CONSECO, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts
(Dollars in millions)
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- ---------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- -------- ------
Pretax income from operations:
Net income.................................... $ 413.1 $330.5 $ 470.9 $ 452.2 $ 866.4 $ 712.3 $ 203.0
Add income tax expense........................ 307.1 231.2 240.7 302.2 560.1 456.0 287.1
Add extraordinary charge on
extinguishment of debt...................... 11.9 4.0 2.1 26.5 6.9 6.2 42.6
Add minority interest......................... 78.2 59.0 109.0 34.9 52.3 37.9 60.4
Less equity in undistributed
earnings of CCP Insurance, Inc.............. (36.6) (23.8) - - - - -
Less equity in undistributed
earnings of Western National Corp........... - (37.2) - - - - -
-------- ------ -------- -------- -------- -------- --------
Pretax income........................... 773.7 563.7 822.7 815.8 1,485.7 1,212.4 593.1
-------- ------ -------- -------- -------- -------- --------
Add fixed charges:
Interest expense on annuities and financial
products................................... 408.5 134.7 585.4 668.6 697.1 524.6 553.9
Interest expense:
Corporate................................... 58.0 59.3 119.4 108.1 109.4 76.0 120.6
Finance..................................... 51.2 41.6 57.3 70.1 160.9 111.4 160.3
Investment borrowings....................... 10.6 7.7 22.2 22.0 42.0 17.7 51.9
Other ....................................... .6 .9 1.0 .9 .7 .6 .4
Portion of rental(1).......................... 5.4 7.9 8.9 10.9 13.7 10.1 11.0
-------- ------ -------- -------- -------- -------- --------
Fixed charges............................. 534.3 252.1 794.2 880.6 1,023.8 740.4 898.1
-------- ------ -------- -------- -------- -------- --------
Adjusted earnings......................... $1,308.0 $815.8 $1,616.9 $1,696.4 $2,509.5 $1,952.8 $1,491.2
======== ====== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges........ 2.45X 3.24X 2.04X 1.93X 2.45X 2.64X 1.66X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
excluding interest on annuities and
financial product policyholder account
balances and interest expense on debt
related to finance receivables and
other investments................. .... 13.09X 9.28X 7.36X 7.80X 13.00X 14.98X 5.49X
====== ===== ===== ===== ====== ====== =====
Ratio of earnings (excluding nonrecurring
charge related to Green Tree of $688.0
million) to fixed charges.............. 2.43X
=====
Ratio of earnings (excluding nonrecurring
charge related to Green Tree of $688.0
million) to fixed charges, excluding
interest on annuities and financial
product policyholder account balances
and interest expense on debt related
to finance receivables and other
investments............................ 10.71X
======
(continued on following page)
CONSECO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts, continued
(Dollars in millions)
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- ---------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- ------- -------
Fixed charges................................. $534.3 $252.1 $ 794.2 $ 880.6 $1,023.8 $740.4 $898.1
Add dividends on preferred stock, including
dividends on preferred stock of subsidiaries
(divided by the rate of income before
minority interest and extraordinary
charge to pretax income).................... 35.3 34.8 40.3 57.6 40.4 37.2 11.6
Add distributions on Company-obligated
mandatorily redeemable preferred securities
of subsidiary trusts........................ - - - 5.5 75.4 53.3 92.2
-------- ------ -------- -------- -------- -------- --------
Fixed charges............................. $ 569.6 $286.9 $ 834.5 $ 943.7 $1,139.6 $ 830.9 $1,001.9
======== ====== ======== ======== ======== ======== ========
Adjusted earnings......................... $1,308.0 $815.8 $1,616.9 $1,696.4 $2,509.5 $1,952.8 $1,491.2
======== ====== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities
of subsidiary trusts................... 2.30X 2.84X 1.94X 1.80X 2.20X 2.35X 1.49X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts, excluding interest
on annuities and financial product
policyholder account balances and
interest expense on debt related to
finance receivables and other
investments........................... 8.44X 6.14X 5.61X 5.11X 6.72X 7.33X 3.08X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings (excluding nonrecurring
charge related to Green Tree of $688.0
million) to fixed charges, preferred
dividends and distributions on Company-
obligated mandatorily redeemable
preferred securities of subsidiary
trusts................................. 2.18X
=====
Ratio of earnings (excluding nonrecurring
charge related to Green Tree of $688.0
million) to fixed charges, preferred
dividends and distributions on Company-
obligated mandatorily redeemable
preferred securities of subsidiary trusts,
excluding interest on annuities and
financial product policyholder account
balances and interest expense on debt
related to finance receivables and
other investments...................... 5.99X
=====
<FN>
(1) Interest portion of rental is assumed to be 33 percent.
</FN>