Exhibit 12
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)
Nine Months Ended September 30, 2006 | Years Ended December 31, | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||
Pre-tax income (loss) from continuing operations adjusted to exclude income or loss from equity investees | $ | (72,369 | ) | $ | (144,289 | ) | $ | 399,536 | $ | 225,165 | $ | 42,229 | $ | (18,457 | ) | ||||||
Distributed income of equity investees | 4,266 | 32,334 | 2,141 | 553 | 14,089 | 10,747 | |||||||||||||||
Fixed charges: | |||||||||||||||||||||
Interest expense and amortization of debt discount and premium on all indebtedness | 446,909 | 546,313 | 164,156 | 68,995 | 2,073 | 1,083 | |||||||||||||||
Rentals: Equipment and office rent expense—33.33% | 5,314 | 6,057 | 2,798 | 1,719 | 1,692 | 1,657 | |||||||||||||||
Total fixed charges | $ | 452,223 | $ | 552,370 | $ | 166,954 | $ | 70,714 | $ | 3,765 | $ | 2,740 | |||||||||
Pre-tax income (loss) from continuing operations before adjustments for income or loss from equity investees plus fixed charges and distributed income of equity investees | $ | 384,120 | $ | 440,415 | $ | 568,631 | $ | 296,432 | $ | 60,083 | $ | (4,970 | ) | ||||||||
Ratio of earnings to fixed charges | (A) | (A) | 3.4 | 4.2 | 16.0 | (A) |
(A) | Due to the company’s losses in 2006, 2005 and 2001, the ratio coverage for these years was less than 1:1. The company would have had to generate additional earnings of $68,103, $111,955 and $7,710, respectively, to achieve coverage of 1:1 in these periods |