EX-12 4 k14701exv12.htm COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES & PREFERRED STOCK DIVIDENDS exv12
 

Exhibit 12
MASCO CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
                                                 
    (Dollars in Millions)  
    Three        
    Months        
    Ended        
    March 31,     Year Ended December 31,    
    2007       2006     2005      2004     2003     2002  
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges:
                                                
  Income from continuing operations before income taxes, minority interest and cumulative effect of accounting change, net
   $ 236     $ 900     $ 1,402     $ 1,534     $ 1,243     $ 927  
 
                                                
  Deduct equity in undistributed (earnings) of fifty-percent-or- less-owned companies
     —       (1 )     (1 )     (1 )     —       (10 )
 
                                                
Add interest on indebtedness, net
     64       241       246       214       252       226  
 
                                                
Add amortization of debt expense
     1       4       6       6       13       13  
 
                                                
Add estimated interest factor for rentals
     14       53       40       34       31       24  
 
                                    
 
                                                
  Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends 
   $ 315     $ 1,197     $ 1,693     $ 1,787     $ 1,539     $ 1,180  
 
                                    
 
                                                
Fixed Charges:
                                                
  Interest on indebtedness
   $ 65     $ 241     $ 244     $ 214     $ 253     $ 225  
 
                                                
  Amortization of debt expense
     1       4       6       6       13       13  
 
                                                
  Estimated interest factor for rentals
     14       53       40       34       31       24  
 
                                    
 
                                                
Total fixed charges       
   $ 80     $ 298     $ 290     $ 254     $ 297     $ 262  
 
                                    
 
                                                
Preferred stock dividends(a)
   $ —     $ —     $ —     $ 8     $ 16     $ 14  
 
                                    
 
                                                
Combined fixed charges and preferred stock dividends
   $ 80     $ 298     $ 290     $ 262     $ 313     $ 276  
 
                                    
 
                                                
Ratio of earnings to fixed charges
     3.9       4.0       5.8       7.0       5.2       4.5  
 
                                    
Ratio of earnings to combined fixed charges and preferred stock dividends
     3.9       4.0       5.8       6.8       4.9       4.3  
 
                                    
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b)
     3.9       5.5       6.2       7.2       4.9       4.8  
 
                                    
 
(a)   Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company.
 
(b)   Excludes the 2006 non-cash, pre-tax impairment charges for goodwill and financial investments of $331 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, the non-cash, pre-tax impairment charges for goodwill and financial investments of $69 million and $45 million, respectively; the 2004 pre-tax income related to the Behr litigation settlement of $30 million, the non-cash, pre-tax impairment charges for goodwill of $112 million and the pre-tax impairment charge of $21 million related to a marketable security; the 2003 pre-tax income related to the Behr litigation settlement of $72 million and the non-cash, pre-tax goodwill impairment charges of $53 million; and the 2002 pre-tax net charge of $147 million related to the Behr litigation settlement.

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