EX-12.2 4 fanniemae201710kex122.htm EXHIBIT 12.2 Exhibit



Exhibit 12.2
FANNIE MAE
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS AND ISSUANCE COST AT REDEMPTION
(Dollars in millions)



 
 
For the Year Ended December 31,
 
 
 
2017
 
2016
 
2015
 
2014
 
2013
 
Earnings:
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
2,463

 
$
12,313

 
$
10,955

 
$
14,209

 
$
83,982

 
Add:
 
 
 
 
 
 
 
 
 
 
 
Total interest expense
 
89,123

 
84,726

 
88,033

 
94,437

 
95,145

 
Provision (benefit) for federal income taxes(1)
 
15,984

 
6,020

 
5,253

 
6,941

 
(45,415
)
 
Gains from partnership investments
 
63

 
(17
)
 
(244
)
 
(268
)
 
(518
)
 
Capitalized interest
 
2

 
4

 
6

 
3

 
1

 
Earnings, as adjusted
 
$
107,635

 
$
103,046

 
$
104,003

 
$
115,322

 
$
133,195

 
Fixed charges:
 
 
 
 
 
 
 
 
 
 
 
Total interest expense
 
89,123

 
84,726

 
88,033

 
94,437

 
95,145

 
Capitalized interest
 
2

 
4

 
6

 
3

 
1

 
Senior preferred stock dividends(2)
 
89,988

 
14,328

 
15,206

 
30,654

 
37,864

 
Total fixed charges
 
$
179,113

 
$
99,058

 
$
103,245

 
$
125,094

 
$
133,010

 
Ratio of earnings to fixed charges
 
0.60:1

 
1.04:1

 
1.01:1

 
0.92:1

 
1.00:1

 
Deficiency (surplus)
 
71,478

 
(3,988
)
 
(758
)
 
9,772

 
(185
)
 
__________
(1) 
In 2017, we remeasured our deferred tax assets using the lower corporate tax rate enacted by the Tax Cuts and Jobs Act that resulted in an additional $9.9 billion provision for federal income taxes in our consolidated statement of operations and comprehensive income for the year ended December 31, 2017. In 2013, we released the substantial majority of the valuation allowance for our net deferred tax assets that resulted in the recognition of a benefit for federal income taxes of $45.4 billion in our consolidated statement of operations and comprehensive income for the year ended December 31, 2013.
(2) 
Represents pre-tax earnings required to pay dividends on outstanding senior preferred stock using our effective income tax rate for the relevant periods. The dividend requirement is calculated by taking the amount of dividend divided by 1 minus our effective income tax rate. For the year ended December 31, 2017, our effective tax rate of 86.6% was different from the federal statutory rate of 35% primarily due to the enactment of the Tax Cuts and Jobs Act, which resulted in a remeasurement of our deferred tax assets using the lower corporate tax rate. For the year ended December 31, 2013, our effective tax rate of (117.8)% was different from the federal statutory rate of 35% primarily due to the release of the substantial majority of our valuation allowance for our net deferred tax assets.