EX-12 6 mhfi-ex12x20151231xq4.htm RATIO OF EARNINGS TO FIXED CHARGES Exhibit


Exhibit (12)
McGraw Hill Financial, Inc.
Computation of Ratio of Earnings to Fixed Charges
(in millions)
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
 
2012
 
2011
 
Earnings:
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before taxes on income
$
1,815

1 
$
54

2 
$
1,299

3 
$
1,089

4 
$
975

5 
Fixed charges 6
162

  
118

  
124

  
128

  
131

  
Total earnings
$
1,977

  
$
172

  
$
1,423

  
$
1,217

  
$
1,106

  
Fixed charges: 6
 
 
 
 
 
 
 
 
 
 
Interest expense
$
101

  
$
58

  
$
62

  
$
81

  
$
86

  
Portion of rental payments deemed to be interest
59

  
59

  
61

  
46

  
44

  
Amortization of debt issuance costs and discount
2

  
1

  
1

  
1

  
1

  
Total fixed charges
$
162

  
$
118

  
$
124

  
$
128

  
$
131

  
Ratio of earnings to fixed charges:
12.2

x 
1.5

x 
11.5

x 
9.5

x 
8.4

x 

1 Includes the impact of the following items: costs related to identified operating efficiencies primarily related to restructuring of $56 million, legal settlement charges partially offset by insurance recoveries of $54 million, acquisition-related costs of $37 million, and a gain of $11 million on the sale of our interest in a legacy McGraw Hill Construction investment.
2
Includes the impact of the following items: $1.6 billion of legal and regulatory settlements, restructuring charges of $86 million, and $4 million of professional fees largely related to corporate development activities.
3
Includes the impact of the following items: $77 million of legal settlements, $64 million charge for costs necessary to enable the separation of MHE and reduce our cost structure, a $36 million non-cash impairment charge related to the sale of our data center, a $28 million restructuring charge in the fourth quarter primarily related to severance, $13 million related to terminating various leases as we reduce our real estate portfolio and a $24 million net gain from our dispositions.
4
Includes the impact of the following items: $135 million charge for costs necessary to enable the separation of MHE and reduce our cost structure, a $65 million restructuring charge, transaction costs of $15 million for our S&P Dow Jones Indices LLC joint venture, an $8 million charge related to a reduction in our lease commitments, partially offset by a vacation accrual reversal of $52 million.
5 Includes the impact of a $31 million restructuring charge and a $10 million charge for costs necessary to enable the separation of MHE and reduce our cost structure.
6 "Fixed charges" consist of (1) interest on debt and interest related to the sale leaseback of Rock-McGraw, Inc. (see Note 12 - Commitments and Contingencies to the consolidated financial statements under Item 8, Consolidated Financial Statements and Supplementary Data, in this Form 10-K), (2) the portion of our rental expense deemed representative of the interest factor in rental expense, and (3) amortization of debt issue costs and discount to any indebtedness.