EXHIBIT (12)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Sprint Corporation
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1998 1997 1996 1995 1994
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(in millions)
Earnings
Income before income
taxes and
extraordinary items... $ 842.4 $1,583.0 $1,911.9 $1,480.4 $1,387.9
Capitalized interest... (167.1) (93.0) (104.0) (57.0) (7.5)
Equity in losses of
less than 50% owned
entities.............. 92.5 768.4 269.0 32.9 --
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Subtotal................ 767.8 2,258.4 2,076.9 1,456.3 1,380.4
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Fixed charges
Interest charges....... 895.3 280.2 300.7 317.7 308.2
Interest factor of
operating rents....... 274.4 134.5 120.1 119.4 110.4
Pre-tax cost of
preferred stock
dividends of
subsidiaries.......... 0.4 0.3 0.4 0.7 0.9
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Total fixed charges..... 1,170.1 415.0 421.2 437.8 419.5
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Earnings, as adjusted... $1,937.9 $2,673.4 $2,498.1 $1,894.1 $1,799.9
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Ratio of earnings to
fixed charges.......... 1.66(/1/) 6.44(/2/) 5.93(/3/) 4.33(/4/) 4.29
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(/1/Earnings)as computed for the ratio of earnings to fixed charges includes
nonrecurring net gains of $104 million mainly relating to sales of local
exchanges and a nonrecurring 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 1.72 for 1998.
(/2/Earnings)as computed for the ratio of earnings to fixed charges includes
nonrecurring items. These items include a litigation charge of $20 million,
gains on the sales of local exchanges of $45 million and a gain on the sale
of an equity investment in an equipment provider of $26 million. Excluding
these items, the ratio of earnings to fixed charges would have been 6.32
for 1997.
(/3/Earnings)as computed for the ratio of earnings to fixed charges includes
the nonrecurring charge related to litigation of $60 million recorded in
1996. Excluding this charge, the ratio of earnings to fixed charges would
have been 6.07 for 1996.
(/4/Earnings)as computed for the ratio of earnings to fixed charges includes
the nonrecurring restructuring charge of $88 million recorded in 1995.
Excluding this charge, the ratio of earnings to fixed charges would have
been 4.53 for 1995.
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 (a) interest on all debt of continuing operations
(including amortization of debt issuance costs), (b) the interest component
of operating rents, and (c) the pre-tax cost of subsidiary preferred stock
dividends.