LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES
HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
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| For the Years Ended December 31, | |||||||||||||
| 2013 |
| 2012 |
| 2011 |
| 2010 |
| 2009 | |||||
Income (loss) from continuing operations before taxes | $ | 1,631 |
| $ | 1,568 |
| $ | 503 |
| $ | 1,135 |
| $ | (673) |
Sub-total of fixed charges |
| 279 |
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| 282 |
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| 308 |
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| 307 |
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| 292 |
Sub-total of adjusted income (loss) |
| 1,910 |
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| 1,850 |
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| 811 |
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| 1,442 |
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| (381) |
Interest on annuities and financial products |
| 2,486 |
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| 2,478 |
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| 2,488 |
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| 2,499 |
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| 2,513 |
Adjusted income (loss) base | $ | 4,396 |
| $ | 4,328 |
| $ | 3,299 |
| $ | 3,941 |
| $ | 2,132 |
Fixed Charges |
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Interest and debt expense (1) | $ | 265 |
| $ | 268 |
| $ | 286 |
| $ | 286 |
| $ | 261 |
Interest expense related to uncertain tax positions |
| 2 |
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| 1 |
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| 9 |
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| 7 |
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| 13 |
Portion of rent expense representing interest |
| 12 |
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| 13 |
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| 13 |
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| 14 |
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| 18 |
Sub-total of fixed charges excluding interest on |
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annuities and financial products |
| 279 |
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| 282 |
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| 308 |
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| 307 |
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| 292 |
Interest on annuities and financial products |
| 2,486 |
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| 2,478 |
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| 2,488 |
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| 2,499 |
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| 2,513 |
Total fixed charges | $ | 2,765 |
| $ | 2,760 |
| $ | 2,796 |
| $ | 2,806 |
| $ | 2,805 |
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Ratio of sub-total of adjusted income (loss) to sub-total |
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of fixed charges excluding interest on annuities and |
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financial products (2) |
| 6.85 |
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| 6.56 |
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| 2.63 |
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| 4.70 |
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| NM |
Ratio of adjusted income (loss) base to total fixed |
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charges (2) |
| 1.59 |
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| 1.57 |
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| 1.18 |
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| 1.40 |
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| NM |
(1) | Interest and debt expense excludes a $5 million loss, $8 million loss, $5 million loss and $64 million gain related to the early retirement of debt in 2012, 2011, 2010 and 2009, respectively. |
(2) | The ratio of earnings to fixed charges for the year ended December 31, 2009, indicated less than one-to-one coverage and is therefore not presented. Additional earnings of $673 million would have been required for the year ended December 31, 2009, to achieve a ratio of one-to-one coverage. |