Form: 10-Q

Quarterly report [Sections 13 or 15(d)]

Documents

Exhibit 12.1

 

PRUDENTIAL FINANCIAL, INC.

RATIO OF EARNINGS TO FIXED CHARGES

 

     For the Nine
Months Ended
September 30, 2005
    For the Three
Months Ended
September 30, 2005
    Year Ended December 31,
           2004
    2003
    2002
     2001
     2000
               ($ in millions)

Earnings:

                                                   

Income (loss) from continuing operations before income taxes, extraordinary gain on acquisition and cumulative effect of accounting change

    $ 3,751    $ 1,117    $ 3,368    $ 1,983    $ 88     $ (121 )   $ 675

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

      297      174      196      119      (37 )     29       25

Interest capitalized

      —        —        —        —        8       6       —  
    
  
  
  
  
 
 

Adjusted earnings

      3,454      943      3,172      1,864      117       (156 )     650
    
  
  
  
  
 
 

Add fixed charges:

                                                   

Interest credited to policyholders’ account balances

      1,998      642      2,359      1,857      1,869       1,826       1,751

Gross interest expense(1)

      546      201      492      403      435       653       1,056

Interest component of rental expense

      52      18      66      103      150       173       166
    
  
  
  
  
 
 

Total fixed charges

      2,596      861      2,917      2,363      2,454       2,652       2,973
    
  
  
  
  
 
 

Total earnings plus fixed charges

    $ 6,050    $ 1,804    $ 6,089    $ 4,227    $ 2,571     $ 2,496     $ 3,623
    
  
  
  
  
 
 

Ratio of earnings to fixed charges(2)

      2.33      2.10      2.09      1.79      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 than 1:1. Additional earnings of $156 million would have been required in 2001 to achieve a ratio of 1:1.