EX-12.1 4 dex121.htm STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES. Statement of Ratio of Earnings to Fixed Charges.

Exhibit 12.1

PRUDENTIAL FINANCIAL, INC.

RATIO OF EARNINGS TO FIXED CHARGES

 

     Three months ended
March 31, 2008		    Year Ended December 31,
        2007    2006    2005    2004    2003
     ($ in millions)

Earnings:

                  

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

   $ 114    $ 5,086    $ 4,716    $ 4,488    $ 3,338    $ 1,948

Less:

                  

Undistributed income of investees accounted for under the equity method

      17      109      70      281      116      94

Interest capitalized

      2      6      —        —        —        —  
                                         

Adjusted earnings

      95      4,971      4,646      4,207      3,222      1,854
                                         

Add fixed charges:

                  

Interest credited to policyholders' account balances

      637      3,222      2,917      2,699      2,359      1,857

Gross interest expense(1)

      364      1,435      1,161      775      492      403

Interest component of rental expense

      15      60      58      64      66      103
                                         

Total fixed charges

      1,016      4,717      4,136      3,538      2,917      2,363
                                         

Total earnings plus fixed charges

    $ 1,111    $ 9,688    $ 8,782    $ 7,745    $ 6,139    $ 4,217
                                         

Ratio of earnings to fixed charges

      1.09      2.05      2.12      2.19      2.10      1.78
                                         

 

(1) 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.