EX-12 7 exhibit12.htm EXHIBIT 12  

 

Computation of Ratios of Earnings to Fixed Charges

 

 

 

 

 

 

Exhibit 12

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

 

 

 

(in millions, except ratios)

 

 

 

 

 

 

 

2015

 

2014

Earnings:

 

 

 

 

 

 

 

 

 

 

   Pre-tax income(a):

 

 

 

 

 

 

$

3,429

$

2,718

Add - Fixed charges

 

 

 

 

 

 

 

445

 

1,035

Adjusted Pre-tax income

 

 

 

 

 

 

$

3,874

$

3,753

Fixed charges:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

$

313

$

755

Portion of rent expense representing interest

 

 

 

 

 

 

 

45

 

32

Interest credited to policy and contract holders

 

 

 

 

 

 

 

87

 

248

Total fixed charges

 

 

 

 

 

 

$

445

$

1,035

Total fixed charges, excluding interest credited to

 

 

 

 

 

 

 

 

 

 

policy and contract holders

 

 

 

 

 

 

$

358

$

787

Ratio of earnings to fixed charges

 

 

 

 

 

 

 

8.71

 

3.63

Ratio of earnings to fixed charges, excluding interest

 

 

 

 

 

 

 

 

 

 

credited to policy and contract holders(b)

 

 

 

 

 

 

 

10.82

 

4.77

(a) From continuing operations, excluding undistributed earnings (loss) from equity method investments and capitalized interest. 

(b) The Ratio of earnings to fixed charges, excluding interest credited to policy and contract holders, removes interest credited to guaranteed investment contract (GIC) policyholders and guaranteed investment agreement (GIA) contract holders. Such interest expenses are also removed from earnings used in this calculation. GICs and GIAs are entered into by our subsidiaries. The proceeds from GICs and GIAs are invested in a diversified portfolio of securities, primarily investment grade bonds. The assets acquired yield rates greater than the rates on the related policyholders obligation or contract, with the intent of earning a profit from the spread.