EX-12 5 dex12.htm EXHIBIT 12 Exhibit 12

Exhibit 12

SPRINT NEXTEL CORPORATION

EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

 

     2007     2006     2005     2004     2003  
     (in millions)  

Earnings

           

Income (loss) from continuing operations before income taxes

    $ (29,945 )   $ 1,483     $ 1,291     $ (3,244 )   $ (2,149 )

Capitalized interest

      (127 )     (113 )     (53 )     (56 )     (58 )

Amortization of capitalized interest

      72       107       98       86       70  

Net losses (earnings) in equity method investees

      3       6       (107 )     41       79  
                                        

Subtotal

      (29,997 )     1,483       1,229       (3,173 )     (2,058 )
                                        

Fixed charges

           

Interest charges

      1,560       1,646       1,347       1,274       1,414  

Interest factor of operating rents

      653       596       395       347       360  
                                        

Total fixed charges

      2,213       2,242       1,742       1,621       1,774  
                                        

Earnings (loss), as adjusted

    $ (27,784 )   $ 3,725     $ 2,971     $ (1,552 )   $ (284 )
                                        

Preferred stock dividends paid

    $ —       $ 3     $ 11     $ 11     $ 11  

Total fixed charges

      2,213       2,242       1,742       1,621       1,774  
                                        

Total fixed charges and preferred stock dividends

    $ 2,213     $ 2,245     $ 1,753     $ 1,632     $ 1,785  
                                        

Ratio of earnings to combined fixed charges and preferred stock dividends

      —   (1)     1.66       1.69       —   (2)     —   (3)
                                        

 

(1) Earnings, as adjusted, were inadequate to cover fixed charges by $30.0 billion in 2007.

 

(2) Earnings, as adjusted, were inadequate to cover fixed charges and preferred stock dividends by $3.2 billion in 2004.

 

(3) Earnings, as adjusted, were inadequate to cover fixed charges and preferred stock dividends by $2.1 billion in 2003.

 

Note: The ratios of earnings to combined fixed charges and preferred stock dividends were computed by dividing fixed charges and pre-tax earnings required to cover preferred stock dividends into the sum of earnings (after certain adjustments) and fixed charges. Fixed charges include interest on all debt of continuing operations, including amortization of debt issuance costs, and the interest component of operating rents. Pre-tax earnings required to cover preferred stock dividends are calculated by dividing one less our effective income tax rate into preferred stock dividends, as adjusted for the tax benefits related to unallocated shares. Earnings include income from continuing operations before income taxes, plus net losses (earnings) in equity method investees, less capitalized interest.