EX-12 6 exhibit12.htm EXHIBIT 12  

 

Computation of Ratios of Earnings to Fixed Charges

 

 

 

 

 

 

Exhibit 12

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

 

 

 

(in millions, except ratios)

 

 

 

 

 

 

 

2017

 

2016

Earnings:

 

 

 

 

 

 

 

 

 

 

   Pre-tax income(a):

 

 

 

 

 

 

$

1,629

$

46

Add - Fixed charges

 

 

 

 

 

 

 

388

 

398

Adjusted Pre-tax income

 

 

 

 

 

 

$

2,017

$

444

Fixed charges:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

$

289

$

296

Portion of rent expense representing interest

 

 

 

 

 

 

 

28

 

19

Interest credited to policy and contract holders

 

 

 

 

 

 

 

71

 

83

Total fixed charges

 

 

 

 

 

 

$

388

$

398

Total fixed charges, excluding interest credited to

 

 

 

 

 

 

 

 

 

 

policy and contract holders

 

 

 

 

 

 

$

317

$

315

Ratio of earnings to fixed charges:

 

 

 

 

 

 

 

 

 

 

Ratio

 

 

 

 

 

 

 

5.20

 

1.12

Coverage deficiency

 

 

 

 

 

 

 

n/a

 

n/a

Ratio of earnings to fixed charges, excluding interest

 

 

 

 

 

 

 

 

 

 

credited to policy and contract holders(b):

 

 

 

 

 

 

 

 

 

 

   Ratio

 

 

 

 

 

 

 

6.36

 

1.41

   Coverage deficiency

 

 

 

 

 

 

 

n/a

 

n/a

(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.