EX-12 3 exhibit12.htm EX-12  

 

Computation of Ratios of Earnings to Fixed Charges

 

 

 

 

 

Exhibit 12

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

(in millions, except ratios)

 

 

 

2018

 

2017

Earnings:

 

 

 

 

 

 

   Pre-tax income(a):

 

 

$

1,122

$

1,629

Add - Fixed charges

 

 

 

374

 

388

Adjusted Pre-tax income

 

 

$

1,496

$

2,017

Fixed charges:

 

 

 

 

 

 

Interest expense

 

 

$

275

$

289

Portion of rent expense representing interest

 

 

 

23

 

28

Interest credited to policy and contract holders

 

 

 

76

 

71

Total fixed charges

 

 

$

374

$

388

Total fixed charges, excluding interest credited to

 

 

 

 

 

 

policy and contract holders

 

 

$

298

$

317

Ratio of earnings to fixed charges

 

 

 

4.00

 

5.20

Ratio of earnings to fixed charges, excluding interest

 

 

 

 

 

 

credited to policy and contract holders(b)

 

 

 

5.02

 

6.36

(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.