-273- LINCOLN NATIONAL CORPORATION EXHIBIT 12 - HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES Year Ended December 31, (millions of dollars) 1996 1995 1994 1993 1992 Net Income before Taxes, Accounting Change and Minority Interests ------ 712.3 626.6 376.3 587.8 424.7 Equity Loss (Earnings) in Unconsolidated Affiliates ---------- 1.4 12.4 14.6 -- (.2) Sub-total of Fixed Charges ---------- . 94.4 66.6 62.9 74.6 Sub-total of Adjusted Net Income - 819.5 708.6 428.3 650.7 499.5 Interest on Annuities & Financial Products ----------------- 1435.6 1400.0 1359.0 1315.8 1261.7 Adjusted Income Base ------------- 2255.1 2108.6 1787.3 1966.5 1761.2 Rent Expense ------------------------ 71.6 65.6 51.4 55.8 67.4 Fixed Charges: Interest and Debt Expense ----------- 84.7 72.5 49.5 44.3 53.8 Rent (Pro-rated) -------------------- 23.9 21.9 17.1 18.6 20.8 Sub-total of Fixed Charges ------- 108.6 94.4 66.6 62.9 74.6 Interest on Annuities & Financial Products ----------------- 1435.6 1400.0 1359.0 1315.8 1261.7 Sub-total of Fixed Charges ------- 1544.2 1494.4 1425.6 1378.7 1336.3 Preferred Dividends (Pre-tax) ------- .1 8.7 24.2 24.2 20.3 Total Fixed Charges -------------- 1544.3 1503.1 1449.8 1402.9 1356.6 Ratio of Earnings to Fixed Charges: Excluding Interest on Annuities and Financial Products (1) ---------------------- 7.55 7.51 6.43 10.35 6.69 Including Interest on Annuities and Financial Products (2) ---------------------- 1.46 1.41 1.25 1.43 1.32 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (3) --------------------- 1.46 1.40 1.23 1.40 1.30 (1) For purposes of determining this ratio, earnings consist of income before federal income taxes, cumulative effect of accounting change and minority interests adjusted for the difference between income or losses from unconsolidated equity investments and cash distributions from such investments, plus fixed charges. Fixed charges consist of 1) interest and debt expense on short and long-term debt and distributions to minority interest-preferred securities of subsidiary companies and 2) the portion of operating leases that are representative of the interest factor. (2) Same as the ratio of earnings to fixed charges, excluding interest on annuities and financial products, except fixed charges and earnings include interest on annuities and financial products. (3) Same as the ratio of earnings to fixed charges, including interest on annuities and financial products, except that fixed charges include the pre-tax earnings required to cover preferred stock dividend requirements.