Exhibit 12
MASCO CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
(Dollars in Millions) | ||||||||||||||||||||||||
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 and cumulative effect of accounting change, net | $ | (472 | ) | $ | (741 | ) | $ | (136 | ) | $ | (134 | ) | $ | 867 | $ | 891 | ||||||||
Deduct equity in undistributed (earnings) of fifty-percent-or- less-owned companies | — | — | — | (1 | ) | (2 | ) | (1 | ) | |||||||||||||||
Add interest on indebtedness, net | 250 | 249 | 224 | 228 | 258 | 241 | ||||||||||||||||||
Add amortization of debt expense | 7 | 7 | 5 | 4 | 5 | 4 | ||||||||||||||||||
Add estimated interest factor for rentals | 33 | 36 | 44 | 51 | 55 | 52 | ||||||||||||||||||
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Earnings before income taxes, minority interest, cumulative effect of accounting change, net, fixed charges and preferred stock dividends | $ | (182 | ) | $ | (449 | ) | $ | 137 | $ | 148 | $ | 1,183 | $ | 1,187 | ||||||||||
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Fixed Charges: | ||||||||||||||||||||||||
Interest on indebtedness | $ | 249 | $ | 246 | $ | 221 | $ | 228 | $ | 259 | $ | 241 | ||||||||||||
Amortization of debt expense | 7 | 7 | 5 | 4 | 5 | 4 | ||||||||||||||||||
Estimated interest factor for rentals | 33 | 36 | 44 | 51 | 55 | 52 | ||||||||||||||||||
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Total fixed charges | $ | 289 | $ | 289 | $ | 270 | $ | 283 | $ | 319 | $ | 297 | ||||||||||||
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Preferred stock dividends(a) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
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Combined fixed charges and preferred stock dividends | $ | 289 | $ | 289 | $ | 270 | $ | 283 | $ | 319 | $ | 297 | ||||||||||||
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Ratio of earnings to fixed charges | (0.6 | ) | (1.6 | ) | 0.5 | 0.5 | 3.7 | 4.0 | ||||||||||||||||
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Ratio of earnings to combined fixed charges and preferred stock dividends | (0.6 | ) | (1.6 | ) | 0.5 | 0.5 | 3.7 | 4.0 | ||||||||||||||||
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Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items(b) | 1.1 | 0.9 | 1.5 | 2.4 | 4.2 | 5.4 | ||||||||||||||||||
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(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 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $494 million and litigation expense of $9 million; the 2010 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $698 million and non-cash, pre-tax impairment charge for financial investments of $34 million; the 2009 non-cash, pre-tax impairment charge for goodwill 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; 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. |