EXHIBIT 12 MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (DOLLARS IN THOUSANDS) ----------------------------------------------------------------------- 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 ======== ========== ======== ========== ========== ========== 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 === === === === === === 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 === === === === === === (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.