Freddie Mac 2015 Annual Report Download - page 427

Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Year Ended December 31,
2015 2014 2013 2012 2011
(dollars in millions)
Net income (loss) before income tax (expense) benefit and cumulative effect of
changes in accounting principles $9,274 $ 11,002 $ 25,363 $9,445 $(5,666)
Add:
Total interest expense 51,916 54,916 55,779 66,502 79,988
Interest factor in rental expenses 2 5 444
Earnings (loss), as adjusted $61,192 $ 65,923 $ 81,146 $75,951 $74,326
Fixed charges:
Total interest expense $51,916 $ 54,916 $ 55,779 $66,502 $79,988
Interest factor in rental expenses 2 5 444
Total fixed charges $51,918 $ 54,921 $ 55,783 $66,506 $79,992
Senior preferred stock and preferred stock dividends(1) 5,510 19,610 47,591 7,229 6,498
Total fixed charges including preferred stock dividends $57,428 $ 74,531 $103,374 $ 73,735 $86,490
Ratio of earnings to fixed charges(2) 1.18 1.20 1.45 1.14 —
Ratio of earnings to combined fixed charges and preferred stock dividends(3) 1.07 — — 1.03 —
(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 $5.7 billion for the year ended December 31, 2011, 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 $8.6 billion,
$22.2 billion, and $12.2 billion for the years ended December 31, 2014, 2013, and 2011, respectively.