EXHIBIT 12
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS)
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NINE
MONTHS
ENDED YEAR ENDED DECEMBER 31
SEPT. 30, ----------------------------------------------------
2002 2001 2000 1999 1998 1997
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EARNINGS BEFORE INCOME TAXES
AND FIXED CHARGES:
Income from continuing
operations before income
taxes and cumulative effect
of accounting change, net $ 731,500 $ 300,700 $ 893,400 $ 904,100 $ 905,500 $ 733,800
Deduct/add equity in
undistributed (earnings)/
loss of fifty-percent-or-
less-owned companies (10,770) (1,590) (9,640) (18,720) (24,070) (19,470)
Add interest on indebtedness,
net 162,390 233,440 193,000 121,520 115,700 94,780
Add amortization of debt
expense 11,750 10,300 2,430 1,350 2,130 2,310
Add estimated interest factor
for rentals 18,730 23,050 18,760 16,080 11,430 9,270
---------- ---------- ---------- ---------- ---------- ----------
Earnings before income taxes
and fixed charges and
cumulative effect of
accounting change, net $ 913,600 $ 565,900 $1,097,950 $1,024,330 $1,010,690 $ 820,690
========== ========== ========== ========== ========== ==========
FIXED CHARGES:
Interest on indebtedness $ 163,040 $ 239,290 $ 202,630 $ 129,860 $ 119,750 $ 97,910
Amortization of debt expense 11,750 10,300 2,430 1,350 2,130 2,310
Estimated interest factor
for rentals 18,730 23,050 18,760 16,080 11,430 9,270
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Total fixed charges $ 193,520 $ 272,640 $ 223,820 $ 147,290 $ 133,310 $ 109,490
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PREFERRED STOCK DIVIDENDS(A) 10,260 6,820 -- -- -- --
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Combined fixed charges and
preferred stock dividends $ 203,780 $ 279,460 $ 223,820 $ 147,290 $ 133,310 $ 109,490
========== ========== ========== ========== ========== ==========
Ratio of earnings to fixed
charges 4.7 2.1 4.9 7.0 7.6 7.5
========== ========== ========== ========== ========== ==========
Ratio of earnings to combined
fixed charges and preferred
stock dividends(b)(c) 4.5 2.0 4.9 7.0 7.6 7.5
========== ========== ========== ========== ========== ==========
(a) Represents amount of income before provision for income taxes required to
meet the preferred stock dividend requirements of the Company which are
substantially the same as the dividend requirements of the Company's common
stock.
(b) Excluding the third quarter 2002 pre-tax charge for litigation settlement
of $166 million, third quarter 2001 pre-tax non-cash charge of $530 million
and the fourth quarter 2000 pre-tax non-cash charge of $145 million, the
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
would have been 5.3, 3.9 and 5.6 for 2002, 2001 and 2000, respectively.
(c) Prior years have not been adjusted to exclude goodwill amortization
expense.