EX-12.1 9 ex-12_1.txt EXHIBIT 12.1 EXHIBIT 12.1 YOUNG & RUBICAM INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES The following table shows the ratios of earning to fixed charges of Young & Rubicam Inc. for period indicated.
SIX MONTHS ENDED YEARS ENDED AND AT DECEMBER 31, JUNE 30, ----------------------------------------------------- 2000 1999 1998 1997 1996 1995 ---------- -------- -------- -------- --------- -------- (IN $ THOUSANDS, EXCEPT RATIO INFORMATION) EARNINGS Income (loss) before income taxes........................... $113,594 $278,220 $(86,997) $ 36,304 $(250,617) $ 7,905 Dividends from unconsolidated companies....................... 418 3,714 3,467 2,728 2,691 2,101 Interest expense.................. 12,189 24,069 26,001 42,879 28,584 27,441 Interest component of rent expenses........................ 15,705 28,367 25,167 24,800 20,967 20,790 -------- -------- -------- -------- --------- ------- TOTAL EARNINGS (DEFICIENCY)....... 141,906 334,370 (32,362) 106,711 (198,375) 58,237 -------- -------- -------- -------- --------- ------- FIXED CHARGES Interest expense.................. 12,189 24,069 26,001 42,879 28,584 27,441 Interest component of rent expenses........................ 15,705 28,367 25,167 24,800 20,967 20,790 -------- -------- -------- -------- --------- ------- TOTAL FIXED CHARGES............... 27,894 52,436 51,168 67,679 49,551 48,231 -------- -------- -------- -------- --------- ------- RATIO OF EARNINGS TO FIXED CHARGES (DEFICIENCY IN THE COVERAGE OF FIXED CHARGES BY EARNINGS BEFORE FIXED CHARGES) (A)(B)(C)(D)..... 5.09x 6.38x $(83,530) 1.58x $(247,926) 1.21x
-------------------------- (a) The ratio of earnings to fixed charges has been computed by dividing total earnings by total fixed charges. Coverage deficiencies have been computed by subtracting fixed charges from total earnings. Earnings were calculated by adding (1) income (loss) before income taxes, (2) dividends from unconsolidated companies, and (3) fixed charges. Fixed charges consist of interest and one-third of rent expense as representative of the interest portion of rentals. (b) As a result of the loss before income taxes incurred for the years ended 1998 and 1996, the ratio coverage was less than 1:1. (c) Excluding the effects of income, totaling $12.2 million, recorded in the six months ended June 30, 2000, in connection with (A) the gain on the sale of certain assets and rights known as Y&R Teamspace to eMotion Inc. and (B) other net gains from investing activities in the first half of 2000, including additional consideration received as a result of achieving revenue and operating profit performance targets of the Brand Dialogue assets contributed to Luminant Worldwide Corporation in 1999, the ratio of earnings to fixed charges would have been 4.65x for the six months ended June 30, 2000. (d) Excluding the effects of the income recorded in connection with the 1999 net pre-tax gain on the sale of certain assets of our Brand Dialogue operations in exchange for an ownership interest in Luminant Worldwide Corporation and additional consideration received in the fourth quarter of 1999 as a result of achieving revenue and operating profit performance targets of the Brand Dialogue contributed assets totaling $85.0 million, the ratio of earnings to fixed charges would have been 4.76x for the year ended December 31, 1999. Excluding the effects of the $234.4 million of charges recorded in connection with the consummation of our initial public offering of common stock in May 1998, the ratio of earnings to fixed charges would have been 3.95x for the year ended December 31, 1998. Excluding the effects of the $315.4 million of charges recorded in connection with our recapitalization in December 1996, the ratio of earnings to fixed charges for the year ended December 31,1996 would have been 2.36x.