EX-12 3 exhibit12.htm EXHIBIT 12  

 

 

 

 

 

Computation of Ratios of Earnings to Fixed Charges

 

 

 

 

 

 

Exhibit 12

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

(in millions, except ratios)

 

2015

 

2014

 

 

 

2015

 

2014

Earnings:

 

 

 

 

 

 

 

 

 

 

   Pre-tax income(a):

$

2,188

$

4,223

 

 

$

5,617

$

6,051

Add - Fixed charges

 

469

 

686

 

 

 

914

 

1,722

Adjusted Pre-tax income

$

2,657

$

4,909

 

 

$

6,531

$

7,773

Fixed charges:

 

 

 

 

 

 

 

 

 

 

Interest expense

$

306

$

571

 

 

$

619

$

1,326

Portion of rent expense representing interest

 

44

 

32

 

 

 

89

 

64

Interest credited to policy and contract holders

 

119

 

83

 

 

 

206

 

332

Total fixed charges

$

469

$

686

 

 

$

914

$

1,722

Total fixed charges, excluding interest credited to

 

 

 

 

 

 

 

 

 

 

policy and contract holders

$

350

$

603

 

 

$

708

$

1,390

Ratio of earnings to fixed charges

 

5.67

 

7.16

 

 

 

7.15

 

4.51

Ratio of earnings to fixed charges, excluding interest

 

 

 

 

 

 

 

 

 

 

credited to policy and contract holders(b)

 

7.59

 

8.14

 

 

 

9.22

 

5.59

(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.

 

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