EXHIBIT 12
Computation of Ratio of Earnings to Fixed Charges
Verizon Communications Inc. and Subsidiaries
| (dollars in millions) | ||||||||||||||||||||
| Years Ended December 31, | 2002 | 2001 | 2000 | 1999 | 1998 | |||||||||||||||
Income before provision for income taxes,
extraordinary items, and cumulative effect of accounting change |
$ | 6,202 | $ | 2,766 | $ | 17,819 | $ | 13,168 | $ | 8,801 | ||||||||||
Minority interest |
1,270 | 622 | 216 | 79 | 182 | |||||||||||||||
(Income) loss from unconsolidated
businesses(1) |
1,306 | (727 | ) | (3,792 | ) | (511 | ) | 216 | ||||||||||||
Dividends from unconsolidated businesses |
182 | 244 | 215 | 336 | 353 | |||||||||||||||
Interest expense |
3,237 | 3,369 | 3,502 | 2,638 | 2,746 | |||||||||||||||
Portion of rent expense representing interest |
435 | 427 | 351 | 336 | 340 | |||||||||||||||
Amortization of capitalized interest |
87 | 70 | 52 | 33 | 25 | |||||||||||||||
Income, as adjusted |
$ | 12,719 | $ | 6,771 | $ | 18,363 | $ | 16,079 | $ | 12,663 | ||||||||||
Fixed charges: |
||||||||||||||||||||
Interest expense, including interest related
to lease financing activities |
$ | 3,237 | $ | 3,369 | $ | 3,502 | $ | 2,638 | $ | 2,746 | ||||||||||
Portion of rent expense representing interest |
435 | 427 | 351 | 336 | 340 | |||||||||||||||
Capitalized interest |
185 | 368 | 230 | 146 | 117 | |||||||||||||||
Preferred stock dividend requirement |
10 | 36 | 26 | 106 | 119 | |||||||||||||||
Fixed Charges |
$ | 3,867 | $ | 4,200 | $ | 4,109 | $ | 3,226 | $ | 3,322 | ||||||||||
Ratio of Earnings to Fixed Charges |
3.29 | 1.61 | 4.47 | 4.98 | 3.81 | |||||||||||||||
| (1) | Excludes net losses related to cost method investments of $3,108 million and $5,769 million for the years ended December 31, 2002 and 2001, respectively, which reduce income before provision for income taxes, extraordinary items and cumulative effect of accounting change. |