Exhibit (12)
The McGraw-Hill Companies, Inc.
Computation of Ratio of Earnings to Fixed Charges
| Sept. 30, 2006 | Sept. 30, 2005 | |||||||||||
| Nine | Twelve | Nine | ||||||||||
| (in thousands) | Months | Months | Months | |||||||||
| Earnings | ||||||||||||
| Earnings from operations before taxes on income (Note) | $ | 1,078,745 | $ | 1,369,123 | $ | 1,042,584 | ||||||
| Fixed charges | 69,560 | 88,047 | 61,924 | |||||||||
| Total Earnings | $ | 1,148,305 | $ | 1,484,170 | $ | 1,104,508 | ||||||
| Fixed Charges (Note) | ||||||||||||
| Interest expense | 22,500 | 26,242 | $ | 15,880 | ||||||||
| Portion of rental payments deemed to be interest | 47,060 | 61,805 | 46,044 | |||||||||
| Total Fixed Charges | $ | 69,560 | $ | 88,047 | $ | 61,924 | ||||||
| Ratio of Earnings to Fixed Charges | 16.5 | x | 16.9 | x | 17.8 | x | ||||||
| (Note) | For the three and nine months ended September 30, 2006, earnings from operations before taxes on income includes $29.2 million and $106.2 million of stock-based compensation expense, respectively and a $15.4 million restructuring charge. | |
| For the twelve months ended September 30, 2006, earnings from operations before taxes on income includes $129.0 million of stock-based compensation expense and a $38.6 million restructuring charge. | ||
| “Fixed charges” consist of (1) interest on debt and interest related to the sale leaseback of Rock-McGraw, Inc. (See Note 11 to the Company’s consolidated financial statements); and (2) the portion of the Company’s rental expense deemed representative of the interest factor in rental expense. |
52