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H&R BLOCK, INC.
GUARANTOR
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS)
EXHIBIT 12(b)
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<CAPTION>
1999 1998 1997 1996 1995
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(c)
<S> <C> <C> <C> <C> <C>
Pretax income from continuing operations(a) $ 383,541 $296,433 $232,083 $200,006 $153,468
========== ========= ========= ========= ==========
FIXED CHARGES:
Interest expense 69,338 38,899 608 - 2
Interest portion of net rent expense(b) 33,218 28,248 25,998 21,781 20,709
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Total fixed charges 102,556 67,147 26,606 21,781 20,711
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Earnings before income taxes and fixed charges $ 486,097 $363,580 $258,689 $221,787 $174,179
========== ========= ========= ========= ==========
Ratio of earnings to fixed charges(d) 4.7 5.4 9.7 10.2 8.4
========== ========= ========= ========= ==========
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(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) Included in earnings for 1995 was a nonrecurring charge of $83,508 for
purchased research and development related to the acquisition of SPRY, Inc
as disclosed in the Acquisitions note to Block's consolidated financial
statements for the year ended April 30, 1997. If such charges had not
occurred, the ratio of earnings to fixed charges would have been 12.5.
(d) 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.
