EX-12 2 k33781exv12.htm COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS exv12
Exhibit 12
MASCO CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
                                                 
    (Dollars in Millions)  
    Six        
    Months        
    Ended        
    June 30,     Year Ended December 31,  
    2008     2007     2006     2005     2004     2003  
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
   $ 235     $ 866     $ 891     $ 1,454     $ 1,630     $ 1,338  
 
                                                
Deduct equity in undistributed (earnings) of fifty-percent-or- less-owned companies
     (1 )     (2 )     (1 )     (1 )     (1 )     —  
 
                                                
Add interest on indebtedness, net
     114       258       241       246       214       252  
 
                                                
Add amortization of debt expense
     2       5       4       6       6       13  
 
                                                
Add estimated interest factor for rentals
     26       55       52       40       33       31  
 
                                    
 
                                                
Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends
   $ 376     $ 1,182     $ 1,187     $ 1,745     $ 1,882     $ 1,634  
 
                                    
 
                                                
Fixed Charges:
                                                
Interest on indebtedness
   $ 113     $ 259     $ 241     $ 244     $ 214     $ 252  
 
                                                
Amortization of debt expense
     2       5       4       6       6       13  
 
                                                
Estimated interest factor for rentals
     26       55       52       40       33       31  
 
                                    
 
                                                
Total fixed charges
   $ 141     $ 319     $ 297     $ 290     $ 253     $ 296  
 
                                    
 
                                                
Preferred stock dividends (a)
   $ —     $ —     $ —     $ —     $ 8     $ 16  
 
                                    
 
                                                
Combined fixed charges and preferred stock dividends
   $ 141     $ 319     $ 297     $ 290     $ 261     $ 312  
 
                                    
 
                                                
Ratio of earnings to fixed charges
     2.7       3.7       4.0       6.0       7.4       5.5  
 
                                    
Ratio of earnings to combined fixed charges and preferred stock dividends
     2.7       3.7       4.0       6.0       7.2       5.2  
 
                                    
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b)
     2.9       4.1       5.4       6.2       7.2       5.0  
 
                                    
 
(a)   Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company.
 
(b)   Excludes the 2008 non-cash, pre-tax impairment charge for financial investments of $29 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; 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; and the 2003 pre-tax income related to the Behr litigation settlement of $72 million.

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