EX-12.1 3 dex121.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Computation of Ratio of Earnings to Fixed Charges

Exhibit 12.1

Warner Music Group Corp.

Computation of Ratio of Earnings to Fixed Charges

(Unaudited)

 

   

Three

Months

Ended
February 29,
2004

    

Seven

Months

Ended
September 30,
2004

    

Twelve

Months

Ended
September 30,
2005

    

Twelve

Months

Ended
September 30,
2006

  

Twelve

Months

Ended
September 30,
2007

  

Income (Loss) before income taxes (1)

   $ (15 )   $ (208 )   $ (114 )   $ 107   $ 28  

Less:

          

Minority interest

     —         —         —         —       (5 )

Add:

          

Fixed charges

     8       99       149       207     211  

Income as adjusted before income taxes

   $ (7 )   $ (109 )   $ 35     $ 314   $ 234  

Fixed charges

          

Interest expense

     4       91       132       194     199  

Portion of rental expense representative of interest (2)

     4       8       12       13     12  

Preferred stock dividend requirements of consolidated subsidiaries (1)

     —         —         5       —       —    
                                     

Total fixed charges

     8       99       149       207     211  

Deficiency in earnings over fixed charges

     (15 )     (208 )   $ (114 )     N/A     N/A  

Ratio of earnings to fixed charges

     N/A       N/A       N/A       1.52     1.11  
(1) The preferred stock dividend requirements of Holdings, a consolidated subsidiary, is included in fixed charges (i.e., the denominator of the ratio calculation) but excluded from the numerator of the ratio calculation because such amount was not deducted in arriving at Warner Music Group Corp.’s pre-tax income (loss) from continuing operations as defined. If Holdings did not incur fixed charges, the minority interest in pre-tax income of Holdings would be subtracted in determining earnings.

(2)

Estimated at  1/3 of total rent expense.