EX-12 7 ex12.txt COMPUTATION OF RATIO EARNINGS TO FIXED CHARGES 1 H&R BLOCK, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (AMOUNTS IN THOUSANDS) EXHIBIT 12
2000 1999 1998 1997 1996 ---------- ---------- ---------- --------- --------- Pretax income from continuing operations (a) $ 412,266 $ 383,541 $ 296,433 $ 232,083 $ 200,006 ========= ========= ========= ========= ========= FIXED CHARGES: Interest expense 153,500 69,338 38,899 608 - Interest portion of net rent expense (b) 45,274 33,218 28,248 25,998 21,781 --------- --------- --------- --------- --------- Total fixed charges 198,774 102,556 67,147 26,606 21,781 --------- --------- --------- --------- --------- Earnings before income taxes and fixed charges $ 611,040 $ 486,097 $ 363,580 $ 258,689 $ 221,787 ========= ========= ========= ========= ========= Ratio of earnings to fixed charges (c) 3.1 4.7 5.4 9.7 10.2 ========= ========= ========= ========= =========
(a) Pretax income from continuing operations is shown with CompuServe Corporation and the Credit Card Segment as Discontinued Operations for all years presented. (b) One-third of net rent expense is the portion deemed representative of the interest factor. (c) The decrease in the ratio of earnings to fixed charges in 1998 is primarily attributable to the acquisition of Option One Mortgage Corporation on June 17, 1997. Without the interest expense incurred on the long-term debt issued to acquire Option One and the interest expense on mortgage loan borrowings the ratio of earnings to fixed charges would have been 10.0.