EX-12 3 dex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 Computation of Ratio of Earnings to Fixed Charges Verizon Communications Inc. and Subsidiaries
(dollars in millions) Years Ended December 31, 2001 2000 1999 1998 1997 ------------------------------------------------------------------------------------------------------------------------------------ Income before provision for income taxes, extraordinary items, and cumulative effect of accounting change $ 2,766 $ 17,819 $ 13,168 $ 8,801 $ 8,306 Minority interest 622 216 79 182 164 Equity in (income) loss from unconsolidated businesses (1) (727) (3,792) (511) 216 (48) Dividends from unconsolidated businesses 244 215 336 353 304 Interest expense 3,369 3,502 2,638 2,746 2,510 Portion of rent expense representing interest 427 351 336 340 324 Amortization of capitalized interest 70 52 33 25 19 ---------------------------------------------------------------- Income, as adjusted $ 6,771 $ 18,363 $ 16,079 $ 12,663 $ 11,579 ================================================================ Fixed charges: Interest expense, including interest related to lease financing activities $ 3,369 $ 3,502 $ 2,638 $ 2,746 $ 2,510 Portion of rent expense representing interest 427 351 336 340 324 Capitalized interest 368 230 146 117 129 Priority distributions - - - - 19 Preferred stock dividend requirement 36 26 106 119 116 ---------------------------------------------------------------- Fixed Charges $ 4,200 $ 4,109 $ 3,226 $ 3,322 $ 3,098 ================================================================ Ratio of Earnings to Fixed Charges 1.61 4.47 4.98 3.81 3.74 ================================================================
(1) Current year excludes the write-down of cost method investments of $5,769 million, which reduces income before provision for income taxes, extraordinary items and cumulative effect of changes in accounting principles. The ratio of earnings to fixed charges would have been 2.99 if income also excludes the write-down of cost method investments.