EX-12.1 3 cof-09302015x10qxex121.htm EXHIBIT 12.1 Exhibit


Exhibit 12.1

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS(1)(2) 
 
 
Nine Months Ended September 30, 2015
 
Year Ended December 31,
(Dollars in millions)
 
 
2014
 
2013
 
2012
 
2011
 
2010
Ratios (including interest expense on deposits):
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
 
$
4,547

 
$
6,569

 
$
6,578

 
$
5,184

  
$
4,688

  
$
4,406

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges
 
1,207

 
1,586

 
1,796

 
2,377

  
2,251

  
2,903

Equity in undistributed (gain) loss of unconsolidated subsidiaries
 
(10
)
 
(1
)
 
(16
)
 
(22
)
  
4

  
8

Earnings available for fixed charges, as adjusted
 
5,744

 
8,154

 
8,358

 
7,539

  
6,943

  
7,317

Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense on deposits and borrowings
 
1,202

 
1,579

 
1,792

 
2,375

  
2,246

  
2,896

Interest factor in rent expense
 
5

 
7

 
4

 
2

  
5

  
7

Total fixed charges
 
1,207

 
1,586

 
1,796

 
2,377

  
2,251

  
2,903

Preferred stock dividend requirements(3)
 
132

 
100

 
77

 
20

 
—

 
—

Total combined fixed charges and preferred stock dividends
 
$
1,339

 
$
1,686

 
$
1,873

 
$
2,397

 
$
2,251

 
$
2,903

Ratio of earnings to fixed charges
 
4.76

 
5.14

 
4.65

 
3.17

 
3.08

 
2.52

Ratio of earnings to combined fixed charges and preferred stock dividends
 
4.29
 
4.84
 
4.46
 
3.15
  
3.08
  
2.52
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios (excluding interest expense on deposits):
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
 
$
4,547

 
$
6,569

 
$
6,578

 
$
5,184

  
$
4,688

  
$
4,406

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges
 
393

 
498

 
555

 
974

  
1,064

  
1,438

Equity in undistributed (gain) loss of unconsolidated subsidiaries
 
(10
)
 
(1
)
 
(16
)
 
(22
)
  
4

  
8

Earnings available for fixed charges, as adjusted
 
4,930

 
7,066

 
7,117

 
6,136

  
5,756

  
5,852

Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense on borrowings(4)
 
388

 
491

 
551

 
972

  
1,059

  
1,431

Interest factor in rent expense
 
5

 
7

 
4

 
2

  
5

  
7

Total fixed charges
 
393

 
498

 
555

 
974

  
1,064

  
1,438

Preferred stock dividend requirements(3)
 
132

 
100

 
77

 
20

 
—

 
—

Total combined fixed charges and preferred stock dividends
 
$
525

 
$
598

 
$
632

 
$
994

 
$
1,064

 
$
1,438

Ratio of earnings to fixed charges, excluding interest on deposits
 
12.54

 
14.19

 
12.82

 
6.30

 
5.41

 
4.07

Ratio of earnings to combined fixed charges, excluding interest on deposits, and preferred stock dividends
 
9.39
 
11.82
 
11.26
 
6.17
  
5.41
  
4.07
_________
(1) 
As of January 1, 2014, we adopted the proportional amortization method of accounting for Investments in Qualified Affordable Housing Projects. See "Note 1—Summary of Significant Accounting Policies" for additional information. Prior periods have been recast to conform to this presentation.
(2) 
We acquired ING Direct on February 17, 2012. On May 1, 2012, we closed the 2012 U.S. card acquisition. Each of these transactions was accounted for under the acquisition method of accounting.
(3) 
Preferred stock dividends represent pre-tax earnings that would be required to cover any preferred stock dividends requirements, computed using our effective tax rate, whenever there is an income tax provision, for the relevant periods
(4) 
Represents total interest expense reported on our consolidated statements of income, excluding interest on deposits of $814 million for the the nine months ended September 30, 2015, and $1.1 billion, $1.2 billion, $1.4 billion, $1.2 billion and $1.5 billion for the years ended December 31, 2014, 2013, 2012, 2011 and 2010, respectively.