EXHIBIT 12
MICHIGAN BELL TELEPHONE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
(Dollars in Millions)
Nine Months Ended
September 30
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1997 1996
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1. EARNINGS
a) Income before interest expense,
income taxes and undistributed
equity earnings .................... $ 785.5 $ 738.2
b) Single Business Tax (2)................. 24.3 24.0
c) Portion of rental expense
representative of the
interest factor (1)(2).............. 9.1 9.3
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Total 1(a) through 1(c)................. $ 818.9 $ 771.5
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2. FIXED CHARGES
a) Total interest expense including
capital lease obligations .......... $ 62.2 $ 63.3
b) Capitalized interest................ 1.0 1.5
c) Portion of rental expense
representative of the
interest factor (1)................. 9.1 9.3
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Total 2(a) through 2(c)................. $ 72.3 $ 74.1
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3. RATIO OF EARNINGS TO FIXED CHARGES....... 11.33 10.41
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(1) We consider one third of total rental expense to represent return on
capital.
(2) Earnings represent income before income taxes and fixed charges.
Since we have already deducted the Single Business Tax (the Tax)
and rental expense in our calculation of income before tax (item
1a), the Tax and the one-third portion of rental expense
considered to be fixed charges are added back to arrive at total
earnings.