Exhibit 12
MASCO CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
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, | |||||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges: | ||||||||||||||||||||||||
(Loss) income from continuing operations before income taxes | $ | 37 | $ | (777 | ) | $ | (151 | ) | $ | (193 | ) | $ | 876 | $ | 891 | |||||||||
Deduct equity in undistributed loss (earnings) of fifty-percent-or- less-owned companies | — | — | — | (1 | ) | (2 | ) | (1 | ) | |||||||||||||||
Add interest on indebtedness, net | 127 | 249 | 224 | 228 | 258 | 241 | ||||||||||||||||||
Add amortization of debt expense | 3 | 7 | 5 | 4 | 5 | 4 | ||||||||||||||||||
Add estimated interest factor for rentals | 17 | 36 | 44 | 51 | 55 | 52 | ||||||||||||||||||
Earnings before income taxes, noncontrolling interest, net, fixed charges and preferred stock dividends | $ | 184 | $ | (485 | ) | $ | 122 | $ | 89 | $ | 1,192 | $ | 1,187 | |||||||||||
Fixed Charges: | ||||||||||||||||||||||||
Interest on indebtedness | $ | 125 | $ | 246 | $ | 221 | $ | 228 | $ | 259 | $ | 241 | ||||||||||||
Amortization of debt expense | 3 | 7 | 5 | 4 | 5 | 4 | ||||||||||||||||||
Estimated interest factor for rentals | 17 | 36 | 44 | 51 | 55 | 52 | ||||||||||||||||||
Total fixed charges | $ | 145 | $ | 289 | $ | 270 | $ | 283 | $ | 319 | $ | 297 | ||||||||||||
Preferred stock dividends(a) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Combined fixed charges and preferred stock dividends | $ | 145 | $ | 289 | $ | 270 | $ | 283 | $ | 319 | $ | 297 | ||||||||||||
Ratio of earnings to fixed charges | 1.3 | (1.7 | ) | 0.5 | 0.3 | 3.7 | 4.0 | |||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 1.3 | (1.7 | ) | 0.5 | 0.3 | 3.7 | 4.0 | |||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items(b) | 1.3 | 0.9 | 1.5 | 2.2 | 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 litigation expense of $5 million; 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 charge for goodwill impairment 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; and the 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. |