EX-12 12 d276684dex12.htm RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

Exhibit 12

MASCO CORPORATION

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

 

    (Dollars in Millions)  
    Year Ended December 31,  
    2011     2010     2009     2008     2007     2006  

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

  $ (472   $ (741   $ (136   $ (134   $ 867      $ 891   

Deduct equity in undistributed (earnings) of fifty-percent-or- less-owned companies

                         (1     (2     (1

Add interest on indebtedness, net

    250        249        224        228        258        241   

Add amortization of debt expense

    7        7        5        4        5        4   

Add estimated interest factor for rentals

    33        36        44        51        55        52   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends

  $ (182   $ (449   $ 137      $ 148      $ 1,183      $ 1,187   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fixed Charges:

           

Interest on indebtedness

  $ 249      $ 246      $ 221      $ 228      $ 259      $ 241   

Amortization of debt expense

    7        7        5        4        5        4   

Estimated interest factor for rentals

    33        36        44        51        55        52   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fixed charges

  $ 289      $ 289      $ 270      $ 283      $ 319      $ 297   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Preferred stock dividends(a)

  $      $      $      $      $      $   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Combined fixed charges and preferred stock dividends

  $ 289      $ 289      $ 270      $ 283      $ 319      $ 297   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of earnings to fixed charges

    (0.6     (1.6     0.5        0.5        3.7        4.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends

    (0.6     (1.6     0.5        0.5        3.7        4.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items(b)

    1.1        0.9        1.5        2.4        4.2        5.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

(a) Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company.

 

(b) Excludes the 2011 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $494 million and litigation expense of $9 million; the 2010 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $698 million and non-cash, pre-tax impairment charge for financial investments of $34 million; the 2009 non-cash, pre-tax impairment charge for goodwill of $262 million; 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.