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 nine months | | | | | | | | | | |
| | | ended September 30, | | For the year ended December 31, |
| | | 2016 | | 2015 | | 2015 | | 2014 | | 2013 | | 2012 | | 2011 |
| | | (in millions) |
1. | Income from continuing operations before income taxes | | $ | 1,210.4 | | $ | 1,121.8 | | $ | 1,430.8 | | $ | 1,494.9 | | $ | 1,124.0 | | $ | 960.0 | | $ | 872.8 |
2. | Interest expense | | 125.5 | | 136.5 | | 178.5 | | 135.5 | | 143.4 | | 127.1 | | 140.5 |
3. | Interest factor of rental expense | | 3.6 | | 4.4 | | 4.9 | | 5.9 | | 5.7 | | 6.1 | | 6.1 |
4. | Undistributed income from equity investees | | (95.5) | | (79.9) | | (106.3) | | (113.9) | | (107.3) | | (99.9) | | (98.5) |
5. | Earnings before interest credited on investment products | | 1,244.0 | | 1,182.8 | | 1,507.9 | | 1,522.4 | | 1,165.8 | | 993.3 | | 920.9 |
6. | Interest credited on investment products | | 130.0 | | 115.3 | | 152.0 | | 189.6 | | 256.6 | | 366.3 | | 442.4 |
7. | Earnings | | $ | 1,374.0 | | $ | 1,298.1 | | $ | 1,659.9 | | $ | 1,712.0 | | $ | 1,422.4 | | $ | 1,359.6 | | $ | 1,363.3 |
| | | | | | | | | | | | | | | |
8. | Interest expense | | $ | 125.5 | | $ | 136.5 | | $ | 178.5 | | $ | 135.5 | | $ | 143.4 | | $ | 127.1 | | $ | 140.5 |
9. | Interest factor of rental expense | | 3.6 | | 4.4 | | 4.9 | | 5.9 | | 5.7 | | 6.1 | | 6.1 |
10. | Preferred stock dividends by registrant | | — | | 16.5 | | 16.5 | | 33.0 | | 33.0 | | 33.0 | | 33.0 |
11 | Excess of redemption value over carrying value of preferred shares redeemed | | — | | 8.2 | | 8.2 | | — | | — | | — | | — |
12. | Fixed charges before interest credited on investment products | | 129.1 | | 165.6 | | 208.1 | | 174.4 | | 182.1 | | 166.2 | | 179.6 |
13. | Interest credited on investment products | | 130.0 | | 115.3 | | 152.0 | | 189.6 | | 256.6 | | 366.3 | | 442.4 |
14. | Fixed charges | | $ | 259.1 | | $ | 280.9 | | $ | 360.1 | | $ | 364.0 | | $ | 438.7 | | $ | 532.5 | | $ | 622.0 |
| | | | | | | | | | | | | | | |
15. | Ratio of earnings to fixed charges before interest credited on investment products (Line item 5/Line item 12) | | 9.6 | | 7.1 | | 7.2 | | 8.7 | | 6.4 | | 6.0 | | 5.1 |
| | | | | | | | | | | | | | | |
16. | Ratio of earnings to fixed charges (Line item 7/Line item 14) | | 5.3 | | 4.6 | | 4.6 | | 4.7 | | 3.2 | | 2.6 | | 2.2 |
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