RATIO OF EARNINGS TO FIXED CHARGES
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Exhibit 12.1
PRUDENTIAL FINANCIAL, INC.
RATIO OF EARNINGS TO FIXED CHARGES
| For the Nine Months Ended |
For the Three Months Ended |
For the Year Ended December 31, | ||||||||||||||||||||||
| 2002 |
2001 |
2000 |
1999 |
1998 | ||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
| Earnings: |
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| Income (loss) from continuing operations before income taxes |
$ | 1,120 | $ | 575 | $ | 71 | $ | (165 | ) | $ | 666 | $ | 2,207 | $ | 2,557 | |||||||||
| Undistributed income (loss) of investees accounted for under the equity method |
71 | 33 | (37 | ) | 29 | 25 | (14 | ) | 62 | |||||||||||||||
| Interest capitalized |
— | — | 8 | 6 | — | — | — | |||||||||||||||||
| Adjusted earnings |
1,049 | 542 | 100 | (200 | ) | 641 | 2,221 | 2,495 | ||||||||||||||||
| Add fixed charges: |
||||||||||||||||||||||||
| Interest credited to policyholders’ account balances |
1,366 | 459 | 1,846 | 1,804 | 1,751 | 1,811 | 1,953 | |||||||||||||||||
| Gross interest expense (1) |
323 | 114 | 435 | 653 | 1,056 | 863 | 917 | |||||||||||||||||
| One-third of rental expense |
88 | 26 | 150 | 173 | 166 | 167 | 167 | |||||||||||||||||
| Total fixed charges |
1,777 | 599 | 2,431 | 2,630 | 2,973 | 2,841 | 3,037 | |||||||||||||||||
| Total earnings plus fixed charges |
$ | 2,826 | $ | 1,141 | $ | 2,531 | $ | 2,430 | $ | 3,614 | $ | 5,062 | $ | 5,532 | ||||||||||
| Ratio of earnings to fixed charges (2) |
1.59 | 1.90 | 1.04 | 0.92 | 1.22 | 1.78 | 1.82 | |||||||||||||||||
| (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 than1:1. Additional earnings of $200 million would have been required in 2001 to achieve a ratio of 1:1. |