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,
  
     2003
    2002
     2001
     2000
    1999
  

Earnings:

                                       

Income (loss) from continuing operations before income taxes

    $ 1,958    $ 80     $ (121 )   $ 693    $ 2,222  

Undistributed income (loss) of investees accounted for under the equity method

      119      (37 )     29       25      (14 )

Interest capitalized

      —        8       6       —        —    
    
  
 
 
  

Adjusted earnings

      1,839      109       (156 )     668      2,236  
    
  
 
 
  

Add fixed charges:

                                       

Interest credited to policyholders’ account balances

      1,830      1,846       1,804       1,751      1,811  

Gross interest expense(1)

      403      435       653       1,056      863  

Interest component of rental expense

      103      150       173       166      167  
    
  
 
 
  

Total fixed charges

      2,336      2,431       2,630       2,973      2,841  
    
  
 
 
  

Total earnings plus fixed charges

    $ 4,175    $ 2,540     $ 2,474     $ 3,641    $ 5,077  
    
  
 
 
  

Ratio of earnings to fixed charges(2)

      1.79      1.04       0.94       1.22      1.79  
    
  
 
 
  
(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 $156 million would have been required in 2001 to achieve a ratio of 1:1.