EX-12 7 dex12.htm STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Statement Re: Computation of Ratio of Earnings to Fixed Charges

Exhibit 12

DISCOVER FINANCIAL SERVICES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

 

     For the Years Ended November 30,  
      2010      2009      2008      2007      2006  
     (dollars in millions)  

Earnings:

               

Income from continuing operations before income tax expense

    $ 1,268,859       $ 2,120,898       $ 1,657,605       $ 1,525,714       $ 1,667,753   

Losses from unconsolidated investees

      4,143         3,396         3,946         4,279         2,968   
                                            

Total earnings

      1,273,002         2,124,294         1,661,551         1,529,993         1,670,721   

Fixed Charges(1):

               

Total interest expense

      1,582,988         1,251,285         1,288,004         1,223,271         836,279   

Interest factor in rents

      4,740         4,383         4,777         3,489         2,947   

Preferred stock requirements

      39,488         72,890         0         0         0   
                                            

Total fixed charges

      1,627,216         1,328,558         1,292,781         1,226,760         839,226   

Earnings from continuing operations before income tax expense and fixed charges

    $ 2,900,218       $ 3,452,852       $ 2,954,332       $ 2,756,753       $ 2,509,947   
                                            

Ratio of earnings to fixed charges

      1.8         2.6         2.3         2.2         3.0   
                                              

 

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