Exhibit 12
LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES
HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
For the Nine Months Ended September 30, | For the Years Ended December 31, | |||||||||||||||||||||||||||||
(dollars in millions) | 2011 | 2010 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||||
Income (loss) from continuing operations before taxes | $ | 1,050 | $ | 982 | $ | 1,234 | $ | (521 | ) | $ | (137 | ) | $ | 1,675 | $ | 1,631 | ||||||||||||||
Sub-total of fixed charges | 232 | 227 | 307 | 292 | 303 | 325 | 242 | |||||||||||||||||||||||
Sub-total of adjusted income (loss) | 1,282 | 1,209 | 1,541 | (229 | ) | 166 | 2,000 | 1,873 | ||||||||||||||||||||||
Interest on annuities and financial products | 1,860 | 1,873 | 2,496 | 2,512 | 2,532 | 2,519 | 2,260 | |||||||||||||||||||||||
Adjusted income (loss) base | $ | 3,142 | $ | 3,082 | $ | 4,037 | $ | 2,283 | $ | 2,698 | $ | 4,519 | $ | 4,133 | ||||||||||||||||
Fixed Charges | ||||||||||||||||||||||||||||||
Interest and debt expense (1) | $ | 215 | $ | 212 | �� | $ | 286 | $ | 261 | $ | 281 | $ | 284 | $ | 223 | |||||||||||||||
Interest expense related to uncertain tax positions | 7 | 4 | 7 | 13 | 2 | 21 | — | |||||||||||||||||||||||
Portion of rent expense representing interest | 10 | 11 | 14 | 18 | 20 | 20 | 19 | |||||||||||||||||||||||
Sub-total of fixed charges excluding interest on annuities and financial products | 232 | 227 | 307 | 292 | 303 | 325 | 242 | |||||||||||||||||||||||
Interest on annuities and financial products | 1,860 | 1,873 | 2,496 | 2,512 | 2,532 | 2,519 | 2,260 | |||||||||||||||||||||||
Total fixed charges | $ | 2,092 | $ | 2,100 | $ | 2,803 | $ | 2,804 | $ | 2,835 | $ | 2,844 | $ | 2,502 | ||||||||||||||||
Ratio of sub-total of adjusted income to sub-total of fixed charges excluding interest on annuities and financial products (2) | 5.53 | 5.33 | 5.02 | — | — | 6.15 | 7.74 | |||||||||||||||||||||||
Ratio of adjusted income base to total fixed charges (2) | 1.50 | 1.47 | 1.44 | — | — | 1.59 | 1.65 |
(1) | Interest and debt expense for the years ended December 31, 2010, 2009 and 2006 excludes (i) a $5 million loss, (ii) a $64 million gain and (iii) a $5 million gain, respectively, and for the nine months ended September 30, 2011 an $8 million loss, each related to the early retirement of debt. |
(2) | The ratios of earnings to fixed charges for the years ended December 31, 2009 and 2008 indicated less than one-to-one coverage and are therefore not presented. Additional earnings of $521 million and $137 million would have been required for the years ended December 31, 2009 and 2008, respectively, to achieve ratios of one-to-one coverage. |