EX-12 3 k72403exv12.txt COMPUTATION OF RATIO OF EARNINGS EXHIBIT 12 MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS) -------------------------------------------------------------------------------- NINE MONTHS ENDED YEAR ENDED DECEMBER 31 SEPT. 30, ---------------------------------------------------- 2002 2001 2000 1999 1998 1997 ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES: Income from continuing operations before income taxes and cumulative effect of accounting change, net $ 731,500 $ 300,700 $ 893,400 $ 904,100 $ 905,500 $ 733,800 Deduct/add equity in undistributed (earnings)/ loss of fifty-percent-or- less-owned companies (10,770) (1,590) (9,640) (18,720) (24,070) (19,470) Add interest on indebtedness, net 162,390 233,440 193,000 121,520 115,700 94,780 Add amortization of debt expense 11,750 10,300 2,430 1,350 2,130 2,310 Add estimated interest factor for rentals 18,730 23,050 18,760 16,080 11,430 9,270 ---------- ---------- ---------- ---------- ---------- ---------- Earnings before income taxes and fixed charges and cumulative effect of accounting change, net $ 913,600 $ 565,900 $1,097,950 $1,024,330 $1,010,690 $ 820,690 ========== ========== ========== ========== ========== ========== FIXED CHARGES: Interest on indebtedness $ 163,040 $ 239,290 $ 202,630 $ 129,860 $ 119,750 $ 97,910 Amortization of debt expense 11,750 10,300 2,430 1,350 2,130 2,310 Estimated interest factor for rentals 18,730 23,050 18,760 16,080 11,430 9,270 ---------- ---------- ---------- ---------- ---------- ---------- Total fixed charges $ 193,520 $ 272,640 $ 223,820 $ 147,290 $ 133,310 $ 109,490 ========== ========== ========== ========== ========== ========== PREFERRED STOCK DIVIDENDS(A) 10,260 6,820 -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- Combined fixed charges and preferred stock dividends $ 203,780 $ 279,460 $ 223,820 $ 147,290 $ 133,310 $ 109,490 ========== ========== ========== ========== ========== ========== Ratio of earnings to fixed charges 4.7 2.1 4.9 7.0 7.6 7.5 ========== ========== ========== ========== ========== ========== Ratio of earnings to combined fixed charges and preferred stock dividends(b)(c) 4.5 2.0 4.9 7.0 7.6 7.5 ========== ========== ========== ========== ========== ==========
(a) Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company which are substantially the same as the dividend requirements of the Company's common stock. (b) Excluding the third quarter 2002 pre-tax charge for litigation settlement of $166 million, third quarter 2001 pre-tax non-cash charge of $530 million and the fourth quarter 2000 pre-tax non-cash charge of $145 million, the Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends would have been 5.3, 3.9 and 5.6 for 2002, 2001 and 2000, respectively. (c) Prior years have not been adjusted to exclude goodwill amortization expense.