Primus Guaranty (PRSG) 10-Q 2006 Q2 Quarterly report

Table of Contents

EXHIBIT 12

PRIMUS GUARANTY, LTD
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS OF SUBSIDIARY
(In thousands, except ratios)

			Six Months Ended June 30, 2006						Year Ended December 31,
									2005						2004						2003						2002						2001
Earnings (loss):
Income (loss) from continuing operations before taxes(b)				$	48,587					$	7,994					$	25,869					$	80,153					$	(2,815	)				$	(2,787	)
Add:
Fixed charges					7,957						6,589						3,033						1,854						—						—
Subtract:
Distributions on preferred securities of subsidiary					(2,769	)					(3,865	)					(2,138	)					(1,854	)					—						—
Adjusted earnings (loss)				$	53,775					$	10,718					$	26,764					$	80,153					$	(2,815	)				$	(2,787	)
Fixed charges:
Interest expense					5,102						2,660						881						—						—						—
Amortization of capitalized debt issuance costs					86						64						14						—						—						—
Distributions on preferred securities of subsidiary					2,769						3,865						2,138						1,854						—						—
Total fixed charges and preferred distributions				$	7,957					$	6,589					$	3,033					$	1,854					$	—					$	—
Ratio of earnings to combined fixed charges and distributions on preferred securities of subsidiary(a)					6.76						1.63						8.82						43.23						—						—

(a)	In 2002 and 2001, the ratio was not applicable as no fixed charges were incurred in such years.

(b)	Income (loss) from continuing operations before taxes represents income (loss) before income taxes plus adding back distributions on preferred securities of subsidiary