STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES
Published on
Exhibit 12.1
PRUDENTIAL FINANCIAL, INC.
RATIO OF EARNINGS TO FIXED CHARGES
| Nine
Months Ended September 30, 2011 |
Three Months Ended September 30, 2011 |
Year Ended December 31, | ||||||||||||||||||||||||||
| 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||||
| Earnings: |
||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes(1) |
$ | 4,413 | $ | 2,422 | $ | 4,490 | $ | 3,888 | $ | (1,956 | ) | $ | 4,772 | $ | 4,521 | |||||||||||||
| Less: |
||||||||||||||||||||||||||||
| Undistributed income (loss) of investees accounted for under the equity method |
249 | 5 | 100 | (172 | ) | (1,026 | ) | 109 | 70 | |||||||||||||||||||
| Interest capitalized |
— | — | — | — | 5 | 6 | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Adjusted earnings |
4,164 | 2,417 | 4,390 | 4,060 | (935 | ) | 4,657 | 4,451 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Add fixed charges: |
||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances |
3,477 | 1,463 | 4,209 | 4,484 | 2,335 | 3,222 | 2,917 | |||||||||||||||||||||
| Gross interest expense(2) |
977 | 331 | 1,224 | 1,168 | 1,401 | 1,502 | 1,217 | |||||||||||||||||||||
| Interest component of rental expense |
70 | 26 | 77 | 77 | 64 | 60 | 58 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total fixed charges |
4,524 | 1,820 | 5,510 | 5,729 | 3,800 | 4,784 | 4,192 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total earnings plus fixed charges |
$ | 8,688 | $ | 4,237 | $ | 9,900 | $ | 9,789 | $ | 2,865 | $ | 9,441 | $ | 8,643 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Ratio of earnings to fixed charges(3) |
1.92 | 2.33 | 1.80 | 1.71 | — | 1.97 | 2.06 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (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 $935 million would have been required for the year ended December 31, 2008 to achieve a ratio of 1:1. |