EXHIBIT 12.1
THE PMI GROUP, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(unaudited)
Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(In thousands, except for ratios) | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
(Loss) income from continuing operations before income taxes | $ | (1,060,870 | ) | $ | (1,321,154 | ) | $ | (1,255,204 | ) | $ | 432,378 | $ | 415,501 | |||||||
Less: Equity in losses (earnings) from unconsolidated subsidiaries | 12,019 | 51,802 | 741,500 | (127,309 | ) | (97,885 | ) | |||||||||||||
Add: Equity in losses from unconsolidated subsidiaries with greater than 50% ownership | — | — | — | — | (942 | ) | ||||||||||||||
Add: Distributed earnings of subsidiaries with less than 50% ownership | 10 | 100 | 18,317 | 17,439 | 7,190 | |||||||||||||||
Less: Interest capitalized, net of amortization expense | 553 | 520 | 558 | 482 | (3,296 | ) | ||||||||||||||
Add: Fixed charges | 43,162 | 42,281 | 34,520 | 42,738 | 46,666 | |||||||||||||||
Total (losses) earnings | $ | (1,005,126 | ) | $ | (1,226,451 | ) | $ | (460,309 | ) | $ | 365,728 | $ | 367,234 | |||||||
Fixed charges | ||||||||||||||||||||
Interest expense, distributions on mandatorily redeemable preferred securities and capitalized interest* | $ | 43,013 | $ | 41,007 | $ | 33,391 | $ | 40,234 | $ | 34,919 | ||||||||||
Interest expense of unconsolidated subsidiaries with greater than 50% ownership | — | — | — | — | 9,781 | |||||||||||||||
Interest component of rent expense** | 149 | 1,274 | 1,129 | 2,504 | 1,966 | |||||||||||||||
Total fixed charges | $ | 43,162 | $ | 42,281 | $ | 34,520 | $ | 42,738 | $ | 46,666 | ||||||||||
Ratio of earnings to fixed charges | *** | *** | *** | 8.56 | 7.87 | |||||||||||||||
* | 2006 includes net costs to exchange and extinguish long-term debt. |
** | Represents an estimated interest factor. |
*** | As the results were net losses, total earnings were insufficient to cover fixed charges for the years ended December 31, 2009, 2008 and 2007. Total losses for 2009 included approximately $319.9 million of an increase in net loss reserves.Total losses for 2008 included approximately $1.1billion of anincrease in net loss reserves and a $103.6million impairment of the investment in FGIC.Total losses for 2007 included approximately $795 million of increase in net loss reserves, $763.3 million in equity losses from FGIC, a $39 million partial impairment of the investment in RAM Re and $36 million impairment of deferred policy acquisition costs. |