Computation of Ratio of Earnings to Fixed Charges

EX-12.1 3 dex121.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Computation of Ratio of Earnings to Fixed Charges

Exhibit 12.1

Telecom Argentina STET-France Telecom S.A.

Computation of Ratio of Earnings to Fixed Charges/Deficiency

In the Coverage of Fixed Charges by Earnings Before Fixed Charges (in Argentine GAAP)

	As of and for fiscal year ended										As of and for the nine months ended
	September 1998		September 1999		December 2000		December 2001		December 2002		September 2002		September 2003
	(in millions of Argentine constant pesos, except for the ratio)
A—Earnings
Pretax income (loss)	1,250		1,143		599		216		(5,650	)	(6,130	)	790
Fixed charges	472		565		682		702		939		720		459
Amortization of capitalized interest	48		53		64		56		91		65		71
Distributed income from equity investments	0		0		0		0		0		0		0
Less:
Capitalized interest	(65	)	(104	)	(129	)	(103	)	(66	)	(66	)	(6	)

	1,705		1,657		1,216		871		(4,686	)	(5,411	)	1,314

B—Fixed charges
Interest expenses	374		438		515		560		846		633		441	(1)
Capitalized interest	65		104		129		103		66		66		6
Estimate of the interest within rental expense	33		23		38		39		27		21		12
Preference security dividend	0		0		0		0		0		0		0

	472		565		682		702		939		720		459

Ratio (A/B)	3.6		2.9		1.8		1.2		(5.0	)(2)	(7.5	)(2)	2.9
Deficiency									5,625		6,131

(1)	Includes P$49 million related to the repurchase of debt.

(2)

The ratios related to the year ended December 31, 2002 and to the nine-month period ended September 30, 2002 indicate less than one-to-one coverage. Consequently, earnings for these periods are inadequate to cover fixed charges. A total amount of earnings of P$5,625 million and P$6,131 million is required to attain a ratio of one-to-one determined under Argentine GAAP for the year ended December 31, 2002 and the nine-month period ended September 30, 2002, respectively.

Computation of Ratio of Earnings to Fixed Charges/Deficiency

In the Coverage of Fixed Charges by Earnings Before Fixed Charges (in U.S. GAAP)

	As of and for fiscal year ended										As of and for the nine months ended
	September 1998		September 1999		December 2000		December 2001		December 2002		September 2002		September 2003
	(in millions of Argentine constant pesos, except for the ratio)
A—Earnings
Pretax income (loss)	1,263		1,241		550		(3,307	)	(2,865	)	(3,284	)	936
Fixed charges	472		565		682		702		939		720		459
Amortization of capitalized interest	48		53		64		56		91		65		71
Distributed income from equity investments	0		0		0		0		0		0		0
Less:
Capitalized interest	(65	)	(104	)	(129	)	(103	)	(66	)	(66	)	(6	)

	1,718		1,755		1,167		(2,652	)	(1,901	)	(2,565	)	1,460

B—Fixed charges
Interest expenses	374		438		515		560		846		633		441	(1)
Capitalized interest	65		104		129		103		66		66		6
Estimate of the interest within rental expense	33		23		38		39		27		21		12
Preference security dividend	0		0		0		0		0		0		0

	472		565		682		702		939		720		459

Ratio (A/B)	3.6		3.1		1.7		(3.8	)(2)	(2.0	)(2)	(3.6	)(2)	3.2
Deficiency							3,354		2,840		3,285

(1)	Includes P$49 million related to the repurchase of debt.

(2)

The ratios related to the years ended December 31, 2002 and 2001 and to the nine-month period ended September 30, 2002 indicate less than one-to-one coverage. Consequently, earnings for these periods are inadequate to cover fixed charges. A total amount of earnings of P$2,840 million, P$3,354 million and P$3,285 million is required to attain a ratio of one-to-one determined under US GAAP for the years ended December 31, 2002 and 2001 and the nine-month period ended September 30, 2002, respectively.