EX-12 22 k49882exv12.htm EX-12 exv12
 
Exhibit 12
 
MASCO CORPORATION
 
Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
 
                                                 
    (Dollars in Millions)  
    Year Ended December 31,  
    2010     2009     2008     2007     2006     2005  
 
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
  $ (777 )   $ (151 )   $ (193 )   $ 876     $ 891     $ 1,447  
Deduct equity in undistributed (earnings) of fifty-percent-or-less-owned companies
    —       —       (1 )     (2 )     (1 )     (1 )
Add interest on indebtedness, net
    249       224       228       258       241       246  
Add amortization of debt expense
    7       5       4       5       4       6  
Add estimated interest factor for rentals
    36       44       51       55       52       40  
                                                 
Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends
  $ (485 )   $ 122     $ 89     $ 1,192     $ 1,187     $ 1,738  
                                                 
Fixed Charges:
                                               
Interest on indebtedness
  $ 246     $ 221     $ 228     $ 259     $ 241     $ 244  
Amortization of debt expense
    7       5       4       5       4       6  
Estimated interest factor for rentals
    36       44       51       55       52       40  
                                                 
Total fixed charges
  $ 289     $ 270     $ 283     $ 319     $ 297     $ 290  
                                                 
Preferred stock dividends (a)
  $ —     $ —     $ —     $ —     $ —     $ —  
                                                 
Combined fixed charges and preferred stock dividends
  $ 289     $ 270     $ 283     $ 319     $ 297     $ 290  
                                                 
Ratio of earnings to fixed charges
    (1.7 )     0.5       0.3       3.7       4.0       6.0  
                                                 
Ratio of earnings to combined fixed charges and preferred stock dividends
    (1.7 )     0.5       0.3       3.7       4.0       6.0  
                                                 
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b)
    0.9       1.5       2.2       4.2       5.4       6.1  
                                                 
 
 
(a) Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company.
 
(b) Excludes the 2010 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $721 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; and 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.