Exhibit 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(in millions, except ratios)
For the Year Ended December 31, | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Fixed charges: | |||||||||||||||||||
Interest expense | $ | 84 | $ | 82 | $ | 191 | $ | 314 | $ | 349 | |||||||||
Amortization of debt issue expense | 2 | 2 | 2 | 4 | 3 | ||||||||||||||
Estimated interest within rental expense(1) | 9 | 9 | 8 | 7 | 7 | ||||||||||||||
Total fixed charges | $ | 95 | $ | 93 | $ | 201 | $ | 325 | $ | 359 | |||||||||
Preferred stock dividend requirements(2) | 42 | — | — | — | — | ||||||||||||||
Total combined fixed charges and preferred stock dividends | $ | 137 | $ | 93 | $ | 201 | $ | 325 | $ | 359 | |||||||||
Earnings: | |||||||||||||||||||
Income before income taxes less equity in income (loss) of investments | $ | 1,062 | $ | 843 | $ | 84 | $ | 449 | $ | 191 | |||||||||
Fixed charges | 95 | 93 | 201 | 325 | 359 | ||||||||||||||
Earnings, as adjusted | $ | 1,157 | $ | 936 | $ | 285 | $ | 774 | $ | 550 | |||||||||
Ratio of earnings to fixed charges(3) | 12.18 | 10.06 | 1.42 | 2.39 | 1.53 | ||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends(4) | 8.45 | 10.06 | 1.42 | 2.39 | 1.53 | ||||||||||||||
Excess (deficiency) of earnings to fixed charges | $ | 1,062 | $ | 843 | $ | 84 | $ | 449 | $ | 191 |
(1) | Calculated as one-third of net rent expense. |
(2) | Represent the pre-tax earnings that would be required to pay the dividends on outstanding preferred stock. Prior to the 2016 issuance of our Series A fixed-to-floating rate non-cumulative perpetual preferred stock, we had no shares of preferred stock outstanding. Prior to the Series A preferred stock dividends declared and paid in 2017, we had not paid dividends on any shares of preferred stock. |
(3) | Calculated by dividing earnings, as adjusted by fixed charges. |
(4) | Calculated by dividing earnings, as adjusted by combined fixed charges and preferred stock dividends. |