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EXHIBIT 12

NORTEL NETWORKS LIMITEDComputation of Ratio of Earnings from Continuing Operations to Fixed Charges

Years ended December 31,(millions of U.S. dollars)
    
    2002
    
    
    2001
    
    
    2000
    
    
    1999 (1)
    
    
    1998 (1)As restated*
    
    As restated*
    
    As restated*Earnings (loss) from continuing operations before income taxes
as reported in the consolidated statements of operations
    
    
    (3,167.0
    )
    
    
    (14,403.0
    )
    
    
    373.0
    
    
    
    346.0
    
    
    
    (73.0
    )Add:Minority interest
    
    
    (1.0
    )
    
    
    (5.0
    )
    
    
    54.0
    
    
    
    (1.0
    )
    
    
    (15.0
    )Equity in net loss of associated companies
    
    
    18.0
    
    
    
    150.0
    
    
    
    18.0
    
    
    
    (41.0
    )
    
    
    64.0Earnings (loss) from continuing operations before minority
interest, equity in net loss of associated companies and
income taxes
    
    
    (3,150.0
    )
    
    
    (14,258.0
    )
    
    
    445.0
    
    
    
    304.0
    
    
    
    (24.0
    )Add:Fixed charges
    
    
    338.0
    
    
    
    552.0
    
    
    
    395.0
    
    
    
    350.0
    
    
    
    366.0Amortization of capitalized interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense of finance subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unconsolidated subs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distributed income from equity investees
    
    
    19.0
    
    
    
    1.0
    
    
    
    4.0
    
    
    
    
    
    
    
    Subtract:Interest capitalized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Preference security dividend requirements of consolidated
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest in pre-tax income of subsidiaries without
fixed charges
    
    
    1.0
    
    
    
    5.0
    
    
    
    (54.0
    )
    
    
    1.0
    
    
    
    15.0Income (loss) as adjusted
    
    
    (2,792.0
    )
    
    
    (13,700.0
    )
    
    
    790.0
    
    
    
    655.0
    
    
    
    357.0Fixed charges:Interest expense long-term debt
    
    
    130.0
    
    
    
    173.0
    
    
    
    86.0
    
    
    
    93.0
    
    
    
    107.0 other
    
    
    44.0
    
    
    
    120.0
    
    
    
    83.0
    
    
    
    71.0
    
    
    
    115.0Interest expense of
finance subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unconsolidated Subs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1/3 of rental expense on operating leases
deemed to be interest expense
    
    
    155.0
    
    
    
    249.0
    
    
    
    225.0
    
    
    
    185.0
    
    
    
    143.0Amortized premiums, discounts and
capitalized expenses related to indebtedness
    
    
    9.0
    
    
    
    10.0
    
    
    
    1.0
    
    
    
    1.0
    
    
    
    1.0338.0
    
    
    
    552.0
    
    
    
    395.0
    
    
    
    350.0
    
    
    
    366.0Ratio of earnings from continuing operations
to fixed charges
    
    
    *
    *
    
    
    *
    *
    
    
    2.0
    
    
    
    1.9
    
    
    
    *
    *


|*   |  | See note 3 to the
accompanying consolidated financial statements.                                                                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**  |  | The earnings of Nortel Networks Limited were inadequate to cover fixed charges for the years ended
December 31, 2002, 2001, and 1998 by $3,130, $14,252 and $9, respectively.                                                                                              
|(1) |  | The information for 1999 and 1998
earnings have not been restated for the effect of the restatement adjustments as indicated in note 3 to the accompanying consolidated
financial statements as the impact was not significant to the
financial statements for those years.