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) | $ | 335.7 | $ | 240.6 | $ | 20.4 | $ | (1,205.3 | ) | $ | (256.2 | ) | |||||||
Add income tax expense (benefit) | (29.5 | ) | (15.7 | ) | 51.4 | 372.5 | 21.2 | ||||||||||||
Add discontinued operations | — | — | — | 722.7 | 105.9 | ||||||||||||||
Pretax income (loss) from operations | 306.2 | 224.9 | 71.8 | (110.1 | ) | (129.1 | ) | ||||||||||||
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 | $ | 715.9 | $ | 655.0 | $ | 526.9 | $ | 340.3 | $ | 409.4 | |||||||||
Ratio of earnings to fixed charges | 1.75X | 1.52X | 1.16X | (b) | (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) | — | — | — | — | 22.1 | ||||||||||||||
Fixed charges plus preferred dividends | $ | 409.7 | $ | 430.1 | $ | 455.1 | $ | 450.4 | $ | 560.6 | |||||||||
Adjusted earnings | $ | 715.9 | $ | 655.0 | $ | 526.9 | $ | 340.3 | $ | 409.4 | |||||||||
Ratio of earnings to fixed charges and preferred dividends | 1.75X | 1.52X | 1.16X | (c) | (c) |
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(a) | Interest portion of rental is estimated to be 33 percent. |
(b) | For such ratio, earnings were $110.1 million and $129.1 million less than fixed charges for the years ended December 31, 2008 and 2007, respectively. |
(c) | For such ratio, earnings were $110.1 million and $151.2 million less than fixed charges for the years ended December 31, 2008 and 2007, respectively. |