EX-12 3 exhibit12.htm EX-12 (a)

 

Computation of Ratios of Earnings to Fixed Charges

 

 

 

 

 

 

Exhibit 12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

 

 

(in millions, except ratios)

 

 

 

 

 

 

 

2017

 

2016

 

2015

 

2014

 

2013

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Pre-tax income (loss)(a):

 

 

 

 

 

 

$

1,095

$

(109)

$

2,471

$

9,106

$

7,942

   Add — Fixed charges

 

 

 

 

 

 

 

1,538

 

1,656

 

1,716

 

2,911

 

4,279

   Pre-tax income , excluding fixed charges

 

 

 

 

 

 

$

2,633

$

1,547

$

4,187

$

12,017

$

12,221

Fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Interest expense

 

 

 

 

 

 

$

1,149

$

1,220

$

1,227

$

2,034

$

3,292

   Portion of rent expense representing interest

 

 

 

 

 

 

 

90

 

110

 

109

 

157

 

138

   Interest credited to policy and contract holders

 

 

 

 

 

 

 

299

 

326

 

380

 

720

 

849

Total fixed charges

 

 

 

 

 

 

$

1,538

$

1,656

$

1,716

$

2,911

$

4,279

Total fixed charges, excluding interest credited to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   policy and contract holders

 

 

 

 

 

 

$

1,239

$

1,330

$

1,336

$

2,191

$

3,430

Ratio of earnings to fixed charges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Ratio

 

 

 

 

 

 

 

1.71

 

n/a

 

2.44

 

4.13

 

2.86

   Coverage deficiency

 

 

 

 

 

 

 

n/a

$

(109)

 

n/a

 

n/a

 

n/a

Ratio of earnings to fixed charges, excluding interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   credited to policy and contract holders(b):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Ratio

 

 

 

 

 

 

 

2.13

 

1.16

 

3.13

 

5.48

 

3.56

   Coverage deficiency

 

 

 

 

 

 

 

n/a

 

n/a

 

n/a

 

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.