YOUNG & RUBICAM INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratios of earnings to fixed charges of Young &
Rubicam Inc. for the periods indicated.
<TABLE>
Quarter Ended
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March 31, Year Ended December 31,
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2000 1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income (loss) before income taxes $51,911 $278,220 $(86,997) $36,304 $(250,617) $7,905
Dividends from unconsolidated companies 176 3,714 3,467 2,728 2,691 2,101
Interest expense 5,571 24,069 26,001 42,879 28,584 27,441
Interest component of rent expense 7,642 28,367 25,167 24,800 20,967 20,790
----- ------- ------- ------- ------- ----------
Total earnings (deficiency) 65,300 334,370 (32,362) 106,711 (198,375) 58,237
====== ======= ======== ======= ========= ======
Fixed charges:
Interest expense 5,571 24,069 26,001 42,879 28,584 27,441
Interest component of rent expense 7,642 28,367 25,167 24,800 20,967 20,790
----- ------ ------ ------ ------ ------
Total fixed charges 13,213 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, in
thousands) (a) (b) (c) 4.94x 6.38x $(83,530) 1.58x $(247,926) 1.21x
==== ===== ========= ===== ========== =========
</TABLE>
(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 (i) income (loss) before income taxes, (ii) dividends from unconsolidated
companies, and (iii) 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 the income recorded in the first quarter of
2000, in connection with (i) the gain on the sale of certain assets and rights
known as Y&R Teamspace to eMotion Inc., (ii) gains on the sale of certain
marketable securities and (iii) additional consideration received in the first
quarter of 2000 as a result of achieving revenue and operating profit
performance targets of the Brand Dialogue assets contributed to Luminant
Worldwide Corporation in 1999, totaling $10.8 million, the ratio of earnings to
fixed charges would have been 4.13x for the quarter ended March 31, 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.
