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WASHINGTON MUTUAL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | ||||||||||
| (dollars in millions) | |||||||||||||
Earnings, including interest on deposits(1): | ||||||||||||||
Income (loss) before income taxes | $ | (5,534 | ) | $ | 1,240 | $ | (7,529 | ) | $ | 2,479 | ||||
Fixed charges | 1,945 | 2,756 | 4,401 | 5,726 | ||||||||||
$ | (3,589 | ) | $ | 3,996 | $ | (3,128 | ) | $ | 8,205 | |||||
Preferred dividend requirement | $ | 71 | (2) | $ | 8 | $ | 136 | (2) | $ | 15 | ||||
Ratio of income (loss) before income taxes to net income (loss) | N/M | 1.49 | N/M | 1.54 | ||||||||||
Preferred dividends | $ | 71 | $ | 12 | (3) | $ | 136 | $ | 23 | (3) | ||||
Fixed charges(1)(4): | ||||||||||||||
Interest expense | $ | 1,906 | $ | 2,714 | $ | 4,321 | $ | 5,641 | ||||||
Estimated interest component of net rental expense | 39 | 42 | 80 | 85 | ||||||||||
1,945 | 2,756 | 4,401 | 5,726 | |||||||||||
Fixed charges and preferred dividends | $ | 2,016 | $ | 2,768 | $ | 4,537 | $ | 5,749 | ||||||
Ratio of earnings to fixed charges and preferred dividends | * | 1.44 | * | 1.43 | ||||||||||
Earnings, excluding interest on deposits(1): | ||||||||||||||
Income (loss) before income taxes | $ | (5,534 | ) | $ | 1,240 | $ | (7,529 | ) | $ | 2,479 | ||||
Fixed charges | 830 | 1,033 | 1,958 | 2,231 | ||||||||||
$ | (4,704 | ) | $ | 2,273 | $ | (5,571 | ) | $ | 4,710 | |||||
Preferred dividends | $ | 71 | $ | 12 | (3) | $ | 136 | $ | 23 | (3) | ||||
Fixed charges(1)(4): | ||||||||||||||
Interest expense | $ | 1,906 | $ | 2,714 | $ | 4,321 | $ | 5,641 | ||||||
Less: Interest on deposits | (1,115 | ) | (1,723 | ) | (2,443 | ) | (3,495 | ) | ||||||
Estimated interest component of net rental expense | 39 | 42 | 80 | 85 | ||||||||||
830 | 1,033 | 1,958 | 2,231 | |||||||||||
Fixed charges and preferred dividends | $ | 901 | $ | 1,045 | $ | 2,094 | $ | 2,254 | ||||||
Ratio of earnings to fixed charges and preferred dividends | * | 2.18 | * | 2.09 | ||||||||||
N/M = Not meaningful
- (1)
- As defined in Item 503(d) of Regulation S-K.
- (2)
- Excludes a $3.29 billion one-time, non-cash dividend recorded in the second quarter of 2008 resulting from the beneficial conversion feature of the Series S and Series T Contingently Convertible Perpetual Non-cumulative Preferred Stock.
- (3)
- The preferred dividends were increased to amounts representing the pretax earnings that would be required to cover such dividend requirements.
- (4)
- Fixed charges exclude interest expense on uncertain tax positions which is included as a component of income taxes in the Consolidated Statements of Income.
- *
- The earnings for the three and six months ended June 30, 2008 were inadequate to cover total fixed charges and preferred dividends. The deficiencies in coverage for the periods were $5.61 billion and $7.67 billion.