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LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES
EXHIBIT 12 - HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES
Six Months
Ended June 30 Year Ended December 31
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(millions of dollars) 2000 1999 1999 1998 1997(4) 1996 1995
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<S> <C> <C> <C> <C> <C> <C> <C>
Net Income before Federal
Income Taxes $457.6 $406.2 $570.0 $697.4 $1,427.1 $692.7 $626.6
Equity Loss (Earnings) in
Unconsolidated Affiliates 2.6 (2.7) (5.8) (3.3) (2.1) (1.4) (12.4)
Sub-total of Fixed Charges 85.3 79.2 160.9 144.1 113.3 108.6 94.4
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Sub-total of Adjusted
Net Income 545.5 482.7 725.1 838.2 1,538.3 799.9 708.6
Interest on Annuities &
Financial Products 740.7 752.2 1,510.4 1,446.2 1,253.5 1,185.6 1,147.1
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Adjusted Income Base 1,286.2 1,234.9 2,235.5 2,284.4 2,791.8 1,985.5 1,855.7
Rent Expense 40.7 40.6 81.5 81.3 62.5 71.6 65.6
Fixed Charges:
Interest and Debt Expense 71.7 65.7 133.7 117.1 92.5 84.7 72.5
Rent (Pro-rated) 13.6 13.5 27.2 27.0 20.8 23.9 21.9
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Sub-total of Fixed Charges 85.3 79.2 160.9 144.1 113.3 108.6 94.4
Interest on Annuities &
Financial Products 740.7 752.2 1,510.4 1,446.2 1,253.5 1,185.6 1,147.1
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Sub-total of Fixed Charges 826.0 $831.4 1,671.3 1,590.3 1,366.8 1,294.2 1,241.5
Preferred Dividends (Pre-tax) * * 0.1 0.1 0.2 0.2 13.4
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Total Fixed Charges $826.0 $831.4 $1,671.4 $1,590.4 $1,367.0 $1,294.4 $1,254.9
*Less than $100,000
Ratio of Earnings to Fixed Charges:
Excluding Interest on
Annuities and Financial
Products (1) 6.40 6.09 4.51 5.82 13.57 7.37 7.51
Including Interest on
Annuities and Financial
Products (2) 1.56 1.49 1.34 1.44 2.04 1.53 1.49
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends (3) 1.56 1.49 1.34 1.44 2.04 1.53 1.48
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(1) For purposes of determining this ratio, earnings consist of income
before federal income taxes 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.
(4) The coverage ratios for the year 1997 are higher than the other periods
shown due to the inclusion of the gain on sale of a major subsidiary in net
income.
