EX-12 2 d564131dex12.htm EXHIBIT 12

Exhibit 12

MASCO CORPORATION

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

|  | (Dollars in Millions) |
|  | Six Months Ended June 30, |  |  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |  |  | 2010 |  |  | 2009 |  |  | 2008 |
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations before income taxes |  | $ | 210 |  |  | $ | 73 |  |  | $ | (392 | ) |  | $ | (745 | ) |  | $ | (151 | ) |  | $ | (145 | )
Deduct equity in undistributed earnings of fifty-percent-or-less-owned companies |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | )
Add interest on indebtedness, net |  |  | 118 |  |  |  | 249 |  |  |  | 250 |  |  |  | 249 |  |  |  | 224 |  |  |  | 228 |
Add amortization of debt expense |  |  | 3 |  |  |  | 7 |  |  |  | 7 |  |  |  | 7 |  |  |  | 5 |  |  |  | 4 |
Add estimated interest factor for rentals |  |  | 15 |  |  |  | 31 |  |  |  | 33 |  |  |  | 36 |  |  |  | 44 |  |  |  | 51 |
Earnings (loss) before income taxes, noncontrolling interest, net, fixed charges and preferred stock dividends |  | $ | 346 |  |  | $ | 360 |  |  | $ | (102 | ) |  | $ | (453 | ) |  | $ | 122 |  |  | $ | 137 |
Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on indebtedness |  | $ | 117 |  |  | $ | 248 |  |  | $ | 249 |  |  | $ | 246 |  |  | $ | 221 |  |  | $ | 228 |
Amortization of debt expense |  |  | 3 |  |  |  | 7 |  |  |  | 7 |  |  |  | 7 |  |  |  | 5 |  |  |  | 4 |
Estimated interest factor for rentals |  |  | 15 |  |  |  | 31 |  |  |  | 33 |  |  |  | 36 |  |  |  | 44 |  |  |  | 51 |
Total fixed charges |  | $ | 135 |  |  | $ | 286 |  |  | $ | 289 |  |  | $ | 289 |  |  | $ | 270 |  |  | $ | 283 |
Preferred stock dividends (a) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Combined fixed charges and preferred stock dividends |  | $ | 135 |  |  | $ | 286 |  |  | $ | 289 |  |  | $ | 289 |  |  | $ | 270 |  |  | $ | 283 |
Ratio of earnings to fixed charges |  |  | 2.6 |  |  |  | 1.3 |  |  |  | (0.4 | ) |  |  | (1.6 | ) |  |  | 0.5 |  |  |  | 0.5 |
Ratio of earnings to combined fixed charges and preferred stock dividends |  |  | 2.6 |  |  |  | 1.3 |  |  |  | (0.4 | ) |  |  | (1.6 | ) |  |  | 0.5 |  |  |  | 0.5 |
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b) |  |  | 2.6 |  |  |  | 1.7 |  |  |  | 1.2 |  |  |  | 1.0 |  |  |  | 1.5 |  |  |  | 2.2 |

(a) | Represents amount of income before provision for income taxes required to meet the preferred stock dividend requirements of the Company.

(b) | Excludes the 2012 non-cash, pre-tax impairment charge for other intangible assets of $42 million and litigation expense of $77 million; the 2011 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $450 million and litigation expense of $9 million; the 2010 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $698 million and non-cash, pre-tax impairment charges for financial investments of $34 million; the 2009 non-cash, pre-tax charge for goodwill impairment of $262 million; non-cash, pre-tax impairment charge for financial investments of $10 million and litigation expense of $7 million; and 2008 non-cash, pre-tax impairment charge for goodwill and other intangible assets of $415 million, financial investments of $58 million and litigation expense of $9 million.

35