EX-12.1 2 0002.txt RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 AOL TIME WARNER INC. RATIO OF EARNINGS TO FIXED CHARGES Pro Forma (a) --------------------------------------------------------------------------------- Three Months Nine Months Ended Year Ended Ended Year Ended September 30, 2000 June 30, 2000 September 30, 2000 December 31, 1999 --------------------------------------------------------------------------------- Earnings: Net income (loss) before income taxes and cumulative effect of account change $ (735) $ (1,637) $ (2,318) $ (812) Interest expense 458 1,638 1,307 1,535 Amortization of capitalized interest 1 8 5 9 Portion of rents representative of an interest factor 102 355 287 339 Preferred stock dividend requirements of majority-owned subsidiaries 13 52 39 57 Adjustment for partially owned subsidiaries and 50% owned companies 67 230 174 440 Undistributed losses (earnings) of less than 50% owned companies -- 10 1 46 ---------- --------- ---------- -------- Total earnings $ (94) $ 656 $ (505) $ 1,614 ========== ========= ========== ======== Fixed Charges: Interest expense $ 458 $ 1,638 $ 1,307 $ 1,535 Capitalized interest 3 10 8 8 Portion of rents representative of an interest factor 102 355 287 339 Preferred stock dividend requirements of majority- owned subsidiaries 13 52 39 57 Adjustment for partially owned subsidiaries and 50% owned companies 29 95 80 86 ---------- --------- ---------- -------- Total fixed charges $ 605 $ 2,150 $ 1,721 $ 2,025 ========== ========= ========== ======== Pretax income necessary to cover preferred dividend requirements 5 41 19 88 ---------- --------- ---------- -------- Total combined $ 610 $ 2,191 $ 1,740 $ 2,113 ========== ========= ========== ======== Ratio of earnings to fixed charges (deficiency in the coverage of fixed charges by earnings before fixed charges) $ (699) $ (1,494) $ (2,226) $ (411) ========== =========== ========== ======== Ratio of earnings to combined fixed charges and preferred dividend requirements (deficiency in the coverage of combined fixed charges and preferred dividend requirements deficiency) $ (704) $ (1,535) $ (2,245) $ (499) ========== ========= ========== ======== (a) AOL Time Warner's pro forma ratios are presented to give effect to the merger of America Online and Time Warner as if it occurred at the beginning of each period. Because America Online and Time Warner have different fiscal years, and the combined company has adopted the calendar year-end of Time Warner, pro forma ratios for AOL Time Warner are presented on two different bases as follows: (1) a June 30 fiscal year basis, which is consistent with America Online's historical fiscal year-end, and (2) a December 31 calendar year basis, which is consistent with Time Warner's historical fiscal year-end and that of AOL Time Warner going forward. In addition, because America Online is the predecessor of AOL Time Warner, AOL Time Warner's historical ratios are the same as America Online's historical ratios. For further reference see America Online's ratio information.