SEC Info - Prudential PLC - ‘F-3ASR’ on 10/3/14

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Prudential PLC – ‘F-3ASR’ on 10/3/14 – EX-12

On: Friday, 10/3/14, at 2:17pm ET · Effective: 10/3/14 · Accession #: 1193125-14-363168 · File #: 333-199148

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

10/03/14  Prudential PLC                    F-3ASR     10/03/14    8:994K                                   RR Donnelley/FA

Automatic Shelf Registration Statement for Securities of a Well-Known Seasoned Foreign Private Issuer — Form F-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: F-3ASR      Form F-3                                            HTML    344K 
 2: EX-1        Underwriting Agreement                              HTML    203K 
 3: EX-5.1      Opinion re: Legality                                HTML     19K 
 4: EX-5.2      Opinion re: Legality                                HTML     46K 
 5: EX-12       Statement re: Computation of Ratios                 HTML     52K 
 6: EX-23.1     Consent of Experts or Counsel                       HTML      8K 
 7: EX-25.1     Statement re: Eligibility of Trustee                HTML     71K 
 8: EX-25.2     Statement re: Eligibility of Trustee                HTML     68K

EX-12 — Statement re: Computation of Ratios

This exhibit is an HTML Document rendered as filed. [ Alternative Formats ]

EX-12

Exhibit 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our ratio of earnings to fixed charges for each of the periods indicated using financial information calculated in accordance with IFRS:


	HISTORICAL BASIS																		SUPPLEMENTAL BASIS
	Period Ended June 30,			Years Ended December 31,															Period Ended June 30,			Years Ended December 31,
	2014			2013			2012			2011			2010			2009			2014			2013			2012			2011			2010			2009
	IFRS																		IFRS
	(In £ millions, except ratios)
Profit for continuing operations before tax (before non-controlling interests)		1,708			2,082			3,117			1,859			1,890			1,482
Profit for continuing operations before tax attributable to shareholders (before non-controlling interests)																				1,424			1,635			2,747			1,866			1,283			653
Less:
Share of profits from joint ventures and associates accounted for under the equity method (for shareholder-backed business)		(81	)		(64	)		(108	)		(53	)		(64	)		(29	)		(81	)		(64	)		(108	)		(53	)		(64	)		(29	)
Add:
Fixed charges		269			497			492			484			455			396			211			384			369			359			340			261
Dividends from joint ventures and associates accounted for under the equity method (for shareholder-backed business)		34			48			31			22			12			9			34			48			31			22			12			9

Earnings⁽¹⁾		1,930			2,563			3,532			2,312			2,293			1,858			1,588			2,003			3,039			2,194			1,571			894

Fixed charges:
Interest payable on core structural borrowings⁽²⁾		170			305			280			286			257			209			170			305			280			286			257			209
Interest on other borrowings relating to shareholder financed business⁽³⁾		41			78			89			70			77			32			41			79			89			73			83			52
Interest relating to with-profits business⁽⁴⁾		31			62			50			46			25			33
Product interest⁽⁵⁾		27			52			73			82			96			122

Fixed Charges		269			497			492			484			455			396			211			384			369			359			340			261

Ratio of Earnings to Fixed Charges		7.2			5.2			7.2			4.8			5.0			4.7			7.5			5.2			8.2			6.1			4.6			3.4

Earnings in Excess of (less than) Fixed Charges		1,661			2,066			3,040			1,828			1,838			1,462			1,377			1,619			2,670			1,835			1,231			633

Notes:

(1)

For the purposes of calculating the ratios, earnings on both the historical and supplemental bases represent profit from continuing operations before tax, non-controlling interests and share of profits from equity method accounted joint ventures and associates plus fixed charges and distributed income from equity method accounted joint ventures and associates.

On the historical basis, the profit included in earnings represents profit from continuing operations before tax (being tax attributable to shareholders’ and policyholders’ returns). On the supplemental basis, the profit included in earnings represents profit from continuing operations before tax attributable to shareholders.

(2)	Core structural borrowings comprise those borrowings required to support Prudential’s main business activities.

(3)	Interest on other borrowings relating to shareholder-financed business includes:

(a)

interest on commercial paper, floating and medium term notes supporting a short-term fixed income securities reinvestment program.

(b)

interest on lease payments for property. Given the complexities of calculating the interest on lease payments, it has been assumed that 1/3 of the total lease payments represent interest.

(c)

interest on borrowings whose repayment to the lender is contingent on future surpluses emerging from certain contracts specified under the arrangement.

(d)

interest on senior debt issued through the Federal Home Loan Bank of Indianapolis, secured by collateral posted by Jackson National Life Insurance Company (“Jackson”).

(e)

interest payable on non-recourse borrowings of investment funds managed by PPM America and of Piedmont, which are consolidated as if they were subsidiaries, as a result of our effective control of the funds.

(4)	Interest relating to with-profits business includes:

(a)

interest on other bank loans and overdrafts.

(b)

interest on non-recourse borrowings of investment, property and venture fund subsidiaries, primarily investments of The Prudential Assurance Company’s (“PAC”) with-profit fund, which are consolidated as if they were subsidiaries as a result of the our effective control of our effective control of these investments.

(c)

interest on lease payments for property. Given the complexities of calculating the interest on lease payments, it has been assumed that 1/3 of the total lease payments represent interest.

(d)

interest on debt held in the Scottish Amicable Insurance Fund (“SAIF”), a ring-fenced sub-fund of PAC in which shareholders have no interest.

On the IFRS supplemental bases, the above items have been excluded as these charges have no direct impact on profit before tax attributable to shareholders. The nature and operation of the profit sharing arrangement between policyholders and shareholders regarding results of the with-profits funds business is distinctive to the UK and certain Asian operations. Separate legally ring-fenced funds are maintained in our group companies having with-profits business. Shareholder funds are only entitled to receive profit distributions from the with-profits funds as a function of profit participation bonuses distributed or credited to policyholders. In the case of the SAIF, shareholders are not entitled to any profit from the fund other than investment management fees. Earnings from with-profits business are recognized only when with-profits bonuses are declared and the shareholders’ share of bonuses is transferred to the shareholders’ equity. Fixed charges incurred by with-profits funds do not directly impact the level of bonuses, and therefore do not directly impact earnings.

(5)

Product interest includes interest on wholesale funding arrangements entered into by Jackson. These funding arrangements are similar in substance to guaranteed investment contracts (“GICs”) and, as such, the interest expense is akin to interest credited on policyholders’ accounts. In addition, product interest also includes interest credited on account values of policyholders for GICs and annuity certain products of Jackson which are investment contracts without discretionary participation features under IFRS 4. Interest credited on other IFRS 4 “investment contracts without discretionary participation feature”, which are more similar to a policyholder share of investment returns for mostly unit-linked (but not separate account) business with insignificant insurance risk, have been excluded. On a supplemental basis all product interest has been excluded.

The SEC neither requires nor encourages the presentation of supplemental ratios of earnings to fixed charges.

Dates Referenced Herein and Documents Incorporated by Reference

This ‘F-3ASR’ Filing	Date	Other Filings

	12/31/14
Filed on / Effective on:	10/3/14	F-N
		List all Filings

1 Subsequent Filing that References this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/11/20  Prudential plc                    F-3ASR      8/11/20    6:1.6M                                   Toppan Merrill-FA

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Filing Submission 0001193125-14-363168 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)