EX-12.1 4 ex12-1.htm
Exhibit 12.1

 
GRAHAM HOLDINGS COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)


   
Year Ended December 31
  
   
2017
    
2016
    
2015
    
2014
    
2013
  
Earnings:
                              
Income (loss) from continuing operations before income taxes and equity in earnings (losses) of affiliates
  
$
186,038
    
$
258,595
    
$
(120,193
)
  
$
977,333
    
$
92,016
  
Add:                 Fixed charges
    
60,773
      
64,347
      
67,873
      
71,753
      
75,566
  
Amortization of capitalized interest
    
9
      
–
      
–
      
–
      
–
  
Distributed income of equity-method investees
    
397
      
922
      
421
      
3,853
      
14,876
  
Subtract:      Interest capitalized
    
(281
)
    
(388
)
    
–
      
–
      
–
  
Noncontrolling interest
    
(730
)
    
(1,423
)
    
(2,352
)
    
956
      
(787
)
Total earnings
  
$
246,206
    
$
322,053
    
$
(54,251
)
  
$
1,053,895
    
$
181,671
  
                                         
Fixed charges:
                                        
Interest expensed and capitalized (a)
  
$
33,740
    
$
35,380
    
$
33,673
    
$
36,586
    
$
36,066
  
Portion of rent expense representative of interest (b)
    
27,033
      
28,967
      
34,200
      
35,167
      
39,500
  
Total fixed charges
  
$
60,773
    
$
64,347
    
$
67,873
    
$
71,753
    
$
75,566
  
                                         
Ratio of earnings to fixed charges
    
4.1
      
5.0
      
*
      
14.7
      
2.4
  
                                         

*
The ratio coverage in 2015 was less than 1:1. The Company would have needed to generate additional earnings of $122,124 thousand to achieve a coverage of 1:1 in 2015.

(a)
Interest expense includes amortization of debt discount and other debt costs. Interest expense does not include interest related to liabilities for uncertain tax positions of $427 thousand for 2017; $398 thousand for 2016; and $284 thousand for 2015.
(b)
Rent expense included in the computation consists of one-third of total Company rental expense, which the Company believes is a reasonable estimate of an interest factor in the Company’s leases.