STATEMENT OF 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, 2005 |
For the Three Months Ended June 30, 2005 |
Year Ended December 31, | |||||||||||||||||||||
| 2004 |
2003 |
2002 |
2001 |
2000 | |||||||||||||||||||
| ($ in millions) | |||||||||||||||||||||||
| Earnings: |
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| Income (loss) from continuing operations before income taxes, extraordinary gain on acquisition and cumulative effect of accounting change |
$ | 2,634 | $ | 1,316 | $ | 3,368 | $ | 1,983 | $ | 88 | $ | (121 | ) | $ | 675 | ||||||||
| Undistributed income (loss) of investees accounted for under the equity method |
123 | 66 | 196 | 119 | (37 | ) | 29 | 25 | |||||||||||||||
| Interest capitalized |
— | — | — | — | 8 | 6 | — | ||||||||||||||||
| Adjusted earnings |
2,511 | 1,250 | 3,172 | 1,864 | 117 | (156 | ) | 650 | |||||||||||||||
| Add fixed charges: |
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| Interest credited to policyholders’ account balances |
1,356 | 803 | 2,334 | 1,830 | 1,846 | 1,804 | 1,751 | ||||||||||||||||
| Gross interest expense(1) |
345 | 186 | 492 | 403 | 435 | 653 | 1,056 | ||||||||||||||||
| Interest component of rental expense |
34 | 17 | 66 | 103 | 150 | 173 | 166 | ||||||||||||||||
| Total fixed charges |
1,735 | 1,006 | 2,892 | 2,336 | 2,431 | 2,630 | 2,973 | ||||||||||||||||
| Total earnings plus fixed charges |
$ | 4,246 | $ | 2,256 | $ | 6,064 | $ | 4,200 | $ | 2,548 | $ | 2,474 | $ | 3,623 | |||||||||
| Ratio of earnings to fixed charges(2) |
2.45 | 2.24 | 2.10 | 1.80 | 1.05 | — | 1.22 | ||||||||||||||||
| (1) | Includes interest expense of securities businesses reported in “Net investment income” in the Consolidated Statements of Operations, capitalized interest 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 $160 million would have been required in 2001 to achieve a ratio of 1:1. |