EX-12 3 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,    2009     2008     2007     2006     2005  

Earnings:

           

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

    $ 11,568      $ 15,914      $ 14,545      $ 12,192      $ 11,449   

Equity in earnings of unconsolidated businesses

      (553 )      (567 )      (585 )      (773 )      (686 ) 

Dividends from unconsolidated businesses

      942        779        2,571        42        2,335   

Interest expense (1)

      3,102        1,819        1,829        2,349        2,129   

Portion of rent expense representing interest

      839        734        684        650        511   

Amortization of capitalized interest

      134        125        115        112        108   
        

Earnings, as adjusted

    $   16,032      $   18,804      $   19,159      $   14,572      $   15,846   
        

Fixed Charges:

           

Interest expense (1)

    $ 3,102      $ 1,819      $ 1,829      $ 2,349      $ 2,129   

Portion of rent expense representing interest

      839        734        684        650        511   

Capitalized interest

      927        747        429        462        352   

Preferred stock dividend requirement (2)

      –        –        –        2        9   
        

Fixed Charges

    $ 4,868      $ 3,300      $ 2,942      $ 3,463      $ 3,001   
        

Ratio of earnings to fixed charges

      3.29        5.70        6.51        4.21        5.28   
        

 

(1)

On January 1, 2007, Verizon adopted the accounting standard relating to the accounting for uncertainty in income taxes (see Notes 1 and 13 of the Consolidated Financial Statements in this annual report on Form 10-K). As permitted, we classify interest expense recognized on uncertain tax positions as income tax expense and therefore such interest expense is not included in 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.