EX-12 4 y46387ex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 Exhibit (12) THE McGRAW-HILL COMPANIES, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (RESTATED)
Years Ended December 31, ----------------------------------------------------------------- 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- (In thousands of dollars) Earnings Earnings from operations before income tax expense, extraordinary item (net of taxes) and cumulative change in $757,477 $691,059 $549,146 $462,544 $806,107 accounting (net of taxes) (a)(b)(c)(d)(e) Fixed charges (f) 92,098 78,198 79,618 83,840 77,563 Capitalized interest - - - - - -------- -------- -------- -------- -------- Total Earnings $849,575 $769,257 $628,764 $546,384 $883,670 ======== ======== ======== ======== ======== Fixed Charges(f) Interest expense $56,434 $ 44,953 $ 51,857 $ 56,771 $ 51,347 Portion of rental payments Deemed to be interest 35,664 33,245 27,761 27,069 26,216 -------- -------- -------- -------- -------- Total Fixed Charges $ 92,098 $ 78,198 $ 79,618 $ 83,840 $ 77,563 ========= ======== ======== ======== ======== Ratio of Earnings to Fixed charges: Earnings from operations before income tax expense, cumulative adjustment, extraordinary item and net of 9.2x 9.8x 7.9x 6.5x 11.4x taxes (a)(b)(c)(d)(e)(f)
(a) 2000 includes a $16.6 million pre-tax one-time gain on the sale of the company's Tower Group International Division. (b) 1999 includes a $39.7 million pre-tax one-time gain on the sale of the company's Petrochemical publications. (c) 1998 includes the impact from the early extinguishment of $155 million of the company's 9.43% Notes in 1998, a $26.7 million gain on the sale of a building at 65 Broadway and a $16.0 million charge for the write-down of assets at the Continuing Education Center. (d) 1997 includes a $33.2 million pre-tax one-time provision for real estate write-downs related to the consolidation of office space in New York City and a $20.4 million pre-tax gain on the sale of Datapro Information Services. 27 2 (e) On October 15, 1996, the company completed the exchange of its Shepard's/McGraw-Hill legal publishing unit for the Times Mirror Higher Education Group. The 1996 results include a pre-tax gain of $418.7 million and a one-time charge of $25 million for costs of integrating the company's College division with the acquired higher education business. (f) For purposes of computing the ratio of earnings to fixed charges, "earnings from continuing operations before income tax expense" excludes undistributed equity in income of less than 50%-owned companies. "Fixed charges" consist of (1) interest on debt, and (2) the portion of the company's rental expense deemed representative of the interest factor in rental expense. 28