Form: 10-Q

Quarterly report [Sections 13 or 15(d)]

Documents

Exhibit 12.1

PRUDENTIAL FINANCIAL, INC.

RATIO OF EARNINGS TO FIXED CHARGES

 

    

Six months ended

June 30, 2006

   

Three months ended

June 30, 2006

    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

    $ 1,699    $ 658    $ 4,471    $ 3,368    $ 1,983    $ 88     $ (121 )

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

      220      79      460      196      119      (37 )     29  

Interest capitalized

      —        —        —        —        —        8       6  
                                                   

Adjusted earnings

      1,479      579      4,011      3,172      1,864      117       (156 )
                                                   

Add fixed charges:

                    

Interest credited to policyholders’ account balances

      1,205      582      2,699      2,359      1,857      1,869       1,826  

Gross interest expense(1)

      552      296      775      492      403      435       653  

Interest component of rental expense

      29      15      64      66      103      150       173  
                                                   

Total fixed charges

      1,786      893      3,538      2,917      2,363      2,454       2,652  
                                                   

Total earnings plus fixed charges

    $ 3,265    $ 1,472    $ 7,549    $ 6,089    $ 4,227    $ 2,571     $ 2,496  
                                                   

Ratio of earnings to fixed charges(2)

      1.83      1.65      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.