EX-12 3 a14-19693_1ex12.htm EX-12

Exhibit 12

MASCO CORPORATION

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

|  | (Dollars in Millions) |
|  | Nine |  |  |  |  |  |  |  |  |  |  |
|  | Months |  |  |  |  |  |  |  |  |  |  |
|  | Ended |  |  |  |  |  |  |  |  |  |  |
|  | Sep. 30, |  | Year Ended December 31, |
|  | 2014 |  | 2013 |  | 2012 |  | 2011 |  | 2010 |  | 2009 |
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations before income taxes |  | $ | 435 |  | $ | 450 |  | $ | 73 |  | $ | (383 | ) | $ | (745 | ) | $ | (151 | )
Deduct equity in undistributed losses (earnings) of fifty-percent- or-less-owned companies |  | 2 |  | (16 | ) | — |  | (9 | ) | — |  | — |
Add interest on indebtedness, net |  | 166 |  | 230 |  | 249 |  | 250 |  | 249 |  | 224 |
Add amortization of debt expense |  | 4 |  | 6 |  | 7 |  | 7 |  | 7 |  | 5 |
Add estimated interest factor for rentals |  | 24 |  | 31 |  | 31 |  | 33 |  | 36 |  | 44 |
Earnings (loss) before income taxes, noncontrolling interest, net, fixed charges and preferred stock dividends |  | $ | 631 |  | $ | 701 |  | $ | 360 |  | $ | (102 | ) | $ | (453 | ) | $ | 122 |
Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on indebtedness |  | $ | 165 |  | $ | 229 |  | $ | 248 |  | $ | 249 |  | $ | 246 |  | $ | 221 |
Amortization of debt expense |  | 4 |  | 6 |  | 7 |  | 7 |  | 7 |  | 5 |
Estimated interest factor for rentals |  | 24 |  | 31 |  | 31 |  | 33 |  | 36 |  | 44 |
Total fixed charges |  | $ | 193 |  | $ | 266 |  | $ | 286 |  | $ | 289 |  | $ | 289 |  | $ | 270 |
Preferred stock dividends(a) |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Combined fixed charges and preferred stock dividends |  | $ | 193 |  | $ | 266 |  | $ | 286 |  | $ | 289 |  | $ | 289 |  | $ | 270 |
Ratio of earnings to fixed charges |  | 3.3 |  | 2.6 |  | 1.3 |  | (0.4 | ) | (1.6 | ) | 0.5 |
Ratio of earnings to combined fixed charges and preferred stock dividends |  | 3.3 |  | 2.6 |  | 1.3 |  | (0.4 | ) | (1.6 | ) | 0.5 |
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b) |  | 3.3 |  | 2.6 |  | 1.7 |  | 1.2 |  | 1.0 |  | 1.5 |

(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; and 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.

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