EXHIBIT 12
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN MILLIONS)
---------------------------------------------------
NINE
MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEP. 30, ----------------------------------------
2005 2004 2003 2002 2001 2000
-------- ------ ------ ------ ---- ------
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 $1,162 $1,518 $1,280 $ 966 $278 $ 824
Deduct equity in undistributed
(earnings) of fifty-percent-or-
less-owned companies (1) (1) -- (10) (1) (10)
Add interest on indebtedness, net 180 216 253 228 230 190
Add amortization of debt expense 5 6 12 13 10 2
Add estimated interest factor for
rentals 30 35 32 24 21 17
------ ------ ------ ------ ---- ------
Earnings before income taxes,
minority interest, cumulative
effect of accounting change,
net, fixed charges and preferred
stock dividends $1,376 $1,774 $1,577 $1,221 $538 $1,023
====== ====== ====== ====== ==== ======
FIXED CHARGES:
Interest on indebtedness $ 178 $ 214 $ 253 $ 226 $236 $ 198
Amortization of debt expense 5 6 12 13 10 2
Estimated interest factor for
rentals 30 35 32 24 21 17
------ ------ ------ ------ ---- ------
Total fixed charges $ 213 $ 255 $ 297 $ 263 $267 $ 217
====== ====== ====== ====== ==== ======
PREFERRED STOCK DIVIDENDS(A) $ -- $ 8 $ 16 $ 14 $ 7 $ --
------ ------ ------ ------ ---- ------
Combined fixed charges and
preferred stock dividends $ 213 $ 263 $ 313 $ 277 $274 $ 217
====== ====== ====== ====== ==== ======
Ratio of earnings to fixed charges 6.5 7.0 5.3 4.6 2.0 4.7
====== ====== ====== ====== ==== ======
Ratio of earnings to combined fixed
charges and preferred stock
dividends(B)(C) 6.5 6.7 5.0 4.4 2.0 4.7
====== ====== ====== ====== ==== ======
(a) Represents amount of income before provision for income taxes required to
meet the preferred stock dividend requirements of the Company.
(b) Excluding the 2005 pre-tax impairment charges of $45 million relating to
financial investments, the pre-tax income of $6 million related to the Behr
litigation accrual, the 2004 pre-tax income of $30 million related to the
Behr litigation accrual, the non-cash, pre-tax goodwill impairment charge
of $168 million, and the non-cash, pre-tax impairment charge of $21 million
related to a marketable security, 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 6.6, 7.3,
5.0, 4.9, 3.9 and 5.4 for the third quarter of 2005, and the years 2004,
2003, 2002, 2001 and 2000, respectively.
(c) Years prior to 2002 have not been adjusted to exclude goodwill amortization
expense.
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