EX-12.1 2 cof-03312018x10qxex121.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
 
 
Three Months Ended March 31, 2018
 
Year Ended December 31,
(Dollars in millions)
 
 
2017
 
2016
 
2015
 
2014
 
2013
Ratios (including interest expense on deposits):
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
 
$
1,662

 
$
5,492

 
$
5,484

 
$
5,881

 
$
6,569

 
$
6,578

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges
 
923

 
2,773

 
2,025

 
1,632

 
1,586

 
1,796

Equity in undistributed gain of unconsolidated subsidiaries
 
5

 
(9
)
 
(7
)
 
(19
)
 
(1
)
 
(16
)
Earnings available for fixed charges, as adjusted
 
$
2,590

 
$
8,256

 
$
7,502

 
$
7,494

 
$
8,154

 
$
8,358

Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense on deposits and borrowings
 
$
919

 
$
2,762

 
$
2,018

 
$
1,625

 
$
1,579

 
$
1,792

Interest factor in rent expense
 
4

 
11

 
7

 
7

 
7

 
4

Total fixed charges
 
923

 
2,773

 
2,025

 
1,632

 
1,586

 
1,796

Preferred stock dividend requirements(1)
 
64

 
688

 
311

 
232

 
100

 
77

Total combined fixed charges and preferred stock dividends
 
$
987

 
$
3,461

 
$
2,336

 
$
1,864

 
$
1,686

 
$
1,873

Ratio of earnings to fixed charges
 
2.81

 
2.98

 
3.70

 
4.59

 
5.14

 
4.65

Ratio of earnings to combined fixed charges and preferred stock dividends(1)
 
2.62

 
2.39

 
3.21

 
4.02

 
4.84

 
4.46

Ratios (excluding interest expense on deposits):
 
 
 
 
 
 
 
 
 
 
 
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
 
$
1,662

 
$
5,492

 
$
5,484

 
$
5,881

 
$
6,569

 
$
6,578

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges
 
384

 
1,171

 
812

 
541

 
498

 
555

Equity in undistributed gains of unconsolidated subsidiaries
 
5

 
(9
)
 
(7
)
 
(19
)
 
(1
)
 
(16
)
Earnings available for fixed charges, as adjusted
 
$
2,051

 
$
6,654

 
$
6,289

 
$
6,403

 
$
7,066

 
$
7,117

Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense on borrowings(2)
 
$
380

 
$
1,160

 
$
805

 
$
534

 
$
491

 
$
551

Interest factor in rent expense
 
4

 
11

 
7

 
7

 
7

 
4

Total fixed charges
 
384

 
1,171

 
812

 
541

 
498

 
555

Preferred stock dividend requirements(1)
 
64

 
688

 
311

 
232

 
100

 
77

Total combined fixed charges and preferred stock dividends
 
$
448

 
$
1,859

 
$
1,123

 
$
773

 
$
598

 
$
632

Ratio of earnings to fixed charges, excluding interest on deposits
 
5.34

 
5.68

 
7.75

 
11.84

 
14.19

 
12.82

Ratio of earnings to combined fixed charges excluding interest on deposits and preferred stock dividends(1)
 
4.58

 
3.58

 
5.60

 
8.28

 
11.82

 
11.26

__________
(1) 
Preferred stock dividends requirements represent pre-tax earnings that would be required to cover any preferred stock dividends, computed using our effective tax rate, whenever there is an income tax provision, for the relevant periods. The impact of the Tax Act to our effective tax rate for 2017 was 32.2%, which is included in the calculations in the presentation above. See “Note 16—Income Taxes” in our 2017 Form 10-K for additional details on the impacts of the Tax Act.
(2) 
Interest expense on borrowings represents total interest expense reported on our consolidated statements of income, excluding interest on deposits of $539 million for the three months ended March 31, 2018, $1.6 billion for the year ended December 31, 2017, $1.2 billion for the year ended December 31, 2016, $1.1 billion for the years ended December 31, 2015 and 2014, and $1.2 billion for the year ended December 31, 2013.