RATIO OF EARNINGS TO FIXED CHARGES
Published on
Exhibit 12.1
PRUDENTIAL FINANCIAL, INC.
RATIO OF EARNINGS TO FIXED CHARGES
| For the Six Months Ended June 30, 2003 |
For the Three Months Ended June 30, 2003 |
For the Year Ended December 31, | ||||||||||||||||||||||
| 2002 |
2001 |
2000 |
1999 |
1998 | ||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
| Earnings: |
||||||||||||||||||||||||
| Income from continuing operations before income taxes |
$ | 549 | $ | 226 | $ | 81 | $ | (154 | ) | $ | 717 | $ | 2,232 | $ | 2,583 | |||||||||
| Undistributed income of investees accounted for under the equity method |
38 | 22 | (37 | ) | 29 | 25 | (14 | ) | 62 | |||||||||||||||
| Interest capitalized |
— | — | 8 | 6 | — | — | — | |||||||||||||||||
| Adjusted earnings |
511 | 204 | 110 | (189 | ) | 692 | 2,246 | 2,521 | ||||||||||||||||
| Add fixed charges: |
||||||||||||||||||||||||
| Interest credited to policyholders’ account balances |
907 | 455 | 1,846 | 1,804 | 1,751 | 1,811 | 1,953 | |||||||||||||||||
| Gross interest expense (1) |
186 | 91 | 435 | 653 | 1,056 | 863 | 917 | |||||||||||||||||
| One-third of rental expense |
62 | 29 | 150 | 173 | 166 | 167 | 167 | |||||||||||||||||
| Total fixed charges |
1,155 | 575 | 2,431 | 2,630 | 2,973 | 2,841 | 3,037 | |||||||||||||||||
| Total earnings plus fixed charges |
$ | 1,666 | $ | 779 | $ | 2,541 | $ | 2,441 | $ | 3,665 | $ | 5,087 | $ | 5,558 | ||||||||||
| Ratio of earnings to fixed charges (2) |
1.44 | 1.35 | 1.05 | 0.93 | 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 and premiums. |
| (2) | Due to the Company’s loss in 2001, the ratio coverage was less than 1:1. Additional earnings of $189 million would have been required in 2001 to achieve a ratio of 1:1. |