EXHIBIT 12
PACIFIC BELL AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Dollars in Millions
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- -----------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------------- -----------------------------------------
Income (Loss) Before Income Taxes,
Extraordinary Loss and Cumulative
Effect of Accounting Changes $ 941 $ (479) $ 34 $1,567 $1,161 $1,276 $ (54)
Add: Interest Expense 216 226 460 379 420 437 429
1/3 Rental Expense 19 29 41 47 29 22 23
------- ------- ------ ------ ------- ------- -------
Adjusted Earnings $1,176 $ (224) 535 $1,993 $1,610 $1,735 $ 398
======= ======= ====== ====== ======= ======= =======
Total Interest Charges $ 233 $ 246 497 412 $ 420 $ 437 $ 429
1/3 Rental Expense 19 29 41 47 29 22 23
------- ------- ------ ------ ------- ------- -------
Adjusted Fixed Charges $ 252 $ 275 $ 538 $ 459 $ 449 $ 459 $ 452
======= ======= ====== ====== ======= ======= =======
Ratio of Earnings to Fixed Charges 4.67 (0.81)* 0.99** 4.34 3.59 3.78 0.88***
<FN>
* As defined within the computation of earnings to fixed charges, earnings
are $499 less than fixed charges for the first six months of 1997. See
Management's Discussion and Analysis of Results of Operations in Pacific
Bell's 1997 Annual Report on Form 10-K for a discussion of merger-related
and other unusual items that reduced earnings for 1997.
** As defined within the computation of earnings to fixed charges, earnings
are $3 less than fixed charges for 1997. See Management's Discussion and
Analysis of Results of Operations in Pacific Bell's 1997 Annual Report on
Form 10-K for a discussion of merger-related and other unusual items that
reduced earnings for 1997.
*** As defined within the computation of earnings to fixed charges, earnings
are $54 less than fixed charges for 1993. See Management's Discussion and
Analysis of Results of Operations - Other Business Matters in Pacific
Bell's 1997 Annual Report on Form 10-K for a discussion of the
restructuring charge which reduced earnings for 1993.
</FN>