EXHIBIT 12
TIME WARNER
RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIOS)
PRO FORMA (a)
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NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, 1996 DECEMBER 31, 1995
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ISSUER GUARANTOR ISSUER GUARANTOR
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Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ (134) $ (322) $ (58) $ (100)
Interest expense.......... 650 799 871 1,089
Amortization of
capitalized interest.... 1 14 4 15
Portion of rents
representative of an
interest factor......... 43 66 60 91
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 67 67
Adjustment for partially
owned subsidiaries and
50% owned companies..... 594 594 649 649
Undistributed losses of
less than 50% owned
companies............... 24 6 117 104
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Total earnings........ $1,232 $ 1,211 $1,710 $ 1,915
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Fixed Charges:
Interest expense.......... $ 650 $ 799 $ 871 $ 1,089
Capitalized interest...... 1 17 6 21
Portion of rents
representative of an
interest factor......... 43 66 60 91
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 67 67
Adjustment for partially
owned subsidiaries and
50% owned companies..... 446 446 655 655
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Total fixed charges... $1,194 $ 1,382 $1,659 $ 1,923
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Ratio of earnings to fixed
charges (deficiency in the
coverage of fixed charges by
earnings before fixed
charges).................... 1.0x $ (171) 1.0x $ (8)
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HISTORICAL (b)
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NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
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1996 1995 1995 1994 1993 1992 1991
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Earnings:
Net income (loss) before
income taxes and
extraordinary items.....$ (172) $ (94) $ 2 $ 89 $ 81 $ 320 $ 52
Interest expense.......... 688 663 877 769 698 729 912
Amortization of
capitalized interest.... 1 1 2 2 -- 19 23
Portion of rents
representative of an
interest factor......... 43 39 57 52 54 85 78
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 3 11 -- -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 594 530 691 665 663 97 73
Undistributed losses of
less than 50% owned
companies............... 24 51 117 82 47 56 56
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Total earnings........$1,232 $1,193 $1,757 $1,659 $1,543 $1,306 $1,194
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Fixed Charges:
Interest expense..........$ 688 $ 663 $ 877 $ 769 $ 698 $ 729 $ 912
Capitalized interest...... 1 1 4 2 -- 15 17
Portion of rents
representative of an
interest factor......... 43 39 57 52 54 85 78
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 3 11 -- -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 446 533 697 668 664 81 45
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Total fixed charges...$1,232 $1,239 $1,646 $1,491 $1,416 $ 910 $1,052
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Ratio of earnings to fixed
charges (deficiency in the
coverage of fixed charges by
earnings before fixed
charges).................... 1.0x $ (46) 1.1x 1.1x 1.1x 1.4x 1.1x
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(a) The pro forma ratio of earnings to fixed charges (or coverage deficiencies)
for each of the Issuer and the Guarantor for the nine months ended
September 30, 1996 and the year ended December 31, 1995 give effect to (i)
the Issuer Transactions, as defined elsewhere herein, (ii) certain other
transactions as defined and described in the pro forma consolidated
condensed financial statements contained in the Guarantor's Current Report
on Form 8-K dated November 14, 1996, including certain asset sales and debt
refinancings and (iii) with respect to the Guarantor only, the TBS
Transaction, as if such transactions had occurred at the beginning of 1995.
(b) In connection with the TBS Transaction that occurred on October 10, 1996,
the Guarantor, formerly a wholly owned subsidiary of the Issuer, acquired
each outstanding share of capital stock of the Issuer (other than shares
held directly or indirectly by the Issuer) and became the parent of the
Issuer. Accordingly, the historical ratios of earnings to fixed charges (or
coverage deficiencies) of the Issuer and the Guarantor are the same for all
periods prior to such date because the Issuer is treated for financial
reporting purposes as the predecessor of the Guarantor.