EX-12.(B) 3 f17867exv12wxby.htm EXHIBIT 12.(B) exv12wxby
 

EXHIBIT 12(b)
WELLS FARGO & COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
                                         
   
    Year ended December 31 ,
(in millions)   2005     2004     2003     2002     2001  
 

Earnings, including interest on deposits (1):

                                       
Income before income tax expense and effect
of change in accounting principle
  $ 11,548     $ 10,769     $ 9,477     $ 8,854     $ 5,460  
Fixed charges
    7,656       4,017       3,606       4,155       6,893  
 
                             
 
  $ 19,204     $ 14,786     $ 13,083     $ 13,009     $ 12,353  
 
                             

Preferred dividend requirement

  $     $     $ 3     $ 4     $ 14  
Ratio of income before income tax expense and effect
of change in accounting principle to net income
before effect of change in accounting principle
    1.51       1.54       1.53       1.55       1.60  
 
                             

Preferred dividends (2)

  $     $     $ 5     $ 6     $ 22  
 
                             
Fixed charges (1):
                                       
Interest expense
    7,458       3,817       3,411       3,977       6,741  
Estimated interest component of net rental expense
    198       200       195       178       152  
 
                             
 
    7,656       4,017       3,606       4,155       6,893  
 
                             
Fixed charges and preferred dividends
  $ 7,656     $ 4,017     $ 3,611     $ 4,161     $ 6,915  
 
                             

Ratio of earnings to fixed charges and preferred dividends (3)

    2.51       3.68       3.62       3.13       1.79  
 
                             

Earnings excluding interest on deposits:

                                       
Income before income tax expense and effect
of change in accounting principle
  $ 11,548     $ 10,769     $ 9,477     $ 8,854     $ 5,460  
Fixed charges
    3,808       2,190       1,993       2,236       3,340  
 
                             
 
  $ 15,356     $ 12,959     $ 11,470     $ 11,090     $ 8,800  
 
                             

Preferred dividends (2)

  $     $     $ 5     $ 6     $ 22  
 
                             
Fixed charges:
                                       
Interest expense
    7,458       3,817       3,411       3,977       6,741  
Less interest on deposits
    3,848       1,827       1,613       1,919       3,553  
Estimated interest component of net rental expense
    198       200       195       178       152  
 
                             
 
    3,808       2,190       1,993       2,236       3,340  
 
                             
Fixed charges and preferred dividends
  $ 3,808     $ 2,190     $ 1,998     $ 2,242     $ 3,362  
 
                             

Ratio of earnings to fixed charges and preferred dividends (3)

    4.03       5.92       5.74       4.95       2.62  
 
                             
   
(1)   As defined in Item 503(d) of Regulation S-K.
 
(2)   The preferred dividends were increased to amounts representing the pretax earnings that would be required to cover such dividend requirements.
 
(3)   These computations are included herein in compliance with Securities and Exchange Commission regulations. However, management believes that fixed charge ratios are not meaningful measures for the business of the Company because of two factors. First, even if there was no change in net income, the ratios would decline with an increase in the proportion of income which is tax-exempt or, conversely, they would increase with a decrease in the proportion of income which is tax-exempt. Second, even if there was no change in net income, the ratios would decline if interest income and interest expense increase by the same amount due to an increase in the level of interest rates or, conversely, they would increase if interest income and interest expense decrease by the same amount due to a decrease in the level of interest rates.