EX-12 9 ex12plico123104.htm EXHIBIT 12 Exhibit 12

 

Exhibit 12

 

CONSOLIDATED EARNINGS RATIOS

 

The following table sets forth, for the years and periods indicated, Protective Life Insurance Company’s (Protective Life) ratios of:

 

•

Consolidated earnings to fixed charges.

 

•

Consolidated earnings to fixed charges before interest credited on investment products.

 

 

Year Ended December 31

 

2004

2003

2002

2001

2000

1999

 

 

 

 

 

 

 

Ratio of Consolidated Earnings to Fixed Charges(1)

1.6

1.5

1.3

1.2

1.2

1.6

Ratio of Consolidated Earnings to Fixed Charges

Before Interest Credited on Investment Products(2)

46.4

83.4

49.1

47.2

28.3

27.7

 

(1)

Protective Life calculates the ratio of “Consolidated Earnings to Fixed Charges” by dividing the sum of income from continuing operations before income tax (BT), interest expense (which includes an estimate of the interest component of operating lease expense) (I) and interest credited on investment products (IP) by the sum of interest expense (I) and interest credited on investment products (IP). The formula for this ratio is: (BT+I+IP)/(I+IP). Protective Life continues to sell investment products that credit interest to the contractholder. Investment products include products such as guaranteed investment contracts, annuities, and variable universal life insurance policies. The inclusion of interest credited on investment products results in a negative impact on the ratio of earnings to fixed charges because the effect of increases in interest credited to contractholders more than offsets the effect of the increases in earnings.

 

(2)

Protective Life calculates the ratio of “Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products” by dividing the sum of income from continuing operations before income tax (BT) and interest expense (I) by interest expense (I). The formula for this calculation, therefore, would be: (BT+I)/I.

 

 

COMPUTATION OF CONSOLIDATED EARNINGS RATIOS

 

Year Ended December 31,

 

2004

2003

2002

2001

2000

1999

 

 

 

 

 

 

 

Computation of Ratio of Consolidated Earnings to

Fixed Charges Before Interest Credited on

Investment Products

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations before Income Tax

  $ 371,163

  $ 349,972

  $ 241,623

 $ 213,958

$174,622

$186,613

 

 

 

 

 

 

 

Add Interest Expense

8,167

4,249

5,019

4,633

6,400

7,000

Earnings before Interest and Taxes

  $ 379,330

  $ 354,221

  $ 246,642

  $ 218,591

$181,022

$193,613

 

 

 

 

 

 

 

Earnings before Interest and Taxes

Divided by Interest Expense

46.4

83.4

49.1

47.2

28.3

27.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computation of Ratio of Consolidated Earnings to

Fixed Charges

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations before Income Tax    

  $ 371,163

$ 349,972

$ 241,623

  $ 213,958

$174,622

$186,613

 

 

 

 

 

 

 

Add Interest Expense

8,167

4,249

5,019

4,633

6,400

 7,000

 

 

 

 

 

 

 

Add Interest Credited on Investment Products

649,216

647,695

900,930

 944,098

 766,004

  331,746

 

 

 

 

 

 

 

Earnings before Interest, Interest Credited on

Investment Products and Taxes

$1,028,546

$1,001,916

$1,147,572

 $1,162,689

 $947,026

  $525,359

 

 

 

 

 

 

 

Earnings before Interest, Interest Credited on Investment

Products and Taxes Divided by Interest Expense

and Interest Credited on Investment Products

1.6

1.5

1.3

1.2

1.2

1.6