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, ------------------------------------------------------------------
2003 2002 2001 2000 1999 1998
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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 $ 1,019,070 $ 1,001,480 $ 305,470 $ 872,560 $ 859,920 $ 858,370
Deduct equity in undistributed (earnings) of
fifty-percent-or-less-owned companies (210) (9,560) (1,590) (9,640) (18,720) (24,070)
Add interest on indebtedness, net 200,510 228,800 232,910 192,510 121,150 115,300
Add amortization of debt expense 4,440 13,040 10,300 2,430 1,350 2,130
Add estimated interest factor for rentals 24,620 25,890 23,050 17,970 15,330 9,450
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Earnings before income taxes, minority interest,
cumulative effect of accounting change, net,
fixed charges and preferred stock dividends $ 1,248,430 $ 1,259,650 $ 570,140 $ 1,075,830 $ 979,030 $ 961,180
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FIXED CHARGES:
Interest on indebtedness $ 201,880 $ 227,550 $ 237,930 $ 201,410 $ 124,720 $ 119,080
Amortization of debt expense 4,440 13,040 10,300 2,430 1,350 2,130
Estimated interest factor for rentals 24,620 25,890 23,050 17,970 15,330 9,450
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Total fixed charges $ 230,948 $ 266,480 $ 271,280 $ 221,810 $ 141,400 $ 130,660
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PREFERRED STOCK DIVIDENDS(a) 11,430 13,830 6,660 --- --- ---
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Combined fixed charges and preferred stock
dividends $ 242,370 $ 280,310 $ 277,940 $ 221,810 $ 141,400 $ 130,660
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Ratio of earnings to fixed charges 5.4 4.7 2.1 4.9 6.9 7.4
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Ratio of earnings to combined fixed charges and
preferred stock dividends(b)(c) 5.2 4.5 2.1 4.9 6.9 7.4
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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) Excluding the 2003 pre-tax income regarding litigation settlement of
$71.1 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 4.9,
5.0, 4.0 and 5.5 for the third 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.