Exhibit 12
CONSOLIDATED EARNINGS RATIOS
The following table sets forth, for the years and periods ended, Protective Life Insurance Company’s (the “Company”) ratios of:
· Consolidated earnings to fixed charges.
· Consolidated earnings to fixed charges before interest credited on investment products.
|
| | | | | | | | | | | | | | | | | | | | | |
| | | Successor Company | | Predecessor Company |
| | | For The Six Months Ended | | For The Year Ended | | February 1, 2015 | | January 1, 2015 | | |
| | | June 30, | | December 31, | | to | | to | | For The Year Ended |
| | | 2018 | | 2017 | | 2017 | | 2016 | | December 31, 2015 | | January 31, 2015 | | December 31, 2014 |
Ratio of Consolidated Earnings to Fixed Charges(1) | | 1.2 |
| | 1.5 |
| | 1.5 |
| | 1.6 |
| | 1.3 |
| | 2.5 |
| | 1.8 |
|
Ratio of Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products(2) | | 1.9 |
| | 3.5 |
| | 3.6 |
| | 4.0 |
| | 3.3 |
| | 13.9 |
| | 7.0 |
|
(1)The Company 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). The Company continues to sell investment products that credit interest to the contract holder. Investment products include products such as guaranteed investment contracts, annuities, and variable universal life interest credited 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 contract holders more than offsets the effect of the increase in earnings.
(2)The Company 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
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Successor Company | | Predecessor Company |
| | | For The Six Months Ended | | For The Year Ended | | February 1, 2015 | | January 1, 2015 | | |
| | | June 30, | | December 31, | | to | | to | | For The Year Ended |
| | | 2018 | | 2017 | | 2017 | | 2016 | | December 31, 2015 | | January 31, 2015 | | December 31, 2014 |
| | | (Dollars In Thousands, Except Ratio Data) | | (Dollars In Thousands, Except Ratio Data) |
| Computation of Ratio of Consolidated Earnings to Fixed Charges | | | | | | | | | | | | | | |
|
| Income from Continuing Operations before Income Tax | | $ | 82,830 |
| | $ | 219,930 |
| | $ | 464,008 |
| | $ | 522,681 |
| | $ | 254,188 |
| | $ | 132,847 |
| | $ | 738,789 |
|
| Add Interest Expense | | 93,670 |
| | 89,585 |
| | 181,584 |
| | 174,550 |
| | 109,780 |
| | 10,265 |
| | 122,152 |
|
| Add Interest Credited on Investment Products | | 389,009 |
| | 326,949 |
| | 692,993 |
| | 699,227 |
| | 682,836 |
| | 79,088 |
| | 824,418 |
|
| Earnings before Interest, Interest Credited on Investment Products and Taxes | | $ | 565,509 |
| | $ | 636,464 |
| | $ | 1,338,585 |
| | $ | 1,396,458 |
| | $ | 1,046,804 |
| | $ | 222,200 |
| | $ | 1,685,359 |
|
| Earnings before Interest, Interest Credited on Investment Products and Taxes Divided by Interest expense and Interest Credited on Investment Products | | 1.2 |
| | 1.5 |
| | 1.5 |
| | 1.6 |
| | 1.3 |
| | 2.5 |
| | 1.8 |
|
| Computation of Ratio of Consolidated Earnings to Fixed Charges Before Interest Credited on Investment Products | | | | | | | | | | | | | | |
|
| Income from Continuing Operations before Income Tax | | $ | 82,830 |
| | $ | 219,930 |
| | $ | 464,008 |
| | $ | 522,681 |
| | $ | 254,188 |
| | $ | 132,847 |
| | $ | 738,789 |
|
| Add Interest Expense | | 93,670 |
| | 89,585 |
| | 181,584 |
| | 174,550 |
| | 109,780 |
| | 10,265 |
| | 122,152 |
|
| Earnings before Interest and Taxes | | $ | 176,500 |
| | $ | 309,515 |
| | $ | 645,592 |
| | $ | 697,231 |
| | $ | 363,968 |
| | $ | 143,112 |
| | $ | 860,941 |
|
| Earnings before Interest and Taxes Divided by Interest Expense | | 1.9 |
| | 3.5 |
| | 3.6 |
| | 4.0 |
| | 3.3 |
| | 13.9 |
| | 7.0 |
|
