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EXHIBIT
12
 NORTEL NETWORKS LIMITED
Computation of Ratio of Earnings from Operations to Fixed Charges
 Three
    
    
    Nine
    
    
    Years ended December 31,(millions of U.S. Dollars)
    
    Months Ended
    
    
    Months Ended
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002September 30, 2007
    
    
    September 30, 2007
    
    
    
    
    
    As restated
    
    
    As restated
    
    
    As restated
    
    
    As restatedEarnings (loss) from operations before income taxes
    
    
    138
    
    
    
    99
    
    
    
    19
    
    
    
    (129
    )
    
    
    (174
    )
    
    
    241
    
    
    
    (2,673
    )Add:Minority interest
    
    
    33
    
    
    
    46
    
    
    
    21
    
    
    
    12
    
    
    
    11
    
    
    
    24
    
    
    
    (32
    )Equity in net earnings (loss) of associated companies
    
    
    (1
    )
    
    
    (2
    )
    
    
    2
    
    
    
    (3
    )
    
    
    0
    
    
    
    36
    
    
    
    17Earnings (loss) from operations
before minority interest, equity in net loss of
associated companies and income taxes
    
    
    170
    
    
    
    143
    
    
    
    42
    
    
    
    (120
    )
    
    
    (163
    )
    
    
    301
    
    
    
    (2,688
    )Add:Fixed charges
    
    
    95
    
    
    
    262
    
    
    
    276
    
    
    
    191
    
    
    
    181
    
    
    
    212
    
    
    
    346Amortization of capitalized interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Pre-tax losses of equity investees for which charges
arising from guarantees are included in fixed charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distributed income from equity investees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Subtract:Interest capitalized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Preference security dividend requirements
of consolidated subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest in pre-tax of subsidiaries
that have not incurred fixed charges
    
    
    33
    
    
    
    46
    
    
    
    21
    
    
    
    12
    
    
    
    11
    
    
    
    24
    
    
    
    (32
    )Income (loss) as adjusted
    
    
    232
    
    
    
    359
    
    
    
    297
    
    
    
    59
    
    
    
    7
    
    
    
    487
    
    
    
    (2,308
    )Fixed charges:Interest expense- Long-term debt
    
    
    70
    
    
    
    198
    
    
    
    187
    
    
    
    124
    
    
    
    108
    
    
    
    95
    
    
    
    135- Other
    
    
    8
    
    
    
    19
    
    
    
    22
    
    
    
    6
    
    
    
    8
    
    
    
    26
    
    
    
    551/3 of rental expense on operating leases
deemed to be representative of interest
expense
    
    
    13
    
    
    
    37
    
    
    
    65
    
    
    
    58
    
    
    
    59
    
    
    
    86
    
    
    
    155Preference security dividend requirements of
consolidated subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortized premiums, discounts and
capitalized expenses related to
indebtedness
    
    
    4
    
    
    
    9
    
    
    
    2
    
    
    
    3
    
    
    
    6
    
    
    
    5
    
    
    
    195
    
    
    
    263
    
    
    
    276
    
    
    
    191
    
    
    
    181
    
    
    
    212
    
    
    
    346Ratio of earnings from operations
to fixed charges
    
    
    2.4
    
    
    
    1.4
    
    
    
    0.9
    
    
    
    *
    
    
    
    *
    
    
    
    2.3
    
    
    
    *
  *
    
    The earnings of Nortel Networks Limited were inadequate to
cover fixed charges for years ended December 31, 2005, 2004 and
2002, by $132, $174 and $2,654, respectively.