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 periods indicated, our ratios of: (1) earnings to fixed charges before interest credited on investment products and (2) earnings to fixed charges.
| | | | For the six months | | | | | | | | | | | |
| | | | ended June 30, | | For the year ended December 31, | |
| | | | 2012 | | 2011 | | 2011 | | 2010 | | 2009 | | 2008 | | 2007(1) | |
| | | | (in millions) | |
1. | | Income from continuing operations before income taxes | | $ | 512.1 | | $ | 571.7 | | $ | 893.1 | | $ | 785.7 | | $ | 645.1 | | $ | 418.1 | | $ | 1,072.4 | |
2. | | Interest expense | | 62.9 | | 63.9 | | 140.5 | | 122.9 | | 118.0 | | 110.3 | | 115.3 | |
3. | | Interest factor of rental expense | | 3.0 | | 3.2 | | 6.1 | | 6.4 | | 6.7 | | 8.8 | | 12.3 | |
4. | | Undistributed income from equity investees | | (50.3 | ) | (46.7 | ) | (116.0 | ) | (83.4 | ) | (68.7 | ) | (18.8 | ) | (71.6 | ) |
5. | | Earnings before interest credited on investment products | | 527.7 | | 592.1 | | 923.7 | | 831.6 | | 701.1 | | 518.4 | | 1,128.4 | |
6. | | Interest credited on investment products | | 188.7 | | 227.1 | | 442.4 | | 579.2 | | 725.3 | | 993.5 | | 988.3 | |
7. | | Earnings | | $ | 716.4 | | $ | 819.2 | | $ | 1,366.1 | | $ | 1,410.8 | | $ | 1,426.4 | | $ | 1,511.9 | | $ | 2,116.7 | |
| | | | | | | | | | | | | | | | | |
8. | | Interest expense | | $ | 62.9 | | $ | 63.9 | | $ | 140.5 | | $ | 122.9 | | $ | 118.0 | | $ | 110.3 | | $ | 115.3 | |
9. | | Interest factor of rental expense | | 3.0 | | 3.2 | | 6.1 | | 6.4 | | 6.7 | | 8.8 | | 12.3 | |
10. | | Preferred stock dividends by registrant | | 16.5 | | 16.5 | | 33.0 | | 33.0 | | 33.0 | | 33.0 | | 33.0 | |
11. | | Fixed charges before interest credited on investment products | | 82.4 | | 83.6 | | 179.6 | | 162.3 | | 157.7 | | 152.1 | | 160.6 | |
12. | | Interest credited on investment products | | 188.7 | | 227.1 | | 442.4 | | 579.2 | | 725.3 | | 993.5 | | 988.3 | |
13. | | Fixed charges | | $ | 271.1 | | $ | 310.7 | | $ | 622.0 | | $ | 741.5 | | $ | 883.0 | | $ | 1,145.6 | | $ | 1,148.9 | |
| | | | | | | | | | | | | | | | | |
14. | | Ratio of earnings to fixed charges before interest credited on investment products (Line item 5/Line item 11) | | 6.4 | | 7.1 | | 5.1 | | 5.1 | | 4.4 | | 3.4 | | 7.0 | |
| | | | | | | | | | | | | | | | | |
15. | | Ratio of earnings to fixed charges (Line item 7/Line item 13) | | 2.6 | | 2.6 | | 2.2 | | 1.9 | | 1.6 | | 1.3 | | 1.8 | |
(1) 2007 information was not retrospectively recasted to reflect the DPAC Guidance and the Reinsurance Accounting Change.
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