Capital One 2013 Annual Report Download - page 293

Exhibit 12.2
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS(1)
Year Ended December 31,
(Dollars in millions) 2013 2012 2011 2010 2009
Ratio (including interest expense on deposits):
Earnings:
Income from continuing operations before income taxes .... $6,417 $5,035 $4,587 $4,330 $1,336
Fixed charges ...................................... 1,796 2,377 2,251 2,903 2,975
Equity in undistributed loss of unconsolidated subsidiaries . . 154 127 112 49 60
Earnings available for fixed charges, as adjusted .............. $8,367 $7,539 $6,950 $7,282 $4,371
Fixed charges:
Interest expense on deposits and borrowings .............. $1,792 $2,375 $2,246 $2,896 $2,967
Interest factor in rent expense ......................... 42578
Total fixed charges .................................. $1,796 $2,377 $2,251 $2,903 $2,975
Preferred stock dividend requirements(3) ..................... 77 20 — — 188
Total combined fixed charges and preferred stock dividends ..... $1,873 $2,397 $2,251 $2,903 $3,163
Ratio of earnings to combined fixed charges and preferred stock
dividends ........................................... 4.47 3.15 3.09 2.51 1.38
Ratio (excluding interest expense on deposits):
Earnings:
Income from continuing operations before income taxes .... $6,417 $5,035 $4,587 $4,330 $1,336
Fixed charges ...................................... 555 974 1,064 1,438 882
Equity in undistributed loss of unconsolidated subsidiaries . . 154 127 112 49 60
Earnings available for fixed charges, as adjusted .......... $7,126 $6,136 $5,763 $5,817 $2,278
Fixed charges:
Interest expense on borrowings(2) ....................... $ 551 $ 972 $1,059 $1,431 $ 874
Interest factor in rent expense ......................... 42578
Total fixed charges .................................. $ 555 $ 974 $1,064 $1,438 $ 882
Preferred stock dividend requirements(3) ..................... 77 20 — — 188
Total combined fixed charges and preferred stock dividends ..... $ 632 $ 994 $1,064 $1,438 $1,070
Ratio of earnings to combined fixed charges, excluding interest on
deposits, and preferred stock dividends .................... 11.28 6.17 5.42 4.05 2.13
(1) On February 27, 2009, we acquired CCB On February 17, 2012, we acquired ING Direct. 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, and their respective results of
operations are included in our results from each respective transaction date.
(2) Represents total interest expense reported in our consolidated statements of income, excluding interest on deposits of $1.2 billion,
$1.4 billion, $1.2 billion, $1.5 billion, and $2.1 billion for the years ended December 31, 2013, 2012, 2011, 2010, and 2009, respectively.
(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.