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

 

     Year Ended December 31,
  
     2005
    2004
    2003
    2002
     2001
  
     ($ in millions)  

Earnings:

                                      

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

    $ 4,471    $ 3,368    $ 1,983    $ 88     $ (121 )

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

      460      196      119      (37 )     29  

Interest capitalized

      —        —        —        8       6  
    
  
  
  
 

Adjusted earnings

      4,011      3,172      1,864      117       (156 )
    
  
  
  
 
Add fixed charges:                                      

Interest credited to policyholders’ account balances

      2,699      2,359      1,857      1,869       1,826  

Gross interest expense(1)

      775      492      403      435       653  

Interest component of rental expense

      64      66      103      150       173  
    
  
  
  
 

Total fixed charges

      3,538      2,917      2,363      2,454       2,652  
    
  
  
  
 

Total earnings plus fixed charges

    $ 7,549    $ 6,089    $ 4,227    $ 2,571     $ 2,496  
    
  
  
  
 

Ratio of earnings to fixed charges(2)

      2.13      2.09      1.79      1.05       —    
    
  
  
  
 
(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.