EX-12 9 d90946ex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in millions)
SIX MONTHS YEAR ENDED DECEMBER 31, ENDED JUNE 30, ----------------------------------------------- ----------------- 1996 1997 1998 1999 2000 2000 2001(1) ------- ------- ------- ------- ------- ------- ------- Income before income taxes, extraordinary item and cumulative effect of change in accounting principle $ 2,377 $ 2,429 $ 2,419 $ 1,902 $ 126 $ 453 $(3,140) Interest expense (net of amounts capitalized) 448 405 543 736 1,041 418 681 Interest factor on rentals (1/3) 79 91 70 92 137 61 68 ------- ------- ------- ------- ------- ------- ------- Subtotal earnings 2,904 2,925 3,032 2,730 1,304 932 (2,391) Add: Losses from equity method affiliates -- -- -- -- 41 -- 3,097 ------- ------- ------- ------- ------- ------- ------- Total earnings $ 2,904 $ 2,925 $ 3,032 $ 2,730 $ 1,345 $ 932 $ 706 ------- ------- ------- ------- ------- ------- ------- Gross interest expense $ 479 $ 425 $ 568 $ 763 $ 1,145 $ 446 $ 788 Interest factor on rentals (1/3) 79 91 70 92 137 61 68 ------- ------- ------- ------- ------- ------- ------- Fixed charges $ 558 $ 516 $ 638 $ 855 $ 1,282 $ 507 $ 856 ------- ------- ------- ------- ------- ------- ------- Ratio of earnings to fixed charges or (coverage deficiency) 5.20 5.67 4.75 3.19 1.05 1.84 $ (150) ======= ======= ======= ======= ======= ======= =======
Note (1): For the six months ended June 30, 2001, the ratio of earnings to fixed charges was calculated as a negative ratio. As a result, disclosed above is the calculation of the coverage deficiency. For the purposes of this calculation we have included the impact of the $3.048 billion write-down of the investment in KPNQwest that occurred during the second quarter of 2001, as an add-back of Qwest's share of losses in its equity method affiliates.