EX-12 2 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 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,    2008     2007     2006     2005     2004  

Income before provision for income taxes, discontinued
operations, extraordinary item, and cumulative effect
of accounting change

    $ 9,759     $ 9,492     $ 8,154     $ 8,448     $ 7,977  

Minority interest

      6,155       5,053       4,038       3,001       2,329  

Equity in earnings of unconsolidated businesses

      (567 )     (585 )     (773 )     (686 )     (1,690 )

Dividends from unconsolidated businesses

      779       2,571       42       2,335       162  

Interest expense (1)

      1,819       1,829       2,349       2,129       2,336  

Portion of rent expense representing interest

      612       571       530       511       449  

Amortization of capitalized interest

      125       115       112       108       104  
        

Income, as adjusted

    $   18,682     $   19,046     $   14,452     $   15,846     $   11,667  
        

Fixed charges:

           

Interest expense (1)

    $ 1,819     $ 1,829     $ 2,349     $ 2,129     $ 2,336  

Portion of rent expense representing interest

      612       571       530       511       449  

Capitalized interest

      747       429       462       352       177  

Preferred stock dividend requirement (2)

     –       –       2       9       8  
        

Fixed Charges

    $ 3,178     $ 2,829     $ 3,343     $ 3,001     $ 2,970  
        

Ratio of Earnings to Fixed Charges

      5.88       6.73       4.32       5.28       3.93  
        

 

(1)

On January 1, 2007, Verizon adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (see Notes 1 and 16 of the Consolidated Financial Statements in this annual report on Form 10-K). Our policy is to classify interest expense recognized on uncertain tax positions as income tax expense. We have excluded interest expense recognized on uncertain tax positions from the Ratio of Earnings to Fixed Charges.

 

(2)

On January 15, 2006, Verizon redeemed $100 million Verizon International Holding Ltd. Series A variable term voting cumulative preferred stock and paid holders the last dividend on that stock.