previously.

The Company had $213 million notional value Stanley common stock forward contracts (equity hedge) which were implemented in previous years in an effort to offset the diluted share count from changes in the stock price. When the stock price rose, the Company would benefit from the hedge by offsetting the impact of the diluted share count from in-the-money stock options. These hedges, however, had an opposite result with a declining stock price. As a result of the new accounting rules under SFAS No. 150, the Company announced plans to restructure the $213 million equity hedge contracts in April 2003. On April 14, 2003, $100 million of stock was purchased from the equity hedge counterparties which decreased shares then outstanding by 3.9 million. These transactions were completed using a combination of borrowings under existing lines of credit and available cash. No open market purchase of shares occurred. The remaining $113 million in forward contracts were modified to full physical settlement contracts with a fixed notional principal of $113 million and 4.1 million of underlying shares. These contracts will be settled over the next 16 quarters in equal installments and do not contain the same dilution protection (or risk) as the former contracts. SFAS No. 150, issued in May 2003, requires that the notional principal balance be recognized as a liability on the balance sheet and the underlying shares of 4.1 million be excluded from the amount of shares used to calculate basic and diluted earnings per share.

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ITEM 4.	CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, under the supervision and with the participation of management, including the Company's Chief Executive Officer and Chairman and its Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Based upon that evaluation, the Company's Chief Executive Officer and Chairman and its Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in its periodic Securities Exchange Commission filings. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

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PART 2 – OTHER INFORMATION

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

The Company's Annual Meeting was held on April 22, 2003.

(i)

The following directors were elected at the meeting:

				Shares Voted For				Shares Withheld				Non-Votes
Robert G. Britz				64,689,810				9,488,328				0
Eileen S. Kraus				56,105,388				18,072,750				0
John M. Trani				65,842,340				8,335,798				0

(ii)

Ernst & Young LLP was approved as the Company's independent auditors by the following vote:

FOR:				55,900,785				AGAINST:				17,819,302
ABSTAIN:				458,052				NOT VOTED:				0

(iii)

A shareholder proposal urging the Board of Directors to take the necessary steps to require that all members of the Board of Directors be elected annually was approved by the following vote:

FOR:				37,022,224				AGAINST:				23,844,984
ABSTAIN:				632,138				NOT VOTED:				12,678,792

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits

Exhibit No.:				Description:
99 (i)				Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99 (ii)				Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)	Reports on Form 8-K

(1)

The Company filed a Current Report on Form 8-K dated April 9, 2003 with respect to the Company's press release announcing plans to improve operating margin, reduce outstanding shares and providing earnings guidance for the first quarter and the full year 2003.

(2)

The Company filed a Current Report on Form 8-K dated April 29, 2003 with respect to the Company's press release reporting results for the first quarter of 2003.

(3)

The Company filed a Current Report on Form 8-K dated May 8, 2003 with respect to the Company's press release providing earnings guidance for the second quarter and full year 2003 with additional guidance regarding cash flow in 2003.

(4)

The Company filed a Current Report on Form 8-K dated May 20, 2003 with respect to the Company's press release announcing the retirement of John M. Trani, Chairman and Chief Executive Officer, effective December 31, 2003.

CAUTIONARY STATEMENT

This report on Form 10-Q contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws including, but not limited to the amount and timing of charges that will be incurred in connection with the

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Company's recently announced restructuring plans. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These forward-looking statements are intended to provide management's current expectations or plans for the future operating and financial performance of the Corporation, based on assumptions currently believed to be valid. Forward-looking statements may be identified by the use of words such as "believe," "expect," "plans," "anticipate" and other words of similar meaning in connection with a discussion of future operating or financial performance.

These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances, including but not limited to (a) the success of the company's efforts to decentralize its operations functions, primarily into its Tools and Access Solutions business groups; (b) the success of the company's efforts to reduce its workforce and close certain facilities, including the resolution of any labor issues and the predictability of severance payments related to such activities, the need to respond to significant changes in product demand while any facility consolidation is in process and other unforeseen events; and (c) the success of the company's efforts to restructure its Mac Tools organization in order to return it to profitability, including, without limitation, the company's ability to liquidate certain Mac Tools assets at a satisfactory price. Actual results may also differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE STANLEY WORKS

Date: August 12, 2003

By: /s/ James M. Loree James M. Loree Executive Vice President, Finance and Chief Financial Officer

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CERTIFICATIONS

I, John M. Trani, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Stanley Works and subsidiaries;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: August 12, 2003				/s/   John M. Trani
				John M. Trani Chairman and Chief Executive Officer

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CERTIFICATIONS

I, James M. Loree, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Stanley Works and subsidiaries;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: August 12, 2003				/s/   James M. Loree
				James M. Loree Executive Vice President, Finance and Chief Financial Officer

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