EXHIBIT 12
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
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NINE
MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEP. 30, ----------------------------------------------
2004 2003 2002 2001 2000 1999
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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 $1,312 $1,280 $ 966 $ 278 $ 824 $ 805
Deduct equity in undistributed
(earnings) of fifty-percent-or-
less-owned companies (1) -- (10) (1) (10) (19)
Add interest on indebtedness, net 160 253 228 230 190 119
Add amortization of debt expense 3 12 13 10 2 1
Add estimated interest factor for
rentals 26 32 24 21 17 14
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Earnings before income taxes, minority
interest, cumulative effect of
accounting change, net, fixed charges
and preferred
stock dividends $1,500 $1,577 $1,221 $ 538 $1,023 $ 920
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FIXED CHARGES:
Interest on indebtedness $ 159 $ 253 $ 226 $ 236 $ 198 $ 122
Amortization of debt expense 3 12 13 10 2 1
Estimated interest factor for
rentals 26 32 24 21 17 14
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Total fixed charges $ 188 $ 297 $ 263 $ 267 $ 217 $ 137
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PREFERRED STOCK DIVIDENDS(a) $ 8 $ 16 $ 14 $ 7 -- --
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Combined fixed charges and
preferred stock dividends $ 196 $ 313 $ 277 $ 274 $ 217 $ 137
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Ratio of earnings to fixed charges (c) 8.0 5.3 4.6 2.0 4.7 6.7
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Ratio of earnings to combined fixed
charges and preferred stock
dividends(b)(c) 7.7 5.0 4.4 2.0 4.7 6.7
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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 2004 pre-tax income of $30 million related to the Behr
litigation accrual, the 2003 pre-tax income for litigation settlement of
$72 million and the non-cash, pre-tax goodwill impairment charge of $53
million, the 2002 pre-tax charge for litigation settlement, net, of $147
million, the 2001 non-cash, pre-tax charge of $530 million and the 2000
non-cash, pre-tax charge of $145 million, the Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends would be 7.5, 5.0,
4.9, 3.9 and 5.4 for the first nine months of 2004, and the years 2003,
2002, 2001 and 2000, respectively.
(c) Years prior to 2002 have not been adjusted to exclude goodwill
amortization expense.