Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends

EX-12.1 5 dex121.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends

EXHIBIT 12.1

MF GLOBAL HOLDINGS LTD.

Computation of Ratio of Earnings to Fixed Charges ⁽¹⁾

(Dollars in thousands)


	For the Year Ended March 31,

	2011			2010			2009		2008		2007
Pre-tax income/(loss) from continuing operations before adjustment for non-controlling interests in consolidated subsidiaries or income or loss from equity investees	$	(76,289	)	$	(195,412	)	$	9,949	$	3,599	$	289,663
Add: Fixed charges
Interest expense, amortization of debt issuance costs and accretion of debt discount		272,649			327,770			563,757		3,234,548		3,783,117
Appropriate portion of rentals representative of the interest factor ⁽²⁾		12,205			9,709			10,720		9,775		6,387

Total fixed charges		284,854			337,479			574,477		3,244,323		3,789,504

Earnings		208,565			142,067			584,426		3,247,922		4,079,167

Ratio of earnings to fixed charges ⁽³⁾		—			—			1.02		1.00		1.08

⁽¹⁾

The ratio of earnings to fixed charges is computed by dividing earnings, which is the sum of pre-tax (loss)/income from continuing operations before adjustment for non-controlling interests in consolidated subsidiaries or income or loss from equity investees and fixed charges, by fixed charges. Fixed charges represent interest expenses, amortization of debt issuance costs, accretion of debt discount and an appropriate portion of rentals representative of the interest factor.

⁽²⁾	The percent of rent included in the computation is a reasonable approximation of the interest factor.

⁽³⁾

Due to the Company’s pre-tax loss in the years ended March 31, 2011 and 2010, the ratio coverage was less than 1:1 in each of these periods. The Company would have needed to generate additional earnings of $76,289 in the year ended March 31, 2011 and $195,412 in the year ended March 31, 2010 to achieve a coverage of 1:1 in each of these periods.

MF GLOBAL HOLDINGS LTD.

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends ⁽⁴⁾

(Dollars in thousands)


	For the Year Ended March 31,

	2011			2010			2009		2008		2007
Pre-tax income/(loss) from continuing operations before adjustment for non-controlling interests in consolidated subsidiaries or income or loss from equity investees	$	(76,289	)	$	(195,412	)	$	9,949	$	3,599	$	289,663
Add: Fixed charges
Interest expense, amortization of debt issuance costs and accretion of debt discount		272,649			327,770			563,757		3,234,548		3,783,117
Appropriate portion of rentals representative of the interest factor ⁽⁵⁾		12,205			9,709			10,720		9,775		6,387

Total fixed charges		284,854			337,479			574,477		3,244,323		3,789,504

Earnings		208,565			142,067			584,426		3,247,922		4,079,167
Preferred dividend requirements ⁽⁶⁾		111,645			30,713			33,704		0		0

Total combined fixed charges and preferred dividends		396,498			368,192			608,181		3,244,323		3,789,504
Ratio of earnings to combined fixed charges and preferred dividends ⁽⁷⁾		—			—			—		1.00		1.08

⁽⁴⁾

The ratio of earnings to combined fixed charges and preferred dividends is computed by dividing earnings, which is the sum of pre-tax (loss)/income from continuing operations before adjustment for non-controlling interests in consolidated subsidiaries or income or loss from equity investees and fixed charges, by combined fixed charges and preferred dividends. Fixed charges represent interest expenses, amortization of debt issuance costs, accretion of debt discount and an appropriate portion of rentals representative of the interest factor.

⁽⁵⁾

The percent of rent included in the computation is a reasonable approximation of the interest factor.

⁽⁶⁾

The preferred dividend requirement represents the amount of pre-tax earnings required to cover preferred stock dividend requirements, with a tax gross-up adjustment in periods in which there is an income tax provision. For the years ended March 31, 2011 and 2009, a 34.4% and 38.8%, respectively, tax rate from ongoing operations was used to calculate the gross-up adjustment. For the year ended March 31, 2010, a tax gross-up adjustment was not required as the Company had an income tax benefit.

⁽⁷⁾

Due to the Company’s pre-tax loss in the years ended March 31, 2011 and 2010 and significant non-cash charges in the year ended March 31, 2009, the ratio coverage was less than 1:1 in each of these periods. The Company would have needed to generate additional earnings of $187,934 in the year ended March 31, 2011, $226,125 in the year ended March 31, 2010 and $23,755 in the year ended March 31, 2009 to achieve a coverage of 1:1 in each of these periods.