Radian (RDN) 10-Q 2018 Q1 Quarterly report

Exhibit 12

Radian Group Inc.

Ratio of Earnings to Fixed Charges

	Three Months Ended		Fiscal Years Ended December 31,
($ in thousands)	March 31, 2018		2017		2016		2015		2014		2013
Pretax income (loss) from continuing operations	$	142,442	$	346,737	$	483,686	$	437,829	$	407,156	$	(173,346	)
Fixed charges	15,504		64,672		82,807		92,758		91,772		75,638
Total earnings available for fixed charges	157,946		411,409		566,493		530,587		498,928		(97,708		)
Fixed charges:
Interest expense, including capitalized interest	15,080		62,761		81,132		91,102		90,464		74,618
Interest portion of rental expense	424		1,911		1,675		1,656		1,308		1,020
Total fixed charges	$	15,504	$	64,672	$	82,807	$	92,758	$	91,772	$	75,638
Ratio of earnings to fixed charges	10.2x		6.4x		6.8x		5.7x		5.4x		(1)

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(1) Ratio coverage less than 1:1 is not presented. For the period ended December 31, 2013, additional earnings of $173,346 would have been required to achieve a ratio of 1:1.

As defined in Item 503 of Regulation S-K, for purposes of calculating the ratio of earnings to fixed charges, earnings is the amount resulting from adding and subtracting the following items, which are reflected and shown above where applicable to us:

Add:

• consolidated pretax income from continuing operations before adjustment for income or loss from equity investees;

• fixed charges, as defined below;

• amortization of capitalized interest;

• distributed income of equity investees; and

• our share of pretax losses of equity investees for which charges arising from guarantees are included in fixed charges.

Subtract:

• interest capitalized;

• preference security dividend requirements of consolidated subsidiaries; and

• the noncontrolling interest in pretax income of subsidiaries that have not incurred fixed charges.

Fixed charges is defined as the sum of:

• interest expensed and capitalized (from both continuing and discontinued operations);

• amortization of premiums, discounts and capitalized expenses related to indebtedness;

• an estimate of the interest component within rental expense; and

• preference security dividend requirements of consolidated subsidiaries.

We deemed 1/3 of total rental expense to be a reasonable approximation of the interest portion of rental expense. The ratio does not adjust for interest associated with our unrecognized tax benefits, as they are recorded as a component of income tax expense.

We have not issued preferred stock. Therefore, the ratios of earnings to combined fixed charges and preferred stock dividends are the same as the ratios of earnings to fixed charges.