EX-12 2 a2182820zex-12.htm EXHIBIT 12
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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.

 
    
   For the years ended December 31,
  
 
    
   2007
   2006
   2005
   2004
   2003
  
 
    
   ($ in millions)

  
1.   Income from continuing operations before income taxes   $ 1,048.2   $ 1,331.3   $ 1,121.6   $ 878.7   $ 819.0  
2.   Interest expense     115.3     86.0     77.8     93.5     114.1  
3.   Interest factor of rental expense     12.3     11.1     7.0     4.6     4.8  
4.   Undistributed income from equity investees     (71.6 )   (62.7 )   (34.1 )   (19.4 )   (18.3 )
       
 
 
 
 
 
5.   Earnings before interest credited on investment products     1,104.2     1,365.7     1,172.3     957.4     919.6  
6.   Interest credited on investment products     988.3     901.1     832.2     763.7     735.7  
       
 
 
 
 
 
7.   Earnings   $ 2,092.5   $ 2,266.8   $ 2,004.5   $ 1,721.1   $ 1,655.3  
       
 
 
 
 
 
8.   Interest expense   $ 115.3   $ 86.0   $ 77.8   $ 93.5   $ 114.1  
9.   Interest factor of rental expense     12.3     11.1     7.0     4.6     4.8  
10.   Preferred stock dividends by registrant     33.0     33.0     17.7     —     —  
11.   Preferred stock dividend requirements of majority-owned subsidiaries (non-intercompany)     —     —     —     —     1.2  
       
 
 
 
 
 
12.   Fixed charges before interest credited on investment products     160.6     130.1     102.5     98.1     120.1  
13.   Interest credited on investment products     988.3     901.1     832.2     763.7     735.7  
       
 
 
 
 
 
14.   Fixed charges   $ 1,148.9   $ 1,031.2   $ 934.7   $ 861.8   $ 855.8  
       
 
 
 
 
 
15.   Ratio of earnings to fixed charges before interest credited on investment products (Line item 5/Line item 12)     6.9     10.5     11.4     9.8     7.7  
16.   Ratio of earnings to fixed charges (Line item 7/Line item 14)     1.8     2.2     2.1     2.0     1.9  

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Principal Financial Group, Inc. Computation of Earnings to Fixed Charges Ratio