Exhibit 12.2
FANNIE MAE
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(Dollars in millions)
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(Dollars in millions)
For the Year Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
Earnings: | ||||||||||||||||||||
Income before extraordinary gains (losses) and cumulative effect of change in accounting principle, net of taxes | $ | 4,047 | $ | 6,294 | $ | 4,975 | $ | 7,852 | $ | 3,914 | ||||||||||
Add: | ||||||||||||||||||||
Total interest expense | 36,875 | 33,339 | 29,737 | 29,587 | 32,498 | |||||||||||||||
Provision for federal income taxes | 166 | 1,277 | 1,024 | 2,434 | 840 | |||||||||||||||
Losses from partnership investments (1) | 865 | 849 | 702 | 637 | 509 | |||||||||||||||
Capitalized interest | 22 | 11 | 16 | 19 | 17 | |||||||||||||||
Minority interest in earnings (losses) of consolidated subsidiaries | (10 | ) | 2 | 8 | — | — | ||||||||||||||
Earnings, as adjusted | $ | 41,965 | $ | 41,772 | $ | 36,462 | $ | 40,529 | $ | 37,778 | ||||||||||
Fixed charges: | ||||||||||||||||||||
Total interest expense | $ | 36,875 | $ | 33,339 | $ | 29,737 | $ | 29,587 | $ | 32,498 | ||||||||||
Capitalized interest | 22 | 11 | 16 | 19 | 17 | |||||||||||||||
Preferred stock dividends and issuance costs at redemption (2) | 532 | 585 | 199 | 197 | 135 | |||||||||||||||
Total fixed charges including preferred stock dividends and issuance costs at redemption | $ | 37,429 | $ | 33,935 | $ | 29,952 | $ | 29,803 | $ | 32,650 | ||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends and issuance costs at redemption | 1.12:1 | 1.23:1 | 1.22:1 | 1.36:1 | 1.16:1 | |||||||||||||||
(1) | Includes amortized capitalized interest related to our partnership investments of $10 million, $9 million , $5 million, $5 million and $4 million for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 respectively. | |
(2) | Represents pre-tax earnings required to pay dividends on outstanding preferred stock using our effective income tax rate for the relevant periods. |