EXHIBIT 12
STATEMENT RE: COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
($ amounts in millions)
Years Ended 2007, 2006, 2005, 2004 and 2003
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||
Income (loss) from continuing operations before income taxes, minority interest and earnings attributed to mandatorily redeemable noncontrolling interests(1) | $ | 160.5 | $ | 141.4 | $ | 141.7 | $ | 161.4 | $ | (5.7) | ||||||||
Less: | Equity in earnings (losses) of venture capital partnership investments | 0.3 | 1.1 | 14.8 | 19.3 | 36.2 | ||||||||||||
Add: | Distributed earnings of affiliates | — | — | — | 1.5 | 1.2 | ||||||||||||
Distributed earnings of venture capital partnership investments | 6.9 | 6.7 | 68.0 | 50.4 | 31.8 | |||||||||||||
Income (loss) from continuing operations before income taxes, minority interest, equity in undistributed earnings of affiliates and venture capital partnership investments | $ | 167.1 | $ | 147.0 | $ | 194.9 | $ | 194.0 | $ | (8.9 | ) | |||||||
Fixed Charges: | ||||||||||||||||||
Interest expense on indebtedness(2) | $ | 44.2 | $ | 49.2 | $ | 46.6 | $ | 40.8 | $ | 39.6 | ||||||||
Stock purchase contract adjustment payments | — | — | 7.4 | 8.2 | 8.2 | |||||||||||||
Rental expense | 1.2 | 4.2 | 2.3 | 3.5 | 3.8 | |||||||||||||
Fixed charges, exclusive of interest credited on policyholder contract balances | $ | 45.4 | $ | 53.4 | $ | 56.3 | $ | 52.5 | $ | 51.6 | ||||||||
Interest credited on policyholder contract balances | 157.0 | 171.8 | 191.2 | 201.6 | 207.9 | |||||||||||||
Total fixed charges, inclusive of interest credited on policyholder contract balances | $ | 202.4 | $ | 225.2 | $ | 247.5 | $ | 254.1 | $ | 259.5 | ||||||||
Income (loss) from continuing operations before income taxes, minority interest, equity in undistributed earnings of affiliates and venture capital partnership investments and fixed charges | $ | 369.5 | $ | 372.2 | $ | 442.4 | $ | 448.1 | $ | 250.6 | ||||||||
Ratio of earnings to fixed charges | 1.8 | 1.7 | 1.8 | 1.8 | — | |||||||||||||
Additional earnings required to achieve 1:1 ratio coverage | $ | — | $ | — | $ | — | $ | — | $ | 8.9 | ||||||||
SUPPLEMENTAL RATIO — ratio of earnings to fixed charges exclusive of interest credited on policyholder contract balances: | ||||||||||||||||||
Income (loss) from continuing operations before income taxes, minority interest , equity in undistributed earnings of affiliates and venture capital partnership investments | $ | 167.1 | $ | 147.0 | $ | 194.9 | $ | 194.0 | $ | (8.9) | ||||||||
Fixed Charges: | ||||||||||||||||||
Total fixed charges, as above | $ | 45.4 | $ | 53.4 | $ | 56.3 | $ | 52.5 | $ | 51.6 | ||||||||
Income (loss) from continuing operations before income taxes, minority interest, equity in undistributed earnings of affiliates and venture capital partnership investments and fixed charges | $ | 212.5 | $ | 200.4 | $ | 251.2 | $ | 246.5 | $ | 42.7 | ||||||||
Ratio of earnings to fixed charges | 4.7 | 3.8 | 4.5 | 4.7 | — | |||||||||||||
Additional earnings required to achieve 1:1 ratio coverage | $ | — | $ | — | $ | — | $ | — | $ | 8.9 | ||||||||
(1) | Earnings attributed to mandatorily redeemable noncontrolling interests included in Other operating expenses for the years ended 2007 through 2003 were $0.0 million, $0.0 million, $6.7 million, $14.3 million and $12.0 million, respectively. |
(2) | Interest expense on collateralized obligations is not included as these are non-recourse liabilities to Phoenix and the interest expense is solely funded by assets pledged as collateral consolidated on our balance sheet. |