EX-12 2 k48417exv12.htm EX-12 exv12
Exhibit 12
MASCO CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
                                                 
    (Dollars in Millions)  
    Nine        
    Months        
    Ended        
    Sep. 30,     Year Ended December 31,  
    2009     2008     2007     2006     2005     2004  
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges:
                                                
(Loss) income from continuing operations before income taxes and cumulative effect of accounting change, net
   $ 94     $ (199 )   $ 876     $ 893     $ 1,449     $ 1,632  
 
                                                
Deduct equity in undistributed (earnings) of fifty-percent-or- less-owned companies
     —       (1 )     (2 )     (1 )     (1 )     (1 )
 
                                                
Add interest on indebtedness, net
     168       228       258       241       246       214  
 
                                                
Add amortization of debt expense
     4       4       5       4       6       6  
 
                                                
Add estimated interest factor for rentals
     33       51       55       52       40       33  
 
                                    
 
                                                
Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends
   $ 299     $ 83     $ 1,192     $ 1,189     $ 1,740     $ 1,884  
 
                                    
 
                                                
Fixed Charges:
                                                
Interest on indebtedness
   $ 166     $ 228     $ 259     $ 241     $ 244     $ 214  
 
                                                
Amortization of debt expense
     4       4       5       4       6       6  
 
                                                
Estimated interest factor for rentals
     33       51       55       52       40       33  
 
                                    
 
                                                
Total fixed charges
   $ 203     $ 283     $ 319     $ 297     $ 290     $ 253  
 
                                    
 
                                                
Preferred stock dividends (a)
   $ —     $ —     $ —     $ —     $ —     $ 8  
 
                                    
 
                                                
Combined fixed charges and preferred stock dividends
   $ 203     $ 283     $ 319     $ 297     $ 290     $ 261  
 
                                    
 
                                                
Ratio of earnings to fixed charges
     1.5       0.3       3.7       4.0       6.0       7.4  
 
                                    
Ratio of earnings to combined fixed charges and preferred stock dividends
     1.5       0.3       3.7       4.0       6.0       7.2  
 
                                    
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b)
     1.6       2.2       4.2       5.4       6.1       7.2  
 
                                    
 
(a)   Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company.
 
(b)   Excludes the 2009 non-cash, pre-tax impairment charge for financial investments of $10 million and litigation expense of $7 million; 2008 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $467 million, financial investments of $58 million and litigation expense of $9 million; 2007 non-cash, pre-tax impairment charges for goodwill and other intangible assets of $119 million and the non-cash, pre-tax charge for financial investments of $22 million; 2006 non-cash, pre-tax impairment charges for goodwill and financial investments of $317 million and $101 million, respectively, and the pre-tax income related to the Behr litigation settlement of $1 million; the 2005 pre-tax income related to the Behr litigation settlement of $6 million and the non-cash, pre-tax impairment charge for financial investments of $45 million; and the 2004 pre-tax income related to the Behr litigation settlement of $30 million, and the pre-tax impairment charge of $21 million related to a marketable security.

36