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, | |
| | | 2015 | | 2014 | | 2014 | | 2013 | | 2012 | | 2011 | | 2010 | |
| | | (in millions) | |
1. | Income from continuing operations before income taxes | | $ | 752.6 | | $ | 783.9 | | $ | 1,494.9 | | $ | 1,124.0 | | $ | 960.0 | | $ | 872.8 | | $ | 771.4 | |
2. | Interest expense | | 71.0 | | 68.5 | | 135.5 | | 143.4 | | 127.1 | | 140.5 | | 122.9 | |
3. | Interest factor of rental expense | | 2.9 | | 2.9 | | 5.9 | | 5.7 | | 6.1 | | 6.1 | | 6.4 | |
4. | Undistributed income from equity investees | | (54.9 | ) | (50.2 | ) | (113.9 | ) | (107.3 | ) | (99.9 | ) | (98.5 | ) | (130.6 | ) |
5. | Earnings before interest credited on investment products | | 771.6 | | 805.1 | | 1,522.4 | | 1,165.8 | | 993.3 | | 920.9 | | 770.1 | |
6. | Interest credited on investment products | | 79.3 | | 97.1 | | 189.6 | | 256.6 | | 366.3 | | 442.4 | | 579.2 | |
7. | Earnings | | $ | 850.9 | | $ | 902.2 | | $ | 1,712.0 | | $ | 1,422.4 | | $ | 1,359.6 | | $ | 1,363.3 | | $ | 1,349.3 | |
| | | | | | | | | | | | | | | | |
8. | Interest expense | | $ | 71.0 | | $ | 68.5 | | $ | 135.5 | | $ | 143.4 | | $ | 127.1 | | $ | 140.5 | | $ | 122.9 | |
9. | Interest factor of rental expense | | 2.9 | | 2.9 | | 5.9 | | 5.7 | | 6.1 | | 6.1 | | 6.4 | |
10. | Preferred stock dividends by registrant | | 16.5 | | 16.5 | | 33.0 | | 33.0 | | 33.0 | | 33.0 | | 33.0 | |
11 | Excess of redemption value over carrying value of preferred shares redeemed | | 8.2 | | — | | — | | — | | — | | — | | — | |
12. | Fixed charges before interest credited on investment products | | 98.6 | | 87.9 | | 174.4 | | 182.1 | | 166.2 | | 179.6 | | 162.3 | |
13. | Interest credited on investment products | | 79.3 | | 97.1 | | 189.6 | | 256.6 | | 366.3 | | 442.4 | | 579.2 | |
14. | Fixed charges | | $ | 177.9 | | $ | 185.0 | | $ | 364.0 | | $ | 438.7 | | $ | 532.5 | | $ | 622.0 | | $ | 741.5 | |
| | | | | | | | | | | | | | | | |
15. | Ratio of earnings to fixed charges before interest credited on investment products (Line item 5/Line item 12) | | 7.8 | | 9.2 | | 8.7 | | 6.4 | | 6.0 | | 5.1 | | 4.7 | |
| | | | | | | | | | | | | | | | |
16. | Ratio of earnings to fixed charges (Line item 7/Line item 14) | | 4.8 | | 4.9 | | 4.7 | | 3.2 | | 2.6 | | 2.2 | | 1.8 | |
