EX-12.(B) 5 a2104743zex-12_b.htm EXHIBIT 12(B)
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EXHIBIT 12(b)


WELLS FARGO & COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS

(in millions)     Year ended December 31,
   
      2002     2001     2000     1999     1998
Earnings, including interest on deposits(1):                              
  Income before income tax expense and effect of change in accounting principle   $ 8,854   $ 5,479   $ 6,549   $ 6,350   $ 3,665
  Fixed charges     4,155     6,893     8,022     5,943     5,935
   
 
 
 
 
    $ 13,009   $ 12,372   $ 14,571   $ 12,293   $ 9,600
   
 
 
 
 

Preferred dividend requirement
 
$
4
 
$
14
 
$
17
 
$
35
 
$
35
Ratio of income before income tax expense and effect of change in accounting principle to net income before effect of change in accounting principle     1.55     1.60     1.63     1.59     1.69
   
 
 
 
 

Preferred dividends(2)
 
$
6
 
$
22
 
$
28
 
$
56
 
$
59
   
 
 
 
 
Fixed charges(1):                              
  Interest expense     3,977     6,741     7,860     5,818     5,782
  Estimated interest component of net rental expense     178     152     162     125     153
   
 
 
 
 
      4,155     6,893     8,022     5,943     5,935
   
 
 
 
 
  Fixed charges and preferred dividends   $ 4,161   $ 6,915   $ 8,050   $ 5,999   $ 5,994
   
 
 
 
 

Ratio of earnings to fixed charges and preferred dividends(3)
 
 
3.13
 
 
1.79
 
 
1.81
 
 
2.05
 
 
1.60
   
 
 
 
 

Earnings excluding interest on deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Income before income tax expense and effect of change in accounting principle   $ 8,854   $ 5,479   $ 6,549   $ 6,350   $ 3,665
  Fixed charges     2,236     3,340     3,933     2,777     2,420
   
 
 
 
 
    $ 11,090   $ 8,819   $ 10,482   $ 9,127   $ 6,085
   
 
 
 
 

Preferred dividends(2)
 
$
6
 
$
22
 
$
28
 
$
56
 
$
59
   
 
 
 
 
Fixed charges:                              
  Interest expense     3,977     6,741     7,860     5,818     5,782
  Less interest on deposits     1,919     3,553     4,089     3,166     3,515
  Estimated interest component of net rental expense     178     152     162     125     153
   
 
 
 
 
      2,236     3,340     3,933     2,777     2,420
   
 
 
 
 
  Fixed charges and preferred dividends   $ 2,242   $ 3,362   $ 3,961   $ 2,833   $ 2,479
   
 
 
 
 

Ratio of earnings to fixed charges and preferred dividends(3)
 
 
4.95
 
 
2.62
 
 
2.65
 
 
3.22
 
 
2.45
   
 
 
 
 
(1)
As defined in Item 503(d) of Regulation S-K.
(2)
The preferred dividends were increased to amounts representing the pretax earnings that would be required to cover such dividend requirements.
(3)
These computations are included herein in compliance with Securities and Exchange Commission regulations. However, management believes that fixed charge ratios are not meaningful measures for the business of the Company because of two factors. First, even if there was no change in net income, the ratios would decline with an increase in the proportion of income which is tax-exempt or, conversely, they would increase with a decrease in the proportion of income which is tax-exempt. Second, even if there was no change in net income, the ratios would decline if interest income and interest expense increase by the same amount due to an increase in the level of interest rates or, conversely, they would increase if interest income and interest expense decrease by the same amount due to a decrease in the level of interest rates.


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WELLS FARGO & COMPANY AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS