EXHIBIT 12.1
Computation of Ratio of Earnings to Fixed Charges
For purposes of computing the following ratios, earnings consist of net income before income tax expense plus fixed charges to the
extent that such charges are included in the determination of earnings. Fixed charges consist of interest costs plus one-third of
minimum rental payments under operating leases (estimated by management to be the interest factor of such rentals).
For the Six months
ended June 30, For then twelve months ended
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2003 2002 2002 2001 2000 1999 1998
Earnings $246,284 $129,844 $190,302 $(160,482) $142,307 $ 94,755 $266,306
Add:
Income taxes 5,700 251 2,661 (69,307) (43,738) (43,784) 10,746
Fixed charges:
Interest expense 6,426 6,427 12,960 13,044 13,029 12,903 1,051
Interest credited to life policyholders (1) 12,409 7,854 19,679 17,364 17,691 10,052 4,214
Interest credited to retrocessionnaires on funds
held on reinsurance treaties 269 521 1,180 1,098 942 1,378 1,282
One third of rental payments 2,557 2,160 4,528 3,751 3,070 2,800 1,900
Distributions related to Trust Preferred and
Mandatorily Redeemable Preferred Securities,
net of applicable 10,865 10,865 21,730 2,311 - - -
Earnings before income taxes and fixed charges $284,510 $157,922 $253,040 $(192,221) $133,302 $ 78,104 $285,499
======== ======== ======== ========= ======== ======== ========
Fixed charges:
Interest expense 6,426 6,427 12,960 13,044 13,029 12,903 1,051
Interest credited to life policyholders (1) 12,409 7,854 19,679 17,364 17,691 10,052 4,214
Interest credited to retrocessionnaires on funds
held on reinsurance treaties 269 521 1,180 1,098 942 1,378 1,282
One third of rental payments 2,557 2,160 4,528 3,751 3,070 2,800 1,900
Total fixed charges 21,661 16,962 38,347 35,257 34,733 27,133 8,447
Preference share dividends (2) 19,567 10,000 20,000 20,000 20,000 20,000 20,000
Distributions related to Trust Preferred and
Mandatorily Redeemable Preferred Securities,
net of applicable taxes 10,865 10,865 21,730 2,311 - - -
Total fixed charges $ 52,093 $ 37,827 $ 80,077 $ 57,568 $ 54,733 $ 47,133 $ 28,447
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 13.13 9.31 6.60 NM (3) 3.84 2.88 33.80
======== ======== ======== ======== ======== ======== ========
Deficiency of earnings to fixed charges (4) $ 227.5
========
Ratio of earnings to combined fixed
charges and preference share dividends 5.46 4.17 3.16 NM (3) 2.44 1.66 10.04
======== ======== ======== ======== ======== ======== ========
Deficiency of earnings to combined fixed
charges and preference share dividends (4) $ 249.8
========
(1) Represents interest credited to policyholders on certain life reinsurance treaties for which the Company earns
compensating interest income.
(2) Dividends have not been tax effected because they are presumed to be paid out of a Bermuda entity whose tax rate is
zero.
(3) NM: Not meaningful. The ratios for the 2001 periods above are not meaningful due to the net loss which PartnerRe
reported for 2001, which included losses related to the terrorist attacks of September 11, 2001.
(4) Represents additional earnings that would be necessary to result in a one-to-one coverage ratio. Expressed in millions
of U.S. dollars.
Computation of Ratio of Earnings to Fixed Charges
PROFORMA BASIS ASSUMING ADOPTION OF FIN 46
For purposes of computing the following ratios, earnings consist of net income
before income tax expense plus fixed charges to the extent that such charges are
included in the determination of earnings. Fixed charges consist of interest
costs plus one-third of minimum rental payments under operating leases
(estimated by management to be the interest factor of such rentals).
For the six months
ended June 30, For the twelve months ended
-------------------- -------------------------------------------------------
2003 2002 2002 2001 2000 1999 1998
Earnings $ 246,284 $ 129,844 $ 190,302 $ (160,482) $ 142,307 $ 94,755 $ 266,306
Add:
Income taxes 5,700 251 2,661 (69,307) (43,738) (43,784) 10,746
Fixed charges:
Interest expense 12,156 12,157 24,420 14,071 13,029 12,903 1,051
Interest on junior subordinated debt 7,900 7,900 15,800 1,975
Interest credited to life policyholders (1) 12,409 7,854 19,679 17,364 17,691 10,052 4,214
Interest credited to retrocessionnaires on
funds held on reinsurance treaties 269 521 1,180 1,098 942 1,378 1,282
One third of rental payments 2,557 2,160 4,528 3,751 3,070 2,800 1,900
Distributions related to Mandatorily
Redeemable Preferred Securities,
net of applicable taxes - - - - - - -
Earnings before income taxes and fixed charges $ 287,275 $ 160,687 $ 258,570 $ (191,530) $ 133,302 $ 78,104 $ 285,499
========= ========= ========= ========== ========= ======== =========
Fixed charges:
Interest expense 12,156 12,157 24,420 14,071 13,029 12,903 1,051
Interest on junior subordinated debt 7,900 7,900 15,800 1,975
Interest credited to life policyholders (1) 12,409 7,854 19,679 17,364 17,691 10,052 4,214
Interest credited to retrocessionnaires on
funds held on reinsurance treaties 269 521 1,180 1,098 942 1,378 1,282
One third of rental payments 2,557 2,160 4,528 3,751 3,070 2,800 1,900
Total fixed charges 35,291 30,592 65,607 38,259 34,733 27,133 8,447
Preference share dividends (2) 19,567 10,000 20,000 20,000 20,000 20,000 20,000
Distributions related to Mandatorily
Redeemable Preferred Securities,
net of applicable taxes - - - - - - -
Total fixed charges $ 54,858 $ 40,592 $ 85,607 $ 58,259 $ 54,733 $ 47,133 $ 28,447
========= ========= ========= ========== ========= ======== =========
Ratio of earnings to fixed charges 8.14 5.25 3.94 NM(3) 3.84 2.88 33.80
========= ========= ========= ========== ========= ======== =========
Deficiency of earnings to fixed charges (4) $ 229.8
==========
Ratio of earnings to combined fixed
charges and preference share dividends 5.24 3.96 3.02 NM(3) 2.44 1.66 10.04
========= ========= ========= ========== ========= ======== =========
Deficiency of earnings to combined fixed
charges and preference share dividends (4) $ 249.8
==========
(1) Represents interest credited to policyholders on certain life reinsurance
treaties for which the Company earns compensating interest income.
(2) Dividends have not been tax effected because they are presumed to be paid
out of a Bermuda entity whose tax rate is zero.
(3) NM: Not meaningful. The ratios for the 2001 periods above are not
meaningful due to the net loss which PartnerRe reported for 2001, which
included losses related to the terrorist attacks of September 11, 2001.
(4) Represents additional earnings that would be necessary to result in a
one-to-one coverage ratio. Expressed in millions of U.S. dollars.