EXHIBIT 12.2
TIME WARNER
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(IN MILLIONS, EXCEPT RATIOS)
PRO FORMA
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SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
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(1) (2) (1) (2)
COMPANY COMPANY COMPANY COMPANY
PRE-TBS(a) POST-TBS(a) PRE-TBS(a) POST-TBS(a)
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EARNINGS:
Net income (loss) before income
taxes and extraordinary item.... $ (42) $ (126) $ (58) $ (98)
Interest expense.................. 433 533 871 1,089
Amortization of capitalized
interest........................ 1 10 4 15
Portion of rents representative of
an interest factor.............. 29 44 60 91
Preferred stock dividend
requirements of majority-owned
subsidiaries.................... 36 36 67 67
Adjustment for partially-owned
subsidiaries and 50%-owned
companies....................... 396 396 649 649
Undistributed losses of less than
50%-owned companies............. 30 17 117 104
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Total earnings................ $ 883 $ 910 $1,710 $ 1,917
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FIXED CHARGES:
Interest expense.................. $ 433 $ 533 $ 871 $ 1,089
Capitalized interest.............. 2 11 6 21
Portion of rents representative of
an interest factor.............. 29 44 60 91
Preferred stock dividend
requirements of majority-owned
subsidiaries.................... 36 36 67 67
Adjustment for partially-owned
subsidiaries and 50%-owned
companies....................... 305 305 655 655
Pretax income necessary to cover
preferred stock dividend
requirements.................... 249 249 438 438
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Total combined fixed charges
and preferred stock
dividends................... $1,054 $ 1,178 $2,097 $ 2,361
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Ratio of earnings to combined
fixed charges and preferred
stock dividend requirements
(deficiency in the coverage of
combined fixed charges and
preferred stock dividends by
earnings before fixed charges
and preferred stock
dividends)...................... $ (171) $ (268) $ (387) $ (444)
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HISTORICAL
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SIX MONTHS
ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
-------------- --------------------------------------------
1996 1995 1995 1994 1993 1992 1991
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EARNINGS:
Net income (loss) before income
taxes and extraordinary item.... $ (80) $ 33 $ 2 $ 89 $ 81 $ 320 $ 52
Interest expense.................. 471 429 877 769 698 729 912
Amortization of capitalized
interest........................ 1 2 2 2 -- 19 23
Portion of rents representative of
an interest factor.............. 29 26 57 52 54 85 78
Preferred stock dividend
requirements of majority-owned
subsidiaries.................... 36 -- 11 -- -- -- --
Adjustment for partially-owned
subsidiaries and 50%-owned
companies....................... 396 356 691 665 663 97 73
Undistributed losses of less than
50%-owned companies............. 30 34 117 82 47 56 56
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Total earnings................ $ 883 $880 $1,757 $1,659 $1,543 $1,306 $ 1,194
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FIXED CHARGES:
Interest expense.................. $ 471 $429 $ 877 $ 769 $ 698 $ 729 $ 912
Capitalized interest.............. 2 2 4 2 -- 15 17
Portion of rents representative of
an interest factor.............. 29 26 57 52 54 85 78
Preferred stock dividend
requirements of majority-owned
subsidiaries.................... 36 -- 11 -- -- -- --
Adjustment for partially-owned
subsidiaries and 50%-owned
companies....................... 305 359 697 668 664 81 45
Pretax income necessary to cover
preferred stock dividend
requirements.................... 167 14 72 20 218 905 1,382
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Total combined fixed charges
and preferred stock
dividends................... $ 1,010 $830 $1,718 $1,511 $1,634 $1,815 $ 2,434
------- ---- ------ ------ ------ ------ -------
------- ---- ------ ------ ------ ------ -------
Ratio of earnings to combined
fixed charges and preferred
stock dividend requirements
(deficiency in the coverage of
combined fixed charges and
preferred stock dividends by
earnings before fixed charges
and preferred stock
dividends)...................... $ (127) 1.1x 1.0x 1.1x $ (91) $ (509) $(1,240)
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(a) The pro forma ratio of earnings to combined fixed charges and preferred
stock dividends of the Company for the six months ended June 30, 1996 gives
effect in column (1) to the Series K Refinancing and the 1996 Convertible
Debt Refinancing and in column (2) to such transactions and the TBS
Transaction, in each case as if the transactions occurred at the beginning
of 1995. The pro forma ratio of earnings to combined fixed charges and
preferred stock dividends of the Company for the year ended December 31,
1995 gives effect in column (1) to the ITOCHU/Toshiba Transaction, the
Cable Transactions, the Debt Refinancings and the Asset Sale Transactions
and in column (2) to each of such transactions and the TBS Transaction, in
each case as if the transactions occurred at the beginning of such period.