Time Warner
Ratio of Earnings to Fixed Charges EXHIBIT 12
(In millions, except ratios)
Nine Months Ended
September 30,
1995 1994
Earnings:
Net income (loss) before income taxes and
extraordinary item $ (94) $ 29
Interest expense 663 571
Amortization of capitalized interest 1 1
Portion of rents representative of an interest factor 39 40
Preferred stock dividend requirements of majority-
owned subsidiaries 3 -
Adjustment for partially owned subsidiaries and 50%
owned companies 530 485
Undistributed losses of less than 50%
owned companies 51 66
Total earnings $1,193 $1,192
Fixed Charges:
Interest expense $ 663 $ 571
Capitalized interest 1 1
Portion of rents representative of an
interest factor 39 40
Preferred stock dividend requirements
of majority-owned subsidiaries 3 -
Adjustment for partially owned subsidiaries
and 50% owned companies 533 485
Total fixed charges $1,239 $1,097
Ratio of earnings to fixed charges
(deficiency in the coverage of fixed
charges by earnings before fixed charges)(a) $ (46) $ 1.1x
Years Ended December 31
Restated
1994 1993 1992 1992 1991 1990
Earnings:
Net income (loss) before
income taxes and
extraordinary item $ 89 $ 81 $323 $320 $ 52 $(145)
Interest expense 769 698 287 729 912 1,096
Amortization of
capitalized interest 2 - 1 19 23 22
Portion of rents
representative of
an interest factor 52 54 52 85 78 74
Preferred stock dividend
requirements of majority-
owned subsidiaries - - - - - -
Adjustment for partially
owned subsidiaries and
50% owned companies 665 663 590 97 73 57
Undistributed losses
of less than 50%
owned companies 82 47 56 56 56 17
Total earnings $1,659 $1,543 $1,309 $1,306 $1,194 $1,121
Fixed Charges:
Interest expense $ 769 $ 698 $ 287 $ 729 $ 912 $1,096
Capitalized interest 2 - - 15 17 19
Portion of rents
representative of
an interest factor 52 54 52 85 78 74
Preferred stock dividend
requirements of
majority-owned
subsidiaries - - - - - -
Adjustment for partially
owned subsidiaries and
50% owned companies 668 664 571 81 45 33
Total fixed charges $1,491 $1,416 $910 $910 $1,052 $1,222
Ratio of earnings to fixed
charges (deficiency in
the coverage of fixed
charges by earnings
before fixed charges)(a) 1.1x 1.1x 1.4x 1.4x 1.1x ($101)
(a) For purposes of the ratio of earnings to fixed charges, earnings
were calculated by adding pretax income, interest expense, previously
capitalized interest amortized to expense, the portion of rents
representative of an interest factor, preferred stock dividend requirements
of majority-owned subsidiaries, Time Warner's proportionate share of
such items for its partially-owned subsidiaries and 50%-owned companies,
and undistributed losses of less-than-50% owned companies. Fixed charges
consist of interest expense, interest capitalized, the portion of rents
representative of an interest factor, preferred stock dividend require-
ments of majority-owned subsidiaries and Time Warner's proportionate
share of such items for partially-owned subsidiaries and 50%-owned
companies. For periods in which earnings before fixed charges were
insufficient to cover fixed charges, the dollar amount of coverage
deficiency, instead of the ratio, is disclosed. Earnings as defined
include significant noncash charges for depreciation and
amortization. Fixed charges for the nine months ended September
30, 1995 and 1994 include noncash interest expense of $156 million
and $162 million, respectively, relating to the Redeemable Reset
Notes due August 15, 2002 and Time Warner's zero coupon convertible
notes due 2012 and 2013.