EX-12 2 ex12.htm EXHIBIT 12 Exhibit 12
LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES
EXHIBIT 12—RATIO OF EARNINGS TO FIXED CHARGES

 
   
Three Months Ended
  
   
March 31,
  
(dollars in millions)
  
2006
  
2005
  
Income before Federal Income Taxes and Cumulative Effect of Accounting Changes
  
$
315
  
$
238
  
Sub-total of Fixed Charges
    
27
   
28
 
Sub-total of Adjusted Net Income
    
342
   
266
 
Interest on Annuities & Financial Products
    
392
   
389
 
Adjusted Income Base
  
$ 
734
 
$ 
655
 
Fixed Charges:
              
Interest and Debt Expense
  
$ 
22
 
$ 
22
 
Portion of Rent Expense Representing Interest
    
5
   
6
 
Sub-total of Fixed Charges
    
27
   
28
 
Interest on Annuities & Financial Products
    
392
   
389
 
Sub-total of Fixed Charges
    
419
   
417
 
Preferred Dividends (Pre-tax)
    
*
    
*
  
Total Fixed Charges
  
$
419
  
$
417
  
* Less than $100,000
              
               
Ratio of Earnings to Fixed Charges:
              
Ratio of Earnings to Fixed Charges (Including Interest on Annuities and Financial Products) (1)
    
1.75
   
1.57
 
Excluding Interest on Annuities and Financial Products (2)
    
12.67
   
9.52
 
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (3)
    
1.75
   
1.57
 
               
               
 

 

1.
For purposes of determining this ratio, earnings consist of income before Federal income taxes, cumulative effect of accounting change, if any, and minority interests adjusted for the difference between income or losses from unconsolidated equity investments and cash distributions from such investments, plus fixed charges. Fixed charges consist of 1) interest and debt expense on short and long-term debt and junior subordinated debentures issued to affiliated trusts; 2) interest on annuities and financial products and; 3) the portion of operating leases that are representative of the interest factor.
2.
Same as the ratio of earnings to fixed charges, except fixed charges and earnings in this calculation do not include interest on annuities and financial products. This coverage ratio is not required, but is provided as additional information. This ratio is commonly used by individuals who analyze LNC’s results.
3.
Same as the ratio of earnings to fixed charges, including interest on annuities and financial products, except that fixed charges include the pre-tax earnings required to cover preferred stock dividend requirements.