Freddie Mac 2009 Annual Report Download - page 342

Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
2009
(1)
2008
(1)
2007
(1)
2006 2005
Year Ended December 31,
(dollars in millions)
Net income (loss) before income tax benefit (expense) and cumulative effect of
changes in accounting principles .................................... $(22,384) $(44,564) $ (5,989) $ 2,340 $ 2,626
Add:
Low-income housing tax credit partnerships . . . . . . . . .................... 4,155 453 469 407 320
Total interest expense............................................ 22,150 33,332 38,482 37,270 29,899
Interest factor in rental expenses .................................... 7 8 7 6 6
Earnings (loss), as adjusted . . ....................................... $ 3,928 $(10,771) $32,969 $40,023 $32,851
Fixed charges:
Total interest expense............................................ $22,150 $ 33,332 $38,482 $37,270 $29,899
Interest factor in rental expenses .................................... 7 8 7 6 6
Capitalized interest ............................................. — — — — —
Total fixed charges . . ............................................. $22,157 $ 33,340 $38,489 $37,276 $29,905
Ratio of earnings to fixed charges
(2)
................................... — — — 1.07 1.10
(1) For the ratio of earnings to fixed charges to equal 1.00, earnings (loss), as adjusted must increase by $18.2 billion, $44.1 billion and $5.5 billion for the
years ended December 31, 2009, 2008 and 2007, respectively.
(2) Ratio of earnings to fixed charges is computed by dividing earnings, as adjusted by total fixed charges.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
2009
(1)
2008
(1)
2007
(1)
2006 2005
Year Ended December 31,
(dollars in millions)
Net income (loss) before income tax benefit (expense) and cumulative effect of
changes in accounting principles .................................... $(22,384) $(44,564) $ (5,989) $ 2,340 $ 2,626
Add:
Low-income housing tax credit partnerships . . . . . . . . .................... 4,155 453 469 407 320
Total interest expense............................................ 22,150 33,332 38,482 37,270 29,899
Interest factor in rental expenses .................................... 7 8 7 6 6
Earnings (loss), as adjusted . . ....................................... $ 3,928 $(10,771) $32,969 $40,023 $32,851
Fixed charges:
Total interest expense............................................ $22,150 $ 33,332 $38,482 $37,270 $29,899
Interest factor in rental expenses .................................... 7 8 7 6 6
Capitalized interest ............................................. — — — — —
Senior preferred stock and preferred stock dividends
(2)
..................... 4,105 675 398 270 260
Total fixed charges including preferred stock dividends . . .................... $26,262 $ 34,015 $38,887 $37,546 $30,165
Ratio of earnings to combined fixed charges and preferred stock dividends
(3)
........ — — — 1.07 1.09
(1) For the ratio of earnings to combined fixed charges and preferred stock dividends to equal 1.00, earnings (loss), as adjusted must increase by
$22.3 billion, $44.8 billion and $5.9 billion for the years ended December 31, 2009, 2008 and 2007, respectively.
(2) Senior preferred stock and preferred stock dividends represent pre-tax earnings required to cover any senior preferred stock and preferred stock dividend
requirements computed using our effective tax rate, whenever there is an income tax provision, for the relevant periods.
(3) Ratio of earnings to combined fixed charges and preferred stock dividends is computed by dividing earnings, as adjusted by total fixed charges
including preferred stock dividends.