EX-12.1 3 d435322dex121.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

 

    Nine Months Ended
September 30, 2012		     Three Months Ended
September 30, 2012		     Year Ended December 31,  
        2011     2010     2009     2008     2007  
                ($ in millions)  

Earnings:

              

Income (loss) from continuing operations before income taxes(1)

   $ 1,193      $ (927 )    $ 5,061      $ 4,226      $ 3,594      $ (2,155 )    $ 4,502   

Less:

              

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

     91        87        286        100        (172 )      (1,026 )      109   

Interest capitalized

     —          —          —          —          —          5        6   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted earnings

     1,102        (1,014 )      4,775        4,126        3,766        (1,134 )      4,387   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Add fixed charges:

              

Interest credited to policyholders’ account balances

     3,270        1,057        4,484        4,209        4,484        2,335        3,222   

Gross interest expense(2)

     1,038        347        1,315        1,224        1,168        1,401        1,502   

Interest component of rental expense

     72        24        93        69        69        64        60   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed charges

     4,380        1,428        5,892        5,502        5,721        3,800        4,784   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total earnings plus fixed charges

   $ 5,482      $ 414      $ 10,667      $ 9,628      $ 9,487      $ 2,666      $ 9,171   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ratio of earnings to fixed charges(3)

     1.25        —          1.81        1.75        1.66        —          1.92   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(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 three months ended September 30, 2012 and the year ended December 31, 2008, the ratio coverage was less than 1:1 and is therefore not presented. Additional earnings of $1,014 million and $1,134 million would have been required for the three months ended September 30, 2012 and the year ended December 31, 2008, respectively, to achieve a ratio of 1:1.