CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratio of Earnings to
Fixed Charges and Preferred Dividends
(Dollars in millions)
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Pretax income (loss) from operations: | ||||||||||||||||||||
Net income (loss) | $ | 284.6 | $ | 85.7 | $ | (1,132.3 | ) | $ | (185.0 | ) | $ | 101.2 | ||||||||
Add income tax expense | 8.9 | 87.9 | 413.3 | 61.1 | 58.3 | |||||||||||||||
Add discontinued operations | - | - | 722.7 | 105.9 | (.3 | ) | ||||||||||||||
Pretax income (loss) from operations | 293.5 | 173.6 | 3.7 | (18.0 | ) | 159.2 | ||||||||||||||
Add fixed charges: | ||||||||||||||||||||
Interest expense on corporate debt | 79.3 | 84.7 | 67.9 | 80.3 | 60.4 | |||||||||||||||
Interest expense on investment borrowings | 33.9 | 33.2 | 38.6 | 45.0 | 20.6 | |||||||||||||||
Interest added to policyholder account balances | 303.9 | 324.4 | 330.5 | 399.5 | 426.8 | |||||||||||||||
Portion of rental (a) | 13.0 | 12.8 | 13.4 | 13.7 | 13.2 | |||||||||||||||
Fixed charges | 430.1 | 455.1 | 450.4 | 538.5 | 521.0 | |||||||||||||||
Adjusted earnings | $ | 723.6 | $ | 628.7 | $ | 454.1 | $ | 520.5 | $ | 680.2 | ||||||||||
Ratio of earnings to fixed charges | 1.68 | X | 1.38 | X | 1.01 | X | (b) | 1.31 | X | |||||||||||
Fixed charges | $ | 430.1 | $ | 455.1 | $ | 450.4 | $ | 538.5 | $ | 521.0 | ||||||||||
Add dividends on preferred stock, including dividends on preferred stock of subsidiaries (divided by the ratio of income to pretax income) | - | - | - | 22.9 | 60.0 | |||||||||||||||
Fixed charges plus preferred dividends | $ | 430.1 | $ | 455.1 | $ | 450.4 | $ | 561.4 | $ | 581.0 | ||||||||||
Adjusted earnings | $ | 723.6 | $ | 628.7 | $ | 454.1 | $ | 520.5 | $ | 680.2 | ||||||||||
Ratio of earnings to fixed charges and preferred dividends | 1.68 | X | 1.38 | X | 1.01 | X | (c) | 1.17 | X |
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(a) | Interest portion of rental is estimated to be 33 percent. |
(b) | For such ratio, earnings were $18.0 million less than fixed charges. |
(c) | For such ratio, earnings were $40.9 million less than fixed charges. |