STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES.
Published on
Exhibit 12.1
PRUDENTIAL FINANCIAL, INC.
RATIO OF EARNINGS TO FIXED CHARGES
| Three Months Ended March 31, 2009 |
Year Ended December 31, | |||||||||||||||||||
| 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
| ($ 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(1) |
$ | 9 | $ | (1,806 | ) | $ | 5,023 | $ | 4,660 | $ | 4,481 | $ | 3,338 | |||||||
| Less: |
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| Undistributed income (loss) of investees accounted for under the equity method |
(126 | ) | (1,026 | ) | 109 | 70 | 281 | 116 | ||||||||||||
| Interest capitalized |
— | 5 | 6 | — | — | — | ||||||||||||||
| Adjusted earnings |
135 | (785 | ) | 4,908 | 4,590 | 4,200 | 3,222 | |||||||||||||
| Add fixed charges: |
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| Interest credited to policyholders’ account balances |
1,169 | 2,335 | 3,222 | 2,917 | 2,699 | 2,359 | ||||||||||||||
| Gross interest expense(2) |
303 | 1,401 | 1,502 | 1,217 | 785 | 492 | ||||||||||||||
| Interest component of rental expense |
18 | 64 | 60 | 58 | 64 | 66 | ||||||||||||||
| Total fixed charges |
1,490 | 3,800 | 4,784 | 4,192 | 3,548 | 2,917 | ||||||||||||||
| Total earnings plus fixed charges |
$ | 1,625 | $ | 3,015 | $ | 9,692 | $ | 8,782 | $ | 7,748 | $ | 6,139 | ||||||||
| Ratio of earnings to fixed charges(3) |
1.09 | — | 2.03 | 2.09 | 2.18 | 2.10 | ||||||||||||||
| (1) | Excludes earnings attributable to noncontrolling interests. |
| (2) | Interest expense on short-term and long-term debt. 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. Interest expense does not include interest on liabilities recorded under Financial Accounting Standards Board (“FASB”) Interpretation No. 48 “Accounting for Uncertainty in Income Taxes,” an Interpretation of FASB Statement No. 109. The Company’s policy is to classify such interest in income tax provision in the consolidated statements of operations. |
| (3) | Due to the Company’s loss for the year ended December 31, 2008, the ratio coverage was less than 1:1 and is therefore not presented. Additional earnings of $785 million would have been required for the year ended December 31, 2008 to achieve a ratio of 1:1. |