Freddie Mac 2012 Annual Report Download - page 390

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,
2012 2011 2010 2009 2008
(dollars in millions)
Net income (loss) before income tax benefit (expense) and cumulative effect of changes
in accounting principles .............................................. $ 9,445 $ (5,666) $(14,882) $(22,384) $(44,564)
Add:
Low-income housing tax credit partnerships ............................... — — — 4,155 453
Total interest expense ............................................... 66,502 79,988 92,131 22,150 33,332
Interest factor in rental expenses ........................................ 4 4578
Earnings (loss), as adjusted ............................................. $75,951 $74,326 $ 77,254 $ 3,928 $(10,771)
Fixed charges:
Total interest expense ............................................... $66,502 $79,988 $ 92,131 $ 22,150 $ 33,332
Interest factor in rental expenses ........................................ 4 4578
Capitalized interest ................................................. — ————
Total fixed charges ................................................... $66,506 $79,992 $ 92,136 $ 22,157 $ 33,340
Senior preferred stock and preferred stock dividends(1) ........................ 7,229 6,498 5,749 4,105 675
Total fixed charges including preferred stock dividends ......................... $73,735 $86,490 $ 97,885 $ 26,262 $ 34,015
Ratio of earnings to fixed charges(2) ....................................... 1.14 ————
Ratio of earnings to combined fixed charges and preferred stock dividends(3) .......... 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, $14.9 billion, $18.2 billion, and $44.1 billion for the years ended December 31, 2011, 2010, 2009, and 2008,
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 $12.2 billion, $20.6 billion, $22.3 billion,
and $44.8 billion for the years ended December 31, 2011, 2010, 2009, and 2008, respectively.