EX-12.(B) 14 a2072854zex-12_b.htm EXHIBIT 12(B)
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EXHIBIT 12(b)
WASHINGTON MUTUAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS

		Year Ended December 31,
(in millions)		Year Ended December 31,
(in millions)		2001		2000		1999		1998		1997
Earnings, including interest on deposits⁽¹⁾:
Income before income tax expense and extraordinary item		$	4,311	$	2,984	$	2,884	$	2,369	$	1,538
Fixed charges			8,285		9,538		7,674		6,990		6,349

		$	12,596	$	12,522	$	10,558	$	9,359	$	7,887

Preferred dividend requirement		$	7	$	—	$	—	$	20	$	55
Ratio of income before income tax expense to net income			1.58		1.57		1.59		1.59		1.74

Preferred dividends⁽²⁾		$	11	$	—	$	—	$	32	$	96

Fixed charges⁽¹⁾:
	Interest expense	$	8,189	$	9,472	$	7,610	$	6,929	$	6,287
	Estimated interest component of net rental expense		96		66		64		61		62

			8,285		9,538		7,674		6,990		6,349

	Fixed charges and preferred dividends	$	8,296	$	9,538	$	7,674	$	7,022	$	6,445

Ratio of earnings to fixed charges and preferred dividends⁽³⁾			1.52		1.31		1.38		1.33		1.22

Earnings, excluding interest on deposits:
Income before income tax expense and extraordinary item		$	4,311	$	2,984	$	2,884	$	2,369	$	1,538
Fixed charges			5,191		6,248		4,504		3,402		2,703

		$	9,502	$	9,232	$	7,388	$	5,771	$	4,241

Preferred dividends⁽²⁾		$	11	$	—	$	—	$	32	$	96

Fixed charges:
	Interest expense	$	8,189	$	9,472	$	7,610	$	6,929	$	6,287
	Less interest on deposits		3,094		3,290		3,170		3,588		3,646
	Estimated interest component of net rental expense		96		66		64		61		62

			5,191		6,248		4,504		3,402		2,703

	Fixed charges and preferred dividends	$	5,202	$	6,248	$	4,504	$	3,434	$	2,799

Ratio of earnings to fixed charges and preferred dividends⁽³⁾			1.83		1.48		1.64		1.68		1.52

⁽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 were 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 were 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.