Form: 10-K

Annual report [Section 13 and 15(d), not S-K Item 405]

Documents

 

Exhibit 12.1

 

PRUDENTIAL FINANCIAL, INC.

RATIO OF EARNINGS TO FIXED CHARGES

 

    

For the Year Ended December 31,

    

2002

     

2001

     

2000

   

1999

     

1998

    

(in millions)

Earnings:

                               

Income (loss) from continuing operations before income taxes

   

64

 

   

(141

)

   

723

   

2,232

 

   

2,583

Undistributed income of investees accounted for under the equity method

   

(37

)

   

29

 

   

25

   

(14

)

   

62

Interest capitalized

   

8

 

   

6

 

   

—  

   

—  

 

   

—  

    
  
  
  
  

Adjusted earnings

   

93

 

   

(176

)

   

698

   

2,246

 

   

2,521

    
  
  
  
  

Add fixed charges:

                               

Interest credited to policyholders’ account balances

   

1,846

 

   

1,804

 

   

1,751

   

1,811

 

   

1,953

Gross interest expense(1)

   

435

 

   

653

 

   

1,056

   

863

 

   

917

One-third of rental expense

   

150

 

   

173

 

   

166

   

167

 

   

167

    
  
  
  
  

Total fixed charges

   

2,431

 

   

2,630

 

   

2,973

   

2,841

 

   

3,037

    
  
  
  
  

Total earnings plus fixed charges

   

2,524

 

   

2,454

 

   

3,671

   

5,087

 

   

5,558

    
  
  
  
  

Ratio of earnings to fixed charges(2)

   

1.04

 

          

1.23

   

1.79

 

   

1.83

    
  
  
  
  
(1)   Includes Securities business related interest expense which is included in “Net investment income” in the Consolidated Statements of Operations, interest which has been capitalized and amortization of debt discounts, premiums and issue costs.
(2)   Due to the Company’s loss in 2001, the ratio coverage was less than1:1 and is therefore not presented. Additional earnings of $176 million would have been required in 2001 to achieve a ratio of 1:1.