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Exhibit 12
 NORTEL NETWORKS LIMITED
Computation of Ratio of Earnings from Continuing Operations to Fixed Charges
 Years ended December 31,(millions of U.S. dollars)
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002As restated
    
    
    As restated
    
    
    As restated
    
    
    As restated
    
    
    As restatedEarnings (loss) from continuing operations before income taxes as reported in the consolidated
statements of operations
    
    
    19
    
    
    
    (129
    )
    
    
    (174
    )
    
    
    241
    
    
    
    (2,673
    )Add:Minority interest
    
    
    21
    
    
    
    12
    
    
    
    11
    
    
    
    24
    
    
    
    (32
    )Equity in net loss of associated companies
    
    
    2
    
    
    
    (3
    )
    
    
    
    
    
    
    36
    
    
    
    17Earnings (loss) from continuing operations before minority interest, equity in net loss of
associated companies and income taxes
    
    
    42
    
    
    
    (120
    )
    
    
    (163
    )
    
    
    301
    
    
    
    (2,688
    )Add:Fixed charges
    
    
    276
    
    
    
    191
    
    
    
    181
    
    
    
    212
    
    
    
    350Amortization 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 without fixed charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest in pre-tax of subsidiaries without fixed charges
    
    
    (21
    )
    
    
    (12
    )
    
    
    (11
    )
    
    
    (24
    )
    
    
    32Income (loss) as adjusted
    
    
    297
    
    
    
    59
    
    
    
    7
    
    
    
    487
    
    
    
    (2,304
    )Fixed charges:Interest expense- Long-term debt
    
    
    187
    
    
    
    124
    
    
    
    108
    
    
    
    95
    
    
    
    135 Other
    
    
    22
    
    
    
    6
    
    
    
    8
    
    
    
    26
    
    
    
    55Interest expense of finance subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense of unconsolidated subs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1/3 of rental expense on operating leases deemed to be representative of interest expense
    
    
    65
    
    
    
    58
    
    
    
    59
    
    
    
    86
    
    
    
    155Preference security dividend requirements of consolidated subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortized premiums, discounts and capitalized expenses related to indebtedness
    
    
    2
    
    
    
    3
    
    
    
    6
    
    
    
    5
    
    
    
    1276
    
    
    
    191
    
    
    
    181
    
    
    
    212
    
    
    
    346Ratio of earnings from continuing operations to fixed charges
    
    
    1.1
    
    
    
    *
    
    
    
    *
    
    
    
    2.3
    
    
    
    *
 *
    
    The earnings of Nortel Networks Limited were inadequate to cover fixed charges for the years ended December 31, 2005, 2004 and 2002 by $132, $174 and $2,650 respectively.