Exhibit 12
CONSOLIDATED EARNINGS RATIOS
The following table sets forth, for the years and periods indicated, Protective Life Insurance Company’s (Protective Life) ratios of:
o Consolidated earnings to fixed charges.
o Consolidated earnings to fixed charges before interest credited on investment products.
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9 Months Ended Year Ended December 31,
September 30,
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2004 2003 2003 2002 2001 2000 1999
Ratio of Consolidated Earnings to Fixed
Charges(1) 1.6 1.5 1.5 1.3 1.2 1.2 1.6
Ratio of Consolidated Earnings to Fixed
Charges Before Interest Credited on
Investment Products(2) 49.1 67.9 83.4 49.1 47.2 28.3 27.7
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| | (1) | Protective Life calculates the ratio of “Consolidated Earnings to Fixed Charges” by dividing the sum of income from continuing operations before income tax (BT), interest expense (which includes an estimate of the interest component of operating lease expense) (I) and interest credited on investment products (IP) by the sum of interest expense (I) and interest credited on investment products (IP). The formula for this ratio is: (BT+I+IP)/(I+IP). Protective Life continues to sell investment products that credit interest to the contractholder. Investment products include products such as guaranteed investment contracts, annuities, and variable universal life insurance policies. The inclusion of interest credited on investment products results in a negative impact on the ratio of earnings to fixed charges because the effect of increases in interest credited to contractholders more than offsets the effect of the increases in earnings. |
| | (2) | Protective Life calculates the ratio of “Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products” by dividing the sum of income from continuing operations before income tax (BT) and interest expense (I) by interest expense (I). The formula for this calculation, therefore, would be: (BT+I)/I. |
COMPUTATION OF CONSOLIDATED EARNINGS RATIOS
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6 Months Ended Year Ended December 31,
September 30,
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2004 2003 2003 2002 2001 2000 1999
Computation of Ratio of Consolidated
Earnings to Fixed Charges Before
Interest Credited on Investment
Products
Income from Continuing Operations
before Income Tax $ 289,133 $ 243,858 $ 349,972 $ 241,623 $ 213,958 $174,622 $186,613
Add Interest Expense 6,015 3,643 4,249 5,019 4,633 6,400 7,000
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Earnings before Interest and Taxes $ 295,148 $ 247,501 $ 354,221 $ 246,642 $ 218,591 $181,022 $193,613
Earnings before Interest and Taxes
Divided by Interest Expense 49.1 67.9 83.4 49.1 47.2 28.3 27.7
Computation of Ratio of Consolidated
Earnings to Fixed Charges
Income from Continuing Operations
before Income Tax $ 289,133 $ 243,858 $ 349,972 $ 241,623 $ 213,958 $174,622 $186,613
Add Interest Expense 6,015 3,643 4,249 5,019 4,633 6,400 7,000
Add Interest Credited on Investment
Products 480,789 494,054 647,695 900,930 944,098 766,004 331,746
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Earnings before Interest, Interest
Credited on Investment Products
and Taxes $ 775,937 $741,555 $1,001,916 $1,147,572 $1,162,689 $947,026 $525,359
Earnings before Interest, Interest
Credited on Investment Products and
Taxes Divided by Interest Expense
And Interest Credited on Investment
Products 1.6 1.5 1.5 1.3 1.2 1.2 1.6
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