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EXHIBIT 12.1
NORTEL NETWORKS LIMITED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (U.S. GAAP)
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YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED
USD IN MILLIONS SEPT. 30, '2000 1999 1998 1997 1996 1995
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Consolidated pretax earnings(losses) from continuing
operations before adjustments for minority interests
in consolidated subsidiaries or income or loss from
equity investees (288.0) 158.0 (781.0) 1,173.0 852.0 568.1
ADD
Fixed Charges 278.1 351.0 366.5 250.6 248.2 220.2
Amortization of capitalized interest - - - - - -
Distributed income of equity investees - - - - - -
NNL's share of pre-tax losses of equity investees
for which charges arising from guarantees are
included in fixed charges - - - - - -
LESS
Interest capitalized - - - - - -
Preference security dividend requirements of
consolidated subsidiaries - - - - - -
The minority interest in pre-tax income of
subsidiaries that have not incurred
fixed charges 8.9 2.7 10.6 (0.7) - -
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EARNINGS (LOSS) AS ADJUSTED (1.0) 511.7 (403.9) 1,422.9 1,100.2 788.3
FIXED CHARGES
Interest expensed and capitalized 117.0 164.0 222.0 161.6 167.4 152.9
Amortized premiums, discounts and capitalized
expenses related to indebtedness 0.7 1.0 1.0 1.1 1.5 1.6
Estimate of the interest within rental
expense (1/3 of rental expense
on operating leases deemed to be
interest expense) 160.3 186.0 143.5 87.9 79.3 65.7
Preference security dividend requirements of
consolidated subsidiaries - - - - - -
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TOTAL FIXED CHARGES 278.1 351.0 366.5 250.6 248.2 220.2
RATIO OF EARNINGS TO FIXED CHARGES - (1) 1.45 - (2) 5.68 4.43 3.58
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(1) Earnings calculated in accordance with U.S. GAAP were inadequate to cover
fixed charges for the nine months ended September 30, 2000 by approximately
$279 million
(2) Earnings calculated in accordance with U.S. GAAP were inadequate to cover
fixed charges for the year ended December 31, 1998 by approximately $770
million
