AT&T (T) 10-Q 2006 Q3 Quarterly report

EXHIBIT 12

AT&T INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Dollars in Millions
	Nine Months Ended
		September 30,				Year Ended December 31,
			2006		2005		2005	2004		2003		2002		2001
Income Before Income Taxes, Extraordinary Items
and Cumulative Effect of Accounting Changes*		$	6,728	$	4,344	$	5,267	6,623	$	7,751	$	8,685	$	9,984
Add:    Interest Expense			1,378		1,051		1,456	1,023		1,191		1,382		1,599
Dividends on Preferred Securities			2		26		31	24		22		24		57
1/3 Rental Expense			215		116		157	160		140		195		266
Adjusted Earnings		$	8,323	$	5,537	$	6,911	7,830	$	9,104	$	10,286	$	11,906
Total Interest Charges		$	1,430	$	1,075	$	1,492	1,054	$	1,228	$	1,440	$	1,718
Dividends on Preferred Securities			2		26		31	24		22		24		57
1/3 Rental Expense			215		116		157	160		140		195		266
Adjusted Fixed Charges		$	1,647	$	1,217	$	1,680	1,238	$	1,390	$	1,659	$	2,041
Ratio of Earnings to Fixed Charges			5.05		4.55		4.11	6.32		6.55		6.20		5.83

*All periods presented exclude undistributed earnings on investments accounted for under the equity method as well as “Income From Discontinued Operations, net of tax” in our Consolidated Statements of Income, which was from the sale of our interest in the directory advertising business in Illinois and northwest Indiana.