EX-12.(B) 5 d529054dex12b.htm EX-12.(B) EX-12.(B)

EXHIBIT 12(b)

WELLS FARGO & COMPANY AND SUBSIDIARIES

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS

 

     Quarter ended
March 31,
 

(in millions)

   2013      2012  

Earnings including interest on deposits (1):

     

Income before income tax expense

   $ 7,640         6,648   

Less: Net income from noncontrolling interests

     49         72   
  

 

 

    

 

 

 

Income before income tax expense and noncontrolling interests

     7,591         6,576   

Fixed charges

     1,248         1,457   
  

 

 

    

 

 

 
     8,839         8,033   
  

 

 

    

 

 

 

Preferred dividend requirement

     240         226   

Tax factor (based on effective tax rate)

     1.47         1.55   
  

 

 

    

 

 

 

Preferred dividends (2)

     352         350   
  

 

 

    

 

 

 

Fixed charges (1):

     

Interest expense

     1,151         1,367   

Estimated interest component of net rental expense

     97         90   
  

 

 

    

 

 

 
     1,248         1,457   
  

 

 

    

 

 

 

Fixed charges and preferred dividends

     1,600         1,807   
  

 

 

    

 

 

 

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

     5.52         4.45   
  

 

 

    

 

 

 

Earnings excluding interest on deposits:

     

Income before income tax expense and noncontrolling interests

     7,591         6,576   

Fixed charges

     879         1,000   
  

 

 

    

 

 

 
     8,470         7,576   
  

 

 

    

 

 

 

Preferred dividends (2)

     352         350   
  

 

 

    

 

 

 

Fixed charges:

     

Interest expense

     1,151         1,367   

Less: Interest on deposits

     369         457   

Estimated interest component of net rental expense

     97         90   
  

 

 

    

 

 

 
     879         1,000   
  

 

 

    

 

 

 

Fixed charges and preferred dividends

   $ 1,231         1,350   
  

 

 

    

 

 

 

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

     6.88         5.61   
  

 

 

    

 

 

 

 

(1) As defined in Item 503(d) of Regulation S-K.
(2) The preferred dividends, including accretion, were increased to amounts representing the pretax earnings that would be required to cover such dividend and accretion 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.