EX-12.2 9 a06-2446_1ex12d2.htm STATEMENTS REGARDING COMPUTATION OF RATIOS

EXHIBIT 12.2

WASHINGTON MUTUAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS

 

 

Year Ended December 31,

 

 

 

2005

 

2004

 

2003

 

2002

 

2001

 

 

 

(dollars in millions)

 

Earnings, including interest on deposits(1):

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

$

5,438

 

$

3,984

 

$

6,029

 

$

6,006

 

$

4,826

 

Fixed charges

 

7,871

 

4,403

 

4,687

 

5,842

 

8,071

 

 

 

$

13,309

 

$

8,387

 

$

10,716

 

$

11,848

 

$

12,897

 

Preferred dividend requirement

 

$

–

 

$

–

 

$

–

 

$

5

 

$

7

 

Ratio of income from continuing operations before income taxes to net income from continuing operations

 

1.58

 

1.61

 

1.59

 

1.59

 

1.59

 

Preferred dividends(2)

 

$

–

 

$

–

 

$

–

 

$

8

 

$

11

 

Fixed charges(1):

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

7,702

 

$

4,234

 

$

4,534

 

$

5,726

 

$

7,979

 

Estimated interest component of net rental expense

 

169

 

169

 

153

 

116

 

92

 

 

 

7,871

 

4,403

 

4,687

 

5,842

 

8,071

 

Fixed charges and preferred dividends

 

$

7,871

 

$

4,403

 

$

4,687

 

$

5,850

 

$

8,082

 

Ratio of earnings to fixed charges and preferred dividends(3)

 

1.69

 

1.90

 

2.29

 

2.03

 

1.60

 

Earnings, excluding interest on deposits(1):

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

$

5,438

 

$

3,984

 

$

6,029

 

$

6,006

 

$

4,826

 

Fixed charges

 

4,143

 

2,360

 

2,522

 

3,181

 

4,990

 

 

 

$

9,581

 

$

6,344

 

$

8,551

 

$

9,187

 

$

9,816

 

Preferred dividends(2)

 

$

–

 

$

–

 

$

–

 

$

8

 

$

11

 

Fixed charges(1):

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

7,702

 

$

4,234

 

$

4,534

 

$

5,726

 

$

7,979

 

Less: interest on deposits

 

(3,728

)

(2,043

)

(2,165

)

(2,661

)

(3,081

)

Estimated interest component of net rental expense

 

169

 

169

 

153

 

116

 

92

 

Fixed charges and preferred dividends

 

4,143

 

2,360

 

2,522

 

3,181

 

4,990

 

 

 

$

4,143

 

$

2,360

 

$

2,522

 

$

3,189

 

$

5,001

 

Ratio of earnings to fixed charges and preferred dividends(3)

 

2.31

 

2.69

 

3.39

 

2.88

 

1.96

 

(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.