Exhibit 12
Principal Financial Group, Inc.
Computation of Earnings to Fixed Charges Ratio
The ratio of earnings to fixed charges is a measure of our ability to cover fixed costs with current period earnings. A high ratio indicates that earnings are sufficiently covering committed expenses. The following table sets forth, for the years indicated, our ratios of:
· earnings to fixed charges before interest credited on investment products and
· earnings to fixed charges.
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| For the years ended December 31, |
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| 2008 |
| 2007 |
| 2006 |
| 2005 |
| 2004 |
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| ($ in millions) |
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1. |
| Income from continuing operations before income taxes |
| $ | 453.6 |
| $ | 1,048.2 |
| $ | 1,331.3 |
| $ | 1,121.6 |
| $ | 878.7 |
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2. |
| Interest expense |
| 110.3 |
| 115.3 |
| 86.0 |
| 77.8 |
| 93.5 |
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3. |
| Interest factor of rental expense |
| 8.8 |
| 12.3 |
| 11.1 |
| 7.0 |
| 4.6 |
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4. |
| Undistributed income from equity investees |
| (20.4 | ) | (71.6 | ) | (62.7 | ) | (34.1 | ) | (19.4 | ) | |||||
5. |
| Earnings before interest credited on investment products |
| 552.3 |
| 1,104.2 |
| 1,365.7 |
| 1,172.3 |
| 957.4 |
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6. |
| Interest credited on investment products |
| 993.5 |
| 988.3 |
| 901.1 |
| 832.2 |
| 763.7 |
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7. |
| Earnings |
| $ | 1,545.8 |
| $ | 2,092.5 |
| $ | 2,266.8 |
| $ | 2,004.5 |
| $ | 1,721.1 |
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8. |
| Interest expense |
| $ | 110.3 |
| $ | 115.3 |
| $ | 86.0 |
| $ | 77.8 |
| $ | 93.5 |
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9. |
| Interest factor of rental expense |
| 8.8 |
| 12.3 |
| 11.1 |
| 7.0 |
| 4.6 |
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10. |
| Preferred stock dividends by registrant |
| 33.0 |
| 33.0 |
| 33.0 |
| 17.7 |
| — |
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11. |
| Fixed charges before interest credited on investment products |
| 152.1 |
| 160.6 |
| 130.1 |
| 102.5 |
| 98.1 |
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12. |
| Interest credited on investment products |
| 993.5 |
| 988.3 |
| 901.1 |
| 832.2 |
| 763.7 |
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13. |
| Fixed charges |
| $ | 1,145.6 |
| $ | 1,148.9 |
| $ | 1,031.2 |
| $ | 934.7 |
| $ | 861.8 |
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14. |
| Ratio of earnings to fixed charges before interest credited on investment products (Line item 5/Line item 11) |
| 3.6 |
| 6.9 |
| 10.5 |
| 11.4 |
| 9.8 |
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15. |
| Ratio of earnings to fixed charges (Line item 7/Line item 13) |
| 1.3 |
| 1.8 |
| 2.2 |
| 2.1 |
| 2.0 |
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210