EX-12 3 Exhibit12.htm EX-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)

 

2014

 

2013

 

 

 

2014

 

2013

Earnings:

 

 

 

 

 

 

 

 

 

 

   Pre-tax income(a):

$

 4,223 

$

 2,970 

 

 

$

 6,051 

$

 5,296 

Add - Fixed charges

 

 686 

 

 1,122 

 

 

 

 1,721 

 

 2,236 

Adjusted Pre-tax income

$

 4,909 

$

 4,092 

 

 

$

 7,772 

$

 7,532 

Fixed charges:

 

 

 

 

 

 

 

 

 

 

Interest expense

$

 571 

$

 836 

 

 

$

 1,326 

$

 1,734 

Portion of rent expense representing interest

 

 32 

 

 34 

 

 

 

 64 

 

 68 

Interest credited to policy and contract holders

 

 83 

 

 252 

 

 

 

 332 

 

 434 

Total fixed charges

$

 686 

$

 1,122 

 

 

$

 1,722 

$

 2,236 

Total fixed charges, excluding interest credited to

 

 

 

 

 

 

 

 

 

 

policy and contract holders

$

 603 

$

 870 

 

 

$

 1,390 

$

 1,802 

Ratio of earnings to fixed charges

 

 7.16 

 

 3.65 

 

 

 

 4.51 

 

 3.37 

Ratio of earnings to fixed charges, excluding interest

 

 

 

 

 

 

 

 

 

 

credited to policy and contract holders(b)

 

 8.14 

 

 4.70 

 

 

 

 5.59 

 

 4.18 

(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.