ITEM 15, FORM 10-K-EXHIBIT 12.1 -STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES
Published on
Exhibit 99.9
PRUDENTIAL FINANCIAL, INC.
RATIO OF EARNINGS TO FIXED CHARGES
| Year Ended December 31, |
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| 2005 |
2004 |
2003 |
2002 |
2001 |
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| ($ 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 |
$ | 4,502 | $ | 3,357 | $ | 1,965 | $ | 89 | $ | (144 | ) | ||||||
| Undistributed income (loss) of investees accounted for under the equity method |
306 | 116 | 94 | (37 | ) | 29 | |||||||||||
| Interest capitalized |
— | — | — | 8 | 6 | ||||||||||||
| Adjusted earnings |
4,196 | 3,241 | 1,871 | 118 | (179 | ) | |||||||||||
| 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 |
$ | 7,734 | $ | 6,158 | $ | 4,234 | $ | 2,572 | $ | 2,473 | |||||||
| Ratio of earnings to fixed charges(2) |
2.19 | 2.11 | 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 $179 million would have been required in 2001 to achieve a ratio of 1:1. |