CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratio of Earnings to
Fixed Charges and Preferred Dividends
(Dollars in millions)
2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||
Pretax income (loss) from operations: | |||||||||||||||||||
Net income (loss) | $ | 382.5 | $ | 284.6 | $ | 85.7 | $ | (1,132.3 | ) | $ | (185.0 | ) | |||||||
Add income tax expense (benefit) | (3.3 | ) | 8.9 | 87.9 | 413.3 | 61.1 | |||||||||||||
Add discontinued operations | — | — | — | 722.7 | 105.9 | ||||||||||||||
Pretax income (loss) from operations | 379.2 | 293.5 | 173.6 | 3.7 | (18.0 | ) | |||||||||||||
Add fixed charges: | |||||||||||||||||||
Interest expense on corporate debt | 76.3 | 79.3 | 84.7 | 67.9 | 80.3 | ||||||||||||||
Interest expense on investment borrowings | 37.8 | 33.9 | 33.2 | 38.6 | 45.0 | ||||||||||||||
Interest added to policyholder account balances | 282.5 | 303.9 | 324.4 | 330.5 | 399.5 | ||||||||||||||
Portion of rental (a) | 13.1 | 13.0 | 12.8 | 13.4 | 13.7 | ||||||||||||||
Fixed charges | 409.7 | 430.1 | 455.1 | 450.4 | 538.5 | ||||||||||||||
Adjusted earnings | $ | 788.9 | $ | 723.6 | $ | 628.7 | $ | 454.1 | $ | 520.5 | |||||||||
Ratio of earnings to fixed charges | 1.93X | 1.68X | 1.38X | 1.01X | (b) | ||||||||||||||
Fixed charges | $ | 409.7 | $ | 430.1 | $ | 455.1 | $ | 450.4 | $ | 538.5 | |||||||||
Add dividends on preferred stock, including dividends on preferred stock of subsidiaries (divided by the ratio of income to pretax income) | — | — | — | — | 22.9 | ||||||||||||||
Fixed charges plus preferred dividends | $ | 409.7 | $ | 430.1 | $ | 455.1 | $ | 450.4 | $ | 561.4 | |||||||||
Adjusted earnings | $ | 788.9 | $ | 723.6 | $ | 628.7 | $ | 454.1 | $ | 520.5 | |||||||||
Ratio of earnings to fixed charges and preferred dividends | 1.93X | 1.68X | 1.38X | 1.01X | (c) |
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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. |