Exhibit 12
MASCO CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
(Dollars in Millions) | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
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 | $ | 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 | 241 | 246 | 214 | 252 | 226 | |||||||||||||||
Add amortization of debt expense | 4 | 6 | 6 | 13 | 13 | |||||||||||||||
Add estimated interest factor for rentals | 53 | 40 | 34 | 31 | 24 | |||||||||||||||
Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends | $ | 1,197 | $ | 1,693 | $ | 1,787 | $ | 1,539 | $ | 1,180 | ||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest on indebtedness | $ | 241 | $ | 244 | $ | 214 | $ | 253 | $ | 225 | ||||||||||
Amortization of debt expense | 4 | 6 | 6 | 13 | 13 | |||||||||||||||
Estimated interest factor for rentals | 53 | 40 | 34 | 31 | 24 | |||||||||||||||
Total fixed charges | $ | 298 | $ | 290 | $ | 254 | $ | 297 | $ | 262 | ||||||||||
Preferred stock dividends (a) | $ | – | $ | – | $ | 8 | $ | 16 | $ | 14 | ||||||||||
Combined fixed charges and preferred stock dividends | $ | 298 | $ | 290 | $ | 262 | $ | 313 | $ | 276 | ||||||||||
Ratio of earnings to fixed charges | 4.0 | 5.8 | 7.0 | 5.2 | 4.5 | |||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 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) | 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 related to a marketable security of $21 million; 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; the 2002 pre-tax net charge of $147 million related to the Behr litigation settlement. |