EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
Year Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
Earnings: | ||||||||||||||||||||
Net Income (Loss) from continuing operations before income taxes, discontinued operations and cumulative effect of accounting change | $ | 4,542 | $ | 4,366 | $ | 3,919 | $ | 3,237 | $ | (4,397 | ) | |||||||||
Interest expense(1)(2) | 1,363 | 1,321 | 1,277 | 1,521 | 2,499 | |||||||||||||||
Amortization of capitalized interest | 1 | 1 | 1 | 2 | 3 | |||||||||||||||
Portion of rents representative of an interest factor(3) | 164 | 147 | 138 | 176 | 234 | |||||||||||||||
Adjustment for equity earnings or losses of investee companies, net of cash distributions | 88 | 95 | 38 | 74 | 21 | |||||||||||||||
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Total earnings (loss) | $ | 6,158 | $ | 5,930 | $ | 5,373 | $ | 5,010 | $ | (1,640 | ) | |||||||||
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Fixed Charges: | ||||||||||||||||||||
Interest expense(1)(2) | $ | 1,363 | $ | 1,321 | $ | 1,277 | $ | 1,521 | $ | 2,499 | ||||||||||
Capitalized interest(4) | 5 | 4 | 2 | 1 | 1 | |||||||||||||||
Portion of rents representative of an interest factor(3) | 164 | 147 | 138 | 176 | 234 | |||||||||||||||
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Total fixed charges | $ | 1,532 | $ | 1,472 | $ | 1,417 | $ | 1,698 | $ | 2,734 | ||||||||||
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Ratio of earnings to fixed charges | 4.0 | x | 4.0 | x | 3.8 | x | 3.0 | x | — | (5) | ||||||||||
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(1) | Earnings and fixed charges exclude accrued interest on uncertain tax positions that is included in income tax expense. |
(2) | For the years ended December 31, 2012, 2011, 2010, 2009, and 2008, amounts include $0 million, $0 million, $0 million, $218 million, and $970 million, respectively, related to discontinued operations. |
(3) | For the years ended December 31, 2012, 2011, 2010, 2009, and 2008, amounts include $0 million, $0 million, $0 million, $29 million, and $78 million, respectively, related to discontinued operations. |
(4) | For the years ended December 31, 2012, 2011, 2010, 2009, and 2008, amounts include $0 million $0 million, $0 million, $0 million, and $1 million, respectively, related to discontinued operations. |
(5) | Time Warner’s earnings were insufficient to cover its fixed charges by $4.374 billion for the year ended December 31, 2008. Net loss from continuing operations before income taxes and discontinued operations for 2008 includes $7.139 billion of noncash impairments related to goodwill and identifiable intangible assets at Time Warner’s Publishing segment. |