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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THREE
MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ------------------------------------------------------------
2003 2002 2001 2000 1999 1998
-------- ---------- -------- ---------- ---------- ----------
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 $259,850 $1,031,000 $300,700 $ 893,400 $ 904,100 $ 905,500
Deduct equity in
undistributed
(earnings) of
fifty-percent-or-
less-owned companies (490) (9,560) (1,590) (9,640) (18,720) (24,070)
Add interest on
indebtedness, net 67,320 229,250 233,440 193,000 121,520 115,700
Add amortization of debt
expense 1,470 13,040 10,300 2,430 1,350 2,130
Add estimated interest
factor for rentals 8,170 25,890 23,050 18,760 16,080 11,430
-------- ---------- -------- ---------- ---------- ----------
Earnings before income
taxes, minority interest,
cumulative effect of
accounting change, net,
fixed charges and preferred
stock dividends $336,320 $1,289,620 $565,900 $1,097,950 $1,024,330 $1,010,690
======== ========== ======== ========== ========== ==========
FIXED CHARGES:
Interest on indebtedness $ 67,620 $ 228,050 $239,290 $ 202,630 $ 129,860 $ 119,750
Amortization of debt
expense 1,470 13,040 10,300 2,430 1,350 2,130
Estimated interest factor
for rentals 8,170 25,890 23,050 18,760 16,080 11,430
-------- ---------- -------- ---------- ---------- ----------
Total fixed charges $ 77,260 $ 266,980 $272,640 $ 223,820 $ 147,290 $ 133,310
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PREFERRED STOCK DIVIDENDS(a) 3,580 13,860 6,820 --- --- ---
-------- ---------- -------- ---------- ---------- ----------
Combined fixed charges and
preferred stock
dividends $ 80,840 $ 280,840 $279,460 $ 223,820 $ 147,290 $ 133,310
======== ========== ======== ========== ========== ==========
Ratio of earnings to fixed
charges 4.4 4.8 2.1 4.9 7.0 7.6
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Ratio of earnings to combined
fixed charges and preferred
stock dividends(b)(c) 4.2 4.6 2.0 4.9 7.0 7.6
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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) Excluding the 2003 pre-tax income regarding litigation settlement of
$13.5 million, 2002 pre-tax charge for litigation settlement, net of
$146.8 million, the 2001 pre-tax non-cash charge of $530 million and the
2000 pre-tax non-cash charge of $145 million, the Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends would have been 4.0,
5.1, 3.9 and 5.6 for the first quarter of 2003, and the years 2002, 2001
and 2000, respectively.
(c) Years prior to 2002 have not been adjusted to exclude goodwill
amortization expense.