Freddie Mac 2008 Annual Report Download - page 289

Exhibit 12.2
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
2008
(1)
2007
(1)
2006 2005 2004
Year Ended December 31,
(dollars in millions)
Net income (loss) before cumulative effect of changes in accounting principles ....... $(50,119) $ (3,094) $ 2,327 $ 2,172 $ 2,603
Add:
Income tax expense (benefit) ....................................... 5,550 (2,883) (45) 358 609
Minority interests in earnings (loss) of consolidated subsidiaries ............... 8 (8) 58 96 129
Low-income housing tax credit partnerships . ............................ 453 469 407 320 282
Total interest expense . . .......................................... 33,332 38,482 37,270 29,899 26,566
Interest factor in rental expenses . . ................................... 8 7 6 6 6
Earnings (loss), as adjusted .......................................... $(10,768) $32,973 $40,023 $32,851 $30,195
Fixed charges:
Total interest expense . . .......................................... $33,332 $38,482 $37,270 $29,899 $26,566
Interest factor in rental expenses . . ................................... 8 7 6 6 6
Capitalized interest .............................................. — — — — 1
Senior preferred stock and preferred stock dividends
(2)
...................... 675 398 270 260 260
Total fixed charges including preferred stock dividends . . . .................... $34,015 $38,887 $37,546 $30,165 $26,833
Ratio of earnings to combined fixed charges and preferred stock dividends
(3)
........ — — 1.07 1.09 1.13
(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
$44.8 billion and $5.9 billion for the years ended December 31, 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.