Exhibit 12
DISCOVER FINANCIAL SERVICES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Years Ended November 30, | |||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||
(dollars in millions) | |||||||||||||||
Earnings: | |||||||||||||||
Income from continuing operations before income tax expense | $ | 2,120,898 | $ | 1,657,605 | $ | 1,525,714 | $ | 1,667,753 | $ | 956,036 | |||||
Losses from unconsolidated investees | 3,396 | 3,946 | 4,279 | 2,968 | 2,089 | ||||||||||
Total earnings | 2,124,294 | 1,661,551 | 1,529,993 | 1,670,721 | 958,125 | ||||||||||
Fixed Charges(1): | |||||||||||||||
Total interest expense | 1,251,285 | 1,288,004 | 1,223,271 | 836,279 | 718,212 | ||||||||||
Interest factor in rents | 4,383 | 4,777 | 3,489 | 2,947 | 2,826 | ||||||||||
Total fixed charges | 1,255,668 | 1,292,781 | 1,226,760 | 839,226 | 721,038 | ||||||||||
Preferred stock requirements | 88 | — | — | — | — | ||||||||||
Earnings from continuing operations before income tax expense and fixed charges | $ | 3,379,962 | $ | 2,954,332 | $ | 2,756,753 | $ | 2,509,947 | $ | 1,679,163 | |||||
Ratio of earnings to fixed charges | 2.7 | 2.3 | 2.2 | 3.0 | 2.3 | ||||||||||
Earnings from continuing operations before income tax expense, fixed charges and preferred stock requirements | $ | 3,380,050 | $ | 2,954,332 | $ | 2,756,753 | $ | 2,509,947 | $ | 1,679,163 | |||||
Ratio of earnings to fixed charges and preferred stock requirements | 2.3 | 2.3 | 2.2 | 3.0 | 2.3 | ||||||||||
(1) | Fixed charges defined as interest expensed, amortized premiums discounts and capitalized expenses related to indebtedness and interest within rental expense. |