EXHIBIT 12
Computation of Ratio of Earnings to Fixed Charges
Verizon Communications Inc. and Subsidiaries
(dollars in millions) | ||||||||||||||||||||
Years Ended December 31, | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
Earnings: | ||||||||||||||||||||
Income before provision for income taxes, | $ | 12,684 | $ | 13,520 | $ | 1,643 | $ | 16,783 | $ | 15,956 | ||||||||||
Equity in earnings of unconsolidated businesses | (508 | ) | (553 | ) | (567 | ) | (585 | ) | (773) | |||||||||||
Dividends from unconsolidated businesses | 510 | 942 | 779 | 2,571 | 42 | |||||||||||||||
Interest expense(1) | 2,523 | 3,102 | 1,819 | 1,829 | 2,349 | |||||||||||||||
Portion of rent expense representing interest | 837 | 839 | 734 | 684 | 650 | |||||||||||||||
Amortization of capitalized interest | 139 | 134 | 125 | 115 | 112 | |||||||||||||||
Earnings, as adjusted | $ | 16,185 | $ | 17,984 | $ | 4,533 | $ | 21,397 | $ | 18,336 | ||||||||||
Fixed Charges: | ||||||||||||||||||||
Interest expense(1) | $ | 2,523 | $ | 3,102 | $ | 1,819 | $ | 1,829 | $ | 2,349 | ||||||||||
Portion of rent expense representing interest | 837 | 839 | 734 | 684 | 650 | |||||||||||||||
Capitalized interest | 964 | 927 | 747 | 429 | 462 | |||||||||||||||
Preferred stock dividend requirement (2) | – | – | – | – | 2 | |||||||||||||||
Fixed Charges | $ | 4,324 | $ | 4,868 | $ | 3,300 | $ | 2,942 | $ | 3,463 | ||||||||||
Ratio of earnings to fixed charges | 3.74 | 3.69 | 1.37 | 7.27 | 5.29 | |||||||||||||||
(1) | 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 $0.1 billion Verizon International Holding Ltd. Series A variable term voting cumulative preferred stock and paid holders the last dividend on that stock. |