EX-12 3 a15-17818_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, |
|  | 2015 |  | 2014 |  | 2013 |  | 2012 |  | 2011 |  | 2010 |
Earnings Before Income Taxes, Preferred Stock Dividends and Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations before income taxes |  | $ | 529 |  | $ | 507 |  | $ | 386 |  | $ | 155 |  | $ | (322 | ) | $ | 51 |
Deduct equity in undistributed (earnings) loss of fifty-percent- or-less-owned companies |  | (2 | ) | 2 |  | (16 | ) | — |  | (9 | ) | — |
Add interest on indebtedness, net |  | 168 |  | 221 |  | 230 |  | 249 |  | 250 |  | 249 |
Add amortization of debt expense |  | 4 |  | 5 |  | 6 |  | 7 |  | 7 |  | 7 |
Add estimated interest factor for rentals |  | 14 |  | 33 |  | 31 |  | 31 |  | 33 |  | 36 |
Earnings (loss) before income taxes, noncontrolling interest, fixed charges and preferred stock dividends |  | $ | 713 |  | $ | 768 |  | $ | 637 |  | $ | 442 |  | $ | (41 | ) | $ | 343 |
Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on indebtedness |  | $ | 169 |  | $ | 221 |  | $ | 229 |  | $ | 248 |  | $ | 249 |  | $ | 246 |
Amortization of debt expense |  | 4 |  | 5 |  | 6 |  | 7 |  | 7 |  | 7 |
Estimated interest factor for rentals |  | 14 |  | 33 |  | 31 |  | 31 |  | 33 |  | 36 |
Total fixed charges |  | $ | 187 |  | $ | 259 |  | $ | 266 |  | $ | 286 |  | $ | 289 |  | $ | 289 |
Preferred stock dividends(a) |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Combined fixed charges and preferred stock dividends |  | $ | 187 |  | $ | 259 |  | $ | 266 |  | $ | 286 |  | $ | 289 |  | $ | 289 |
Ratio of earnings to fixed charges |  | 3.8 |  | 3.0 |  | 2.4 |  | 1.5 |  | (0.1 | ) | 1.2 |
Ratio of earnings to combined fixed charges and preferred stock dividends |  | 3.8 |  | 3.0 |  | 2.4 |  | 1.5 |  | (0.1 | ) | 1.2 |
Ratio of earnings to combined fixed charges and preferred stock dividends excluding certain items (b) |  | 3.8 |  | 2.9 |  | 2.4 |  | 1.7 |  | 1.4 |  | 1.3 |

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

(b) Excludes the 2014 litigation settlement income of $9 million; the 2012 non-cash, pre-tax impairment charge for other intangible assets of $42 million and litigation expense of $1 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 $1 million and non-cash and pre-tax impairment charges for financial investments of $34 million.

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