CONSECO, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratio of Earnings to
Fixed Charges and Preferred Dividends
(Dollars in millions)
Successor Predecessor
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Four months Eight months
ended ended
December 31, August 31,
2007 2006 2005 2004 2003 2003(b)
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(Restated) (Restated)(Restated) (Restated)
Pretax income (loss) from operations:
Net income (loss)............................. $(179.9) $106.0 $312.7 $289.7 $ 96.3 $2,201.7
Add income tax expense (benefit).............. 6.9 61.2 171.6 156.4 53.2 (13.5)
Add discontinued operations................... - - - - - (16.0)
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Pretax income (loss) from operations.......... (173.0) 167.2 484.3 446.1 149.5 2,172.2
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Add fixed charges:
Interest expense on corporate debt............ 72.3 52.9 48.1 71.5 34.4 223.2
Interest expense on investment borrowings..... 45.0 20.6 10.2 8.0 2.4 8.3
Interest added to policyholder account
balances.................................... 399.5 426.8 419.9 410.4 145.5 307.9
Portion of rental (a)......................... 13.7 13.2 12.6 13.5 6.4 8.9
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Fixed charges........................... 530.5 513.5 490.8 503.4 188.7 548.3
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Adjusted earnings (loss)................ $ 357.5 $680.7 $975.1 $949.5 $338.2 $2,720.5
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Ratio of earnings to fixed charges... (c) 1.33X 1.99X 1.89X 1.79X 4.96X
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Fixed charges........................................ $ 530.5 $513.5 $490.8 $503.4 $188.7 $ 548.3
Add dividends on preferred stock, including
dividends on preferred stock of subsidiaries
(divided by the ratio of income to pretax
income)....................................... 21.7 59.9 58.9 100.9 43.2 -
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Fixed charges plus preferred dividends..... $ 552.2 $573.4 $549.7 $604.3 $231.9 $ 548.3
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Adjusted earnings (loss)...................... $ 357.5 $680.7 $975.1 $949.5 $338.2 $2,720.5
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Ratio of earnings to fixed charges and
preferred dividends........................ (d) 1.19X 1.77X 1.57X 1.46X 4.96X
= ===== ===== ===== ===== =====
<FN>
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(a) Interest portion of rental is estimated to be 33 percent.
(b) Earnings for the eight months ended August 31, 2003 included
reorganization items totaling $2,130.5 million. The reorganization
items included: (i) $3,151.4 million related to the gain on the
discharge of prepetition liabilities; (ii) $(950.0) million related to
fresh start adjustments; and (iii) $(70.9) million related to
professional fees. The ratios for the eight months ended August 31,
2003, excluding such reorganization items would be as follows: (i)
ratio of earnings to fixed charges - 1.08X; and (ii) ratio of earnings
to fixed charges excluding interest added to policyholder account
balances - 1.17X. There were no preferred stock dividends or
distributions on Company-obligated mandatorily redeemable preferred
securities of subsidiary trusts during the eight months ended August
31, 2003.
(c) For such ratio, earnings were $173.0 million less than fixed charges.
(d) For such ratio, earnings were $194.7 million less than fixed charges.
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