Freddie Mac 2010 Annual Report Download - page 351

Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
2010 2009 2008 2007 2006
Year Ended December 31,
(dollars in millions)
Net Income (loss) before income tax benefit (expense) and cumulative effect of
changes in accounting principles .................................... $(14,882) $(22,384) $(44,564) $ (5,989) $ 2,340
Add:
Low-income housing tax credit partnerships ............................ — 4,155 453 469 407
Total interest expense ........................................... 92,131 22,150 33,332 38,482 37,270
Interest factor in rental expenses .................................... 5 7 8 7 6
Earnings (loss), as adjusted ......................................... $77,254 $ 3,928 $(10,771) $32,969 $40,023
Fixed charges:
Total interest expense ........................................... $92,131 $ 22,150 $ 33,332 $38,482 $37,270
Interest factor in rental expenses .................................... 5 7 8 7 6
Capitalized interest . . ........................................... — — — — —
Total fixed charges . . . . ........................................... $92,136 $ 22,157 $ 33,340 $38,489 $37,276
Senior preferred stock and preferred stock dividends
(1)
..................... 5,749 4,105 675 398 270
Total fixed charges including preferred stock dividends ...................... $97,885 $ 26,262 $ 34,015 $38,887 $37,546
Ratio of earnings to fixed charges
(2)
................................... — — — — 1.07
Ratio of earnings to combined fixed charges and preferred stock dividends
(3)
....... — — — — 1.07
(1) 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.
(2) Ratio of earnings to fixed charges is computed by dividing earnings (loss), as adjusted by total fixed charges. For the ratio to equal 1.00, earnings (loss),
as adjusted must increase by $14.9 billion, $18.2 billion, $44.1 billion and $5.5 billion for the years ended December 31, 2010, 2009, 2008, and 2007,
respectively.
(3) Ratio of earnings to combined fixed charges and preferred stock dividends is computed by dividing earnings (loss), as adjusted by total fixed charges
including preferred stock dividends. For the ratio to equal 1.00, earnings (loss), as adjusted must increase by $20.6 billion, $22.3 billion, $44.8 billion
and $5.9 billion for the years ended December 31, 2010, 2009, 2008, and 2007, respectively.