EX-12 20 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES. Computation of Ratio of Earnings to Fixed Charges.

Exhibit 12

LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES

HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES

(dollars in millions)

 

     For the Years Ended December 31,
     2008     2007    2006    2005    2004

Income (loss) from continuing operations before taxes

    $ (25 )   $ 1,874    $ 1,778    $ 1,075    $ 1,036

Sub-total of fixed charges

      303       325      242      110      116
                                   

Sub-total of adjusted income

      278       2,199      2,020      1,185      1,152

Interest on annuities and financial products

      2,532       2,519      2,260      1,570      1,571
                                   

Adjusted income base

    $ 2,810     $ 4,718    $ 4,280    $ 2,755    $ 2,723
                                   

Fixed Charges

              

Interest and debt expense (1)

    $ 281     $ 284    $ 223    $ 89    $ 94

Interest expense related to uncertain tax positions

      2       21      —        —        —  

Portion of rent expense representing interest

      20       20      19      21      22
                                   

Sub-total of fixed charges excluding interest on annuities and financial products

      303       325      242      110      116

Interest on annuities and financial products

      2,532       2,519      2,260      1,570      1,571
                                   

Total fixed charges

    $ 2,835     $ 2,844    $ 2,502    $ 1,680    $ 1,687
                                   

Ratio of sub-total of adjusted income to sub-total of fixed charges excluding interest on annuities and financial products (2)

      —         6.77      8.35      10.77      9.93

Ratio of adjusted income base to total fixed charges (2)

      —         1.66      1.71      1.64      1.61

 

(1)

Interest and debt expense excludes $5 million related to the early retirement of debt in 2006.

(2)

The ratios of earnings to fixed charges for the year ended December 31, 2008, indicated less than one-to-one coverage and are therefore not presented. Additional earnings of $25 million would have been required for the year ended December 31, 2008, to achieve ratios of one-to-one coverage.