EXHIBIT (12)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Sprint Corporation
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2002 2001 2000 1999 1998
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(millions)
Earnings
Income (loss) from continuing operations before income taxes $ 429 $(2,274) $ (963) $(1,263) $ 856
Capitalized interest (118) (174) (175) (151) (167)
Equity in losses of less than 50% owned entities 119 175 256 80 42
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Subtotal 430 (2,273) (882) (1,334) 731
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Fixed charges
Interest charges 1,560 1,374 1,165 1,013 889
Interest factor of operating rents 422 396 347 308 272
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Total fixed charges 1,982 1,770 1,512 1,321 1,161
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Earnings, as adjusted $2,412 $ (503) $ 630 $ (13) $1,892
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Ratio of earnings to fixed charges 1.22/(1)/ --/(2)/ --/(3)/ --/(4)/ 1.63/(5)/
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/(1) /Earnings, as adjusted, include charges aggregating $559 million primarily
relating to the write-down of investments, restructuring and asset
impairments. Excluding these items, the ratio of earnings to fixed charges
would have been 1.50 for 2002.
/(2) /Earnings, as adjusted, were inadequate to cover fixed charges by $2.3
billion in 2001. Earnings, as adjusted, include charges aggregating $1,886
million primarily relating to restructuring and asset impairments.
Excluding these items, earnings, as adjusted, would have been inadequate
to cover fixed charges by $387 million.
/(3) /Earnings, as adjusted, were inadequate to cover fixed charges by $882
million in 2000. Earnings, as adjusted, include charges aggregating $493
million primarily relating to asset impairments, termination of the
WorldCom merger and a write-down of investments. Excluding these items,
earnings, as adjusted, would have been inadequate to cover fixed charges
by $389 million.
/(4) /Earnings, as adjusted, were inadequate to cover fixed charges by $1.3
billion in 1999. Earnings, as adjusted, include a net gain of $54 million
from investment activities. Excluding this gain, earnings, as adjusted,
would have been inadequate to cover fixed charges by $1.4 billion.
/(5) /Earnings, as adjusted, include net gains of $104 million mainly relating
to sales of local exchanges and a charge to write off $179 million of
acquired in-process research and development costs related to the PCS
Restructuring. Excluding these items, the ratio of earnings to fixed
charges would have been 1.70 for 1998.
Note: The ratios were computed by dividing fixed charges into the sum of
earnings (after certain adjustments) and fixed charges. Earnings include
income from continuing operations before taxes, plus equity in the net
losses of less-than-50% owned entities, less capitalized interest. Fixed
charges include interest on all debt of continuing operations, including
amortization of debt issuance costs, and the interest component of
operating rents.