Income before provision for income taxes, discontinued operations, extraordinary item and cumulative effect of accounting change

Equity in earnings of unconsolidated businesses

Dividends from unconsolidated businesses

Interest expense ⁽¹⁾

Portion of rent expense representing interest

Amortization of capitalized interest

Income, as adjusted

Fixed charges:

Interest expense ⁽¹⁾

Portion of rent expense representing interest

Capitalized interest

Preferred stock dividend requirement ⁽²⁾

Fixed Charges

Ratio of Earnings to Fixed Charges

On January 1, 2007, Verizon adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (see Notes 1 and 16 of the Consolidated Financial Statements in this annual report on Form 10-K). Our policy is to classify interest expense recognized on uncertain tax positions as income tax expense. We have excluded interest expense recognized on uncertain tax positions from the Ratio of Earnings to Fixed Charges.

On January 15, 2006, Verizon redeemed $100 million Verizon International Holding Ltd. Series A variable term voting cumulative preferred stock and paid holders the last dividend on that stock.