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,
     2009     2008     2007    2006    2005
     ($ in millions)

Earnings:

             

Income (loss) from continuing operations before income taxes, extraordinary gain on acquisition and cumulative effect of accounting change (1)

    $ 3,933      $ (1,793 )    $ 5,019    $ 4,659    $ 4,479

Less:

             

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

      (172 )      (1,026 )      109      70      281

Interest capitalized

      —          5        6      —        —  
                                    

Adjusted earnings

      4,105        (772 )      4,904      4,589      4,198
                                    

Add fixed charges:

             

Interest credited to policyholders’ account balances

      4,484        2,335        3,222      2,917      2,699

Gross interest expense (2)

      1,168        1,401        1,502      1,217      785

Interest component of rental expense

      77        64        60      58      64
                                    

Total fixed charges

      5,729        3,800        4,784      4,192      3,548
                                    

Total earnings plus fixed charges

    $ 9,834      $ 3,028      $ 9,688    $ 8,781    $ 7,746
                                    

Ratio of earnings to fixed charges (3)

      1.72        —          2.03      2.09      2.18
                                    

 

(1) Excludes earnings attributable to noncontrolling interests. The year ended December 31, 2009 includes a $2.247 billion pre-tax gain related to the sale of the Company’s minority joint venture interest in Wachovia Securities.
(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 the authoritative guidance on accounting for uncertainty in income taxes. 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 $772 million would have been required for the year ended December 31, 2008 to achieve a ratio of 1:1.