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, | |
| | | 2018 | | 2017 | | 2017 | | 2016 | | 2015 | | 2014 | | 2013 | |
| | | | | | | | | (in millions) | | | | | | | |
1. | Income from continuing operations before income taxes | | $ | 1,541.5 | | $ | 1,937.4 | | $ | 2,252.2 | | $ | 1,591.7 | | $ | 1,430.8 | | $ | 1,494.9 | | $ | 1,124.0 | |
2. | Interest expense | | 113.3 | | 114.5 | | 152.3 | | 165.8 | | 178.5 | | 135.5 | | 143.4 | |
3. | Interest factor of rental expense | | 5.3 | | 3.8 | | 7.1 | | 5.4 | | 4.9 | | 5.9 | | 5.7 | |
4. | Undistributed income from equity investees | | (76.8) | | (92.3) | | (127.5) | | (142.2) | | (106.3) | | (113.9) | | (107.3) | |
5. | Earnings before interest credited on investment products | | 1,583.3 | | 1,963.4 | | 2,284.1 | | 1,620.7 | | 1,507.9 | | 1,522.4 | | 1,165.8 | |
6. | Interest credited on investment products | | 170.2 | | 138.7 | | 187.9 | | 173.9 | | 152.0 | | 189.6 | | 256.6 | |
7. | Earnings | | $ | 1,753.5 | | $ | 2,102.1 | | $ | 2,472.0 | | $ | 1,794.6 | | $ | 1,659.9 | | $ | 1,712.0 | | $ | 1,422.4 | |
| | | | | | | | | | | | | | | | |
8. | Interest expense | | $ | 113.3 | | $ | 114.5 | | $ | 152.3 | | $ | 165.8 | | $ | 178.5 | | $ | 135.5 | | $ | 143.4 | |
9. | Interest factor of rental expense | | 5.3 | | 3.8 | | 7.1 | | 5.4 | | 4.9 | | 5.9 | | 5.7 | |
10. | Preferred stock dividends by registrant | | — | | — | | — | | — | | 16.5 | | 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 | | 118.6 | | 118.3 | | 159.4 | | 171.2 | | 208.1 | | 174.4 | | 182.1 | |
13. | Interest credited on investment products | | 170.2 | | 138.7 | | 187.9 | | 173.9 | | 152.0 | | 189.6 | | 256.6 | |
14. | Fixed charges | | $ | 288.8 | | $ | 257.0 | | $ | 347.3 | | $ | 345.1 | | $ | 360.1 | | $ | 364.0 | | $ | 438.7 | |
| | | | | | | | | | | | | | | | |
15. | Ratio of earnings to fixed charges before interest credited on investment products (Line item 5/Line item 12) | | 13.3 | | 16.6 | | 14.3 | | 9.5 | | 7.2 | | 8.7 | | 6.4 | |
| | | | | | | | | | | | | | | | |
16. | Ratio of earnings to fixed charges (Line item 7/Line item 14) | | 6.1 | | 8.2 | | 7.1 | | 5.2 | | 4.6 | | 4.7 | | 3.2 | |
141
