S&P Global (SPGI) 10-K 2003 FY Annual report

Exhibit (12)

THE McGRAW-HILL COMPANIES, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

			Years Ended December 31,
			2003			2002			2001			2000			1999
			(In thousands of dollars)
Earnings
	Earnings from continuing operations before income tax expense, and cumulative change in accounting (net of taxes) (a)(b)(c)(d)(e)		$	1,113,676		$	883,492		$	606,444		$	749,532		$	685,477
	Fixed charges (f)			72,411			76,094			99,472			92,098			78,198
	Capitalized interest			—			—			—			—			—
		Total Earnings	$	1,186,087		$	959,586		$	705,916		$	841,630		$	763,675
	Fixed Charges(f)
		Interest expense	$	12,275		$	25,004		$	57,976		$	56,434		$	44,953
		Portion of rental payments deemed to be interest		60,136			51,090			41,496			35,664			33,245
		Total Fixed Charges	$	72,411		$	76,094		$	99,472		$	92,098		$	78,198
	Ratio of Earnings to Fixed charges:
		Earnings from operations before income tax expense, cumulative adjustment, (net of taxes) (a)(b)(c)(d)(e)(f)		16.4	x		12.6	x		7.1	x		9.1	x		9.8	x

(a)	2003 includes a $131.3 million pre-tax gain on the sale of 45% interest of Rock-McGraw, Inc., 1221 Building.
(b)	2002 includes a $14.5 million pre-tax loss on the sale of MMS International.
(c)	2001 includes a $159.0 million provision for restructuring and asset write-down, a $6.9 million pre-tax gain on the sale of real estate, a $8.8 million pre-tax gain on the sale of DRI, and a $22.8 million pre-tax charge for the write-down of certain assets, the shutdown ofBlue Listand the contribution of Rational Investors.
(d)	2000 includes a $16.6 million pre-tax gain on the sale of the Company’s Tower Group International Division.
(e)	1999 includes a $39.7 million pre-tax gain on the sale of the Company’s Petrochemical publications.
(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, primarily the Company’s earnings in its 45% interest in Rock-McGraw, Inc. The Rock-McGraw earnings over the past five years are as follows: 2003 $16.6 million; 2002 $13.9 million; 2001 $9.7 million; 2000 $9.9 million; and 1999 $6.6 million. “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. As noted in footnote (a) the company will not have earnings from Rock-McGraw in 2004.

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