EX-12.1 2 dfsex1218312012.htm STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS DFS Ex. 12.1 8.31.2012





Exhibit 12.1
DISCOVER FINANCIAL SERVICES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)

 
 
For the Nine Months Ended
 
For the Years Ended November 30,
 
 
August 31, 2012
 
August 31, 2011
 
2011
 
2010
 
2009
 
2008
 
2007
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income tax expense
 
2,893,127

 
2,693,543

 
3,511,244

 
1,268,859

 
2,120,898

 
1,657,605

 
1,525,714

Losses from unconsolidated investees
 
8,061

 
3,493

 
5,301

 
4,143

 
3,396

 
3,946

 
4,279

Total earnings
 
2,901,188

 
2,697,036

 
3,516,545

 
1,273,002

 
2,124,294

 
1,661,551

 
1,529,993

Fixed charges:(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest expense
 
1,019,109

 
1,124,760

 
1,484,552

 
1,582,988

 
1,251,285

 
1,288,004

 
1,223,271

Interest factor in rents
 
4,417

 
4,014

 
5,387

 
4,740

 
4,383

 
4,777

 
3,489

Total fixed charges
 
1,023,526

 
1,128,774

 
1,489,939

 
1,587,728

 
1,255,668

 
1,292,781

 
1,226,760

Combined fixed charges and preferred stock requirements:(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest expense
 
1,019,109

 
1,124,760

 
1,484,552

 
1,582,988

 
1,251,285

 
1,288,004

 
1,223,271

Interest factor in rents
 
4,417

 
4,014

 
5,387

 
4,740

 
4,383

 
4,777

 
3,489

Preferred stock requirements
 
—

 
—

 
—

 
39,488

 
72,890

 
—

 
—

Total combined fixed charges and preferred stock requirements
 
1,023,526

 
1,128,774

 
1,489,939

 
1,627,216

 
1,328,558

 
1,292,781

 
1,226,760

Earnings from continuing operations before income tax expense and fixed charges
 
3,924,714

 
3,825,810

 
5,006,484

 
2,860,730

 
3,379,962

 
2,954,332

 
2,756,753

Earnings from continuing operations before income tax expense and combined fixed charges and preference dividends
 
3,924,714

 
3,825,810

 
5,006,484

 
2,900,218

 
3,452,852

 
2,954,332

 
2,756,753

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
 
3.8

 
3.4

 
3.4

 
1.8

 
2.7

 
2.3

 
2.2

Ratio of earnings to combined fixed charges and preference dividends
 
3.8

 
3.4

 
3.4

 
1.8

 
2.6

 
2.3

 
2.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Fixed charges are the sum of interest expensed, amortized premiums, discounts and capitalized expenses related to indebtedness, an estimate of interest within rental expense. Combined fixed charges and preferred stock requirements are the sum of interest expense, amortized premiums, discounts and capitalized expenses related to indebtedness and preference security dividend requirements.