Principal Financial Group 101

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Information about Principal Financial Group 101
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Published on February 28, 2014

Author: investors_principalfinancial



Principal Financial Group 101

March 2014 Principal Financial Group®

Use of Non‐GAAP Financial Measures A non‐GAAP financial measure is a numerical measure of performance, financial position, or cash flows that  includes adjustments from a comparable financial measure presented in accordance with U.S. GAAP.   The company uses a number of non‐GAAP financial measures that management believes are useful to  investors because they illustrate the performance of the company’s normal, ongoing operations which is  important in understanding and evaluating the company’s financial condition and results of operations.  While  such measures are also consistent with measures utilized by investors to evaluate performance, they are not,  however, a substitute for U.S. GAAP financial measures. Therefore, at the end of the presentation, the  company has provided reconciliations of the non‐GAAP financial measures to the most directly comparable  U.S. GAAP financial measure.  The company adjusts U.S. GAAP financial measures for items not directly related  to ongoing operations.  However, it is possible these adjusting items have occurred in the past and could recur  in future reporting periods.  Management also uses non‐GAAP financial measures for goal setting, as a basis for  determining employee and senior management awards and compensation, and evaluating performance on a  basis comparable to that used by investors and securities analysts.  The company also uses a variety of other operational measures that do not have U.S. GAAP counterparts, and  therefore do not fit the definition of non‐GAAP financial measures.  Assets under management is an example  of an operational measure that is not considered a non‐GAAP financial measure. 2

Forward Looking Statements Certain statements made by the company which are not historical facts may be considered forward‐looking statements, including, without  limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized gains and  losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not  undertake to update these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be  inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results  anticipated in these forward‐looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are  discussed in the company's annual report on Form 10‐K for the year ended Dec. 31, 2013, and in the company’s quarterly report on Form 10‐Q for  the quarter ended Sept 30, 2013, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to  time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions may significantly  affect the company’s ability to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the global capital markets  and the economy generally; continued volatility or declines in the equity markets; changes in interest rates or credit spreads; the company’s  investment portfolio is subject to several risks that may diminish the value of its invested assets and the investment returns credited to customers;  the company’s valuation of securities may include methodologies, estimations and assumptions that are subject to differing interpretations; the  determination of the amount of allowances and impairments taken on the company’s investments requires estimations and assumptions that are  subject to differing interpretations; gross unrealized losses may be realized or result in future impairments; competition from companies that may  have greater financial resources, broader arrays of products, higher ratings and stronger financial performance; a downgrade in the company’s  financial strength or credit ratings; inability to attract and retain sales representatives and develop new distribution sources; international business  risks; the company’s actual experience could differ significantly from its pricing and reserving assumptions; the company’s ability to pay stockholder  dividends and meet its obligations may be constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life;  the pattern of amortizing the company’s DPAC and other actuarial balances on its universal life‐type insurance contracts, participating life insurance  policies and certain investment contracts may change; the company may need to fund deficiencies in its “Closed Block” assets that support  participating ordinary life insurance policies that had a dividend scale in force at the time of Principal Life’s 1998 conversion into a stock life  insurance company; the company’s reinsurers could default on their obligations or increase their rates; risks arising from acquisitions of businesses;  changes in laws, regulations or accounting standards; a computer system failure or security breach could disrupt the company’s business, and  damage its reputation; results of litigation and regulatory investigations; from time to time the company may become subject to tax audits, tax  litigation or similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be material; fluctuations in  foreign currency exchange rates; and applicable laws and the company’s certificate of incorporation and by‐laws may discourage takeovers and  business combinations that some stockholders might consider in their best interests. 3

COMPANY OVERVIEW A Leading Financial Services Company •Fortune 500 company; 135 year history; 19.4 million customers •Offices in 18 countries; 14,790 employees worldwide •Full range of retirement savings, investment and insurance solutions for small to  medium‐sized businesses & their employees, individuals, and institutions Operating Earnings $1,208.8 million* December 31, 2013 Retirement & Investor Services  Accumulation 49% U.S.  Insurance  Solutions  Principal 16% International 18% RIS Guaranteed  8% Principal Global Investors 9% 4 *Year to date.  After‐tax.  Results exclude Corporate. Assets Under Management by Source $483.2 billion as of December 31, 2013 RIS Guaranteed  3% Retirement & Investor Services  Accumulation 47% Corporate 1% U.S.  Insurance  Solutions  4% Principal International 22% Principal Global Investors  23%

COMPANY OVERVIEW Organizational Structure Principal Financial Group Zimpleman CEO – 43/43 yrs* Lillis CFO – 32/32 yrs Retirement &  Investor Services Principal Global  Investors Principal  International U.S. Insurance  Solutions Houston ‐ President 30/30 yrs McCaughan – President 40/12 yrs Valdes – President 26/23 yrs Houston – President 30/30 yrs Full Service  Accumulation Life Principal Funds Specialty Benefits Individual Annuities Bank & Trust  Full Service Payout Investment Only 5 *Years of experience: Industry/The Principal as of year end 2014. **Exited business. Corporate Health**

COMPANY OVERVIEW Principal Financial Group Global Presence UK Ireland Principal Global Investors(Europe) LTD Asset Management Principal Global Investors (Ireland) Ltd Mutual Funds Netherlands Principal Global Investors Representative Office Asset Management Japan Principal Global Investors (Japan) LTD Asset Management China CCB-Principal AMC – JV with CCB Mutual Funds, IAM PRINCIPAL FINANCIAL GROUP Headquarters Des Moines, Iowa Mexico Principal AFORE Pensions Representative Offices Pensions, Asset Management Germany Principal Global Investors (Europe) LTD Asset Management Principal Seguros Life Insurance Principal Pensiones Annuities UAE Principal Fondos de Inversión, S.A. de C.V (PFI) Mutual Funds, IAM Principal Global Investors Representative Office Asset Management Brazil Principal Creditos Hipotecarios Residential Mortgages BrasilPrev - JV with Banco do Brasil Pensions, Annuities, IAM Principal AGF Mutual Funds, IAM Claritas Mutual Funds Cuprum Pensions - Mandatory Principal Insurance Company Pensions, Mutual Funds, IAM Principal Global Investors (Asia) Ltd. Asset Management India Thailand Principal/AMC JV with PNB/Vijaya Mutual Funds Principal PNB Asset Management Co. Asset Management Malaysia Chile Principal Vida Annuities / Pensions Hong Kong CIMB-Principal AMC - JV with CIMB Group Mutual Funds, Asset Management CIMB Principal Islamic Asset Management (PGI JV with CIMB Group) Islamic Institutional Asset Management CIMB-Principal AMC Mutual Funds, Asset Management Singapore CIMB-Principal AMC Principal Global Investors (Singapore) Asset Management Australia Principal Global Investors (Australia) LTD Asset Management Indonesia 6 CIMB-Principal AMC Mutual Funds, Asset Management

COMPANY OVERVIEW 135 Years of Experience 1941 Group  Health &  Pension 1911 Mutual  Life Co 1879 Life  Assoc 1970s Defined  Contribution 1968 Mutual  Funds 1936 Mortgage  Banking/  Commercial  Mortgage 7 1998 Principal Bank;   Mutual  Holding Co 1990 Principal  Intl 1985 Principal  Financial  Group JV – Joint Venture. IPO – Initial Public Offering. 1996 Principal  Hong Kong 1995 Principal  Chile 1997 Principal  Mexico 2003 Post  Advisory  Group 2001 IPO;  Spectrum 2008 CIMB‐Principal  Islamic Asset Mgmt 2006 Washington  Mutual Funds;  WM Advisors 2002 Benefit  Consultants  Inc;  Total  Retirement  Suite SM 1999 Principal Global  Investors;  BrasilPrev JV;  Principal Asset  Mgmt Co (India) 2005 CCB  Principal;  Columbus  Circle 2007 Morley 2013 Liongate 2011 HSBC Afore; Finisterre; Origin 2012 Claritas;  Cuprum 2010 BrasilPrev JV extension

COMPANY OVERVIEW Experienced Management Team Name Age* Title Larry D. Zimpleman 63 Chairman, President & CEO  43/43 Daniel J. Houston 53 President – Retirement, Insurance and Financial Svcs 30/30 James P. McCaughan 61 President – Global Asset Management   40/12 Luis E. Valdes 57 President – Principal International 26/23 Timothy M. Dunbar 57 Executive VP, Chief Investment Officer 33/28        Ralph C. Eucher 62 Executive VP, Human Resources & Corporate Svcs 30/20 Terrance J. Lillis  62 Executive VP & Chief Financial Officer 32/32 Gary P. Scholten 57 Executive VP & Chief Information Officer 34/34 Karen E. Shaff 60 Executive VP, General Counsel & Corporate Secretary 32/32 Rex Auyeung 62 Senior VP, President , Principal Financial Group– Asia 37/20 Ned A. Burmeister 55 Senior VP, COO – Principal International  35/35 Gregory J. Burrows  52 Senior VP, Retirement & Investor Svcs 28/28 Gregory B. Elming 54 Senior VP & Chief Risk Officer  32/32 Nora M. Everett 55 Senior VP, Retirement & Investor Svcs 23/23 Julia M. Lawler 54 Senior VP – Investment Services 32/30 Timothy J. Minard 51 Senior VP, Distribution  28/28 Mary A. O’Keefe 58 Senior VP & Chief Marketing Officer 24/24 Jerry Patterson 48 Senior VP, Retirement & Investor Svcs 26/13 Beth Raymond 48 Senior VP & Chief Human Resources Officer 23/14 Angela  R. Sanders 51 Senior VP & Controller 25/25 Deanna D. Strable 46 Senior VP, U.S. Insurance Solutions 25/25 Roberto Walker 49 Senior VP, President, Principal Financial Group – LatAm 25/18 8 *As of year end 2014 (Industry/PFG)*

COMPANY OVERVIEW Industry Leadership Retirement and Investor Services •A leading provider of DC plans1 •#1 provider of DB plans2 •#1 provider of ESOP plans3 •#5 Manager of Lifecycle Funds4 Principal International •#1 net deposits – Brazil (Brasilprev)9 •#1 APV – Chile10 •#2 asset management – Malaysia11 •Top ten MPF provider – Hong Kong12 •#5 AFORE – Mexico13 9 Principal Global Investors •Best Place to Work in Money  U.S. Insurance Solutions •#2 Non‐qualified deferred  compensation14 •#5 Non‐medical coverages15 •#5 IDI coverages15 Management 5 •Top 10 manager Real Estate 6 •Top 10 manager High Yield7 •Manager Recommended to Other  Pension Funds by 100% of Clients8 Sources:  1 PLANSPONSOR Recordkeeeping Survey 6/13, 2 PLANSPONSOR, April 2013; 3 PLANSPONSOR 6/13; 4 Strategic Insight 9/30/13 Lifecycle Report;  5Pensions & Investments, “The Best Places to Work in Money Management among companies with our size category”, PFG recognition 12/09/2013.  6Managers ranked by total worldwide real estate assets (net of leverage), data as of 6/30/13, “Largest Real Estate Managers”, Pensions & Investments,  October 28, 2013; 7Managers ranked by U.S. institutional, tax‐exempt assets managed internally, as of 12/31/12, “Largest Money Managers”, Pensions  & Investments, Online Research Center. 8Principal Global Investors Europe was awarded two 2013 Pension Fund Perception Programme awards by  Investment & Pensions Europe (IPE) magazine.  Results for Principal Global Investors Europe are based on input from participating pension funds with  over €1trn in assets under management, and reporting on over 300 managers, who were asked to rank the criteria they considered most important in  selecting asset managers they appoint to manage their portfolios. The Manager Recommended to Other Pension Funds by 100% of Clients category was  awarded to 25 managers selected from a field of 180 managers. 9Quantum, 12/2012; 10SP (Superintendencia de Pensiones), 1/2013; 11Lipper.  Percentage of market share as of 07/2013;  12Lipper. Based on AUM as of 03/2013; 13CONSAR & PROCESAR, May 2013; 14PLANSPONSOR Dec 12 (based  on number of plans record‐kept); 15LIMRA 2012 surveys:  Non‐medical based on fully insured employer contracts in force & Individual Disability  Insurance (IDI) rank based on in‐force policies.

COMPANY OVERVIEW Financial Strength: Current Ratings (as of January 2014) • Moody's Investors Service • 'A1', Good – fifth highest of 21  rating levels. Outlook: Stable  Rating as of November 2013 • FitchRatings 'AA‐‘, Very Strong ‐ fourth highest of  21 rating levels. Outlook: Negative Rating as of October 2013 10 Standard & Poor's  ‘A+’, Strong ‐ fifth highest of 21  rating levels. Outlook:  Stable Ratings as of July 2013 • A.M. Best 'A+', Superior ‐ second highest of  16 rating levels. Outlook: Stable  Rating as of December 2013 Ratings related to Principal Life Insurance Company and Principal National Life Insurance Company.

COMPANY OVERVIEW Our Strategy is Well Suited for the Current Environment  Meet retirement and employee benefit  needs of growing businesses and their  employees.  Globally Competitive Employers Fiscally Constrained Governments  Capitalize on unprecedented demand for  financial services among Baby and Echo  Boomers.  Grow proven, global, multi‐boutique asset  management model for institutional  markets and clients. Aging Populations 11  Extend retirement and long‐term asset  accumulation expertise in key emerging  markets with fast growing middle classes  and retirement assets.

at a glance Principal Global Investors Assets Under Management  $292B By Asset Class Equity $103 Fixed Income $126 Real Estate $49 Alternatives $14 12 As of 12/31/13. PRINCIPAL GLOBAL INVESTORS • Serve clients in over 60 countries, including  several major central banks and sovereign  wealth funds • Network of specialized investment boutiques  manage assets for a broad range of investors  around the world • Manages: – 58% of Full Service Accumulation assets – 77% of Principal Funds assets – 100% of Principal Life general account assets • Office locations in major financial markets  worldwide • Long‐standing commitment to corporate  stewardship

OUR  CURRENT  BOUTIQUES Fixed Income Real Estate Asset Allocation/  Alternatives Principal Global  Equities $74.4B Principal Global  Fixed Income $73.4B Private Real Estate $32.3B Edge Asset  Management $17.5B Columbus Circle  Investors $17.3B Morley Financial  Services $18.0B CMBS $6.1B  Multi‐Asset  Advisors $145M1 Origin Asset  Management $2.7B Post Advisory  Group $11.3B Principal  Enterprise Capital $4.7B Macro Currency  Group $9.5B Spectrum Asset  Management $15.8B PRINCIPAL GLOBAL  INVESTORS Equities REITs $5.8B Liongate Capital  Management $1.0B  (AUM as of 12/31/13) Finisterre Capital $1.8B 1 13 Responsible for allocation decision‐making and implementation across a range of products and client portfolios, and for  providing macro economic perspectives to guide allocations.  2 $1B is sub‐advised by Principal Global Investors Equities and included within the $74.4B Equities AUM shown above. CIMB – Principal  Islamic Asset  Mgmt. $1.5B 2

PRINCIPAL GLOBAL  INVESTORS ASSET  MANAGEMENT  EXPERTISE  WINS MANDATES • Winner of the Non‐U.S. Equity Value  (1) Award • Principal Global Real Estate Securities  Fund ‐ Class I received a 2013 Lipper  Fund Award for best performing  global real estate fund over the 5‐ year period (2) (3) • Top 10 Manager of Real Estate (4) • Top 10 Manager of High Yield • PFG ranked No.1 company among  the Best Places to Work in Money  Management(5) 14 Principal Global Investors Unaffiliated AUM  (in billions) $109.4  $98.2  $78.7  $82.4  2010 2011 2012 2013 Sources: (1) Principal Global Investors announced as winner in the non‐US Equity Value excluding emerging markets category by  Institutional Investor in their U.S. Investment Management Awards, March 2013. (2) The Principal Real Estate Investors portfolio  management team sub‐advises the Principal Global Real Estate Securities Fund‐Class I, which recently received a 2013 Lipper Fund Award for being the best performing global real estate fund over the 5‐year period. (3) Managers ranked by total worldwide real  estate assets (net of leverage), as of June 30, 2013, “Largest Real Estate Managers”, Pensions & Investments, October 28, 2013. (4)  Managers ranked by U.S. institutional, tax‐exempt assets managed internally, as of 12/31/12. “Largest Money Managers”,  Pensions & Investments, Online Research Center. (5) Principal Financial Group recognized for firms with our size category.  Pensions & Investments, December 09, 2013.  (6) Managers ranked by total assets under management.  America’s Top 300 Money  Manager, Institutional Investor, July 2013, data as of 12/31/2012. 

PRINCIPAL GLOBAL  INVESTORS STRONG  INVESTMENT  PERFORMANCE Morningstar Rankings  Percentage of Principal Funds in the top two quartiles 91% 84% 80% 78% 72% 67% 66% 60% 58% Represents $143 billion AUM of  which 75% managed by PGI  boutiques 1‐Year Dec. 31, 2012 15 Principal Funds Class I 3‐Year Sept. 30, 2013 5‐Year Dec. 31, 2013

RETIREMENT &  INVESTOR SERVICES STRATEGIC  PLATFORM  FOR GROWTH PLATFORM CONTINUUM  Across markets | Across life stages Full Service Accumulation Principal Funds Investment  Only Annuities Bank INVESTMENT MANAGEMENT INDIVIDUAL EMPLOYER 16 Full  Service  Payout


RETIREMENT &  INVESTOR SERVICES   Full Service Accumulation PRINCIPAL  TOTAL  RETIREMENT  SUITESM Defined Benefit #1 DB provider (by # of clients) Defined  Contribution #2 DC plan  recordkeeper (by # of plans) 18 Nonqualified  Plans #1 ESOP plan  recordkeeper #2 Deferred Comp  provider (by # of plans) STILL A DIFFERENTIATOR Employee Stock  Ownership Plan (by # of clients) All rankings sourced from PLAN SPONSOR magazine as follows – Defined Benefit: DB Administration Survey  04/13;  Defined Contribution and ESOP: Recordkeeping Survey 06/13;  Nonqualified: Deferred Compensation  Buyer’s Guide 12/12.

RETIREMENT &  INVESTOR SERVICES   Full Service Accumulation 14 FSA* SALES 11.5 12 10 $ Billions Execution of  Strategy: 8 6 10.3 9.4 2.4 6.7 2.1 3.4 4 2 8.5 8.3 1.3 1.4 1.4 2.2 5.0 1.0 0.5 0.7 3.5 2.8 2008 2009 0 2007 1st Quarter 19 *Full‐Service Accumulation 2nd Quarter 3.2 3.3 3.0 3.3 2.7 1.5 2.3 0.9 0.9 1.7 2011 1.8 1.7 2010 2.6 2.0 3rd Quarter 3.2 2.9 2012 2013 4th Quarter

RETIREMENT &  INVESTOR SERVICES   Full Service Accumulation 30 24.3 25 20.6 4.4 5.8 10 4.5 3.8 5.8 3.8 20.3 6.5 6.0 6.3 5.6 6.3 5.7 5.8 4.3 3.6 4.1 5.0 7.0 6.0 6.0 5.0 6.5 6.8 2008 2009 2010 2011 2012 2013 4.2 5 5.1 0 Avg deferral per member +8%* People receiving a match +27%* * 4Q10 compared to 4Q13. 17.0 18.5 3.6 15 People making a deferral +18%* 20 4.5 5.5 $ Billions RISING  DEPOSITS &  THE POWER OF  PAYROLL  DEDUCTION  20.4 20 25.2 2007 1st Quarter 2nd Quarter 3rd Quarter Employment rates have  not fully recovered – UPSIDE EXISTS 4th Quarter

RETIREMENT &  INVESTOR SERVICES   Full Service Accumulation 7.7% 6.9% 6.6% 7.3% 6.9% 7.1% 7.1% 80% 17.7% 20.1% 22.3% 23.3% 26.5% 26.9% 25.7% 60% 10.9% 12.7% 12.8% 11.1% 10.0% 10.3% 10.6% 63.7% 60.4% 58.4% 58.3% 56.6% 55.8% 57.2% 100% FSA* ACCOUNT  VALUE BY  MANAGER  40% 20% PGI managed 21 *Full‐Service Accumulation Sub-advised Non-proprietary 4Q13 Deposits 2013 2012 2011 2010 2009 2008 0% ER Securities

RETIREMENT &  INVESTOR SERVICES   Full Service Accumulation Profit Margin* Industry Avg vs. The Principal OUR  DISCIPLINED  EXECUTION  DELIVERS  POSITIVE  RESULTS 22 * Profit 2000 Benchmark Study, Sterling Resources, Inc. (2013) Principal Industry Avg

RETIREMENT &  INVESTOR SERVICES   Full Service Accumulation Revenue sourced from FSA platform $2B Other PFG  businesses MULTIPLE  BUSINESSES  LEVERAGE FSA  SUCCESS Other PFG  businesses $350 MILLION FSA FSA $0 2013E 23 Principal Funds, PGI, Bank & Trust, Individual Annuities, Individual Life and Full Service Payout are all beneficiaries   2018E $500 MILLION

Full Service Accumulation (FSA) RETIREMENT &  INVESTOR SERVICES 6.3% 3.5% 1.7% NET CASH  FLOW  CONSISTENTLY  OUTPACES  INDUSTRY 0.8% 0.6% 1.0% 0.8% 0.2% 2010 2011 2012 401k Industry net flows 2013 Principal FSA net flows Principal Funds 18.1% 12.5% 6.7% 6.0% 4.6% 4.5% 4.2% 1.9% 2010 2011 Industry net flows 2012 2013 Principal Funds net flows Net cash flows as % of beginning of year assets 2010‐2013.  Sources of industry data: 401(k) industry – Department of Labor & Cerulli 24 Associates 2013 (for 2013, industry 401(k) is an estimate); Funds – Strategic Insight Mutual Fund Industry Review (long‐term funds).   Principal Funds net flows represent long‐term funds only.  

NEEDS‐DRIVEN INVESTMENT SOLUTIONS Broad and unique asset allocation strategies ASSET ALLOCATION LEADERSHIP 25 Multi‐manager solutions Portfolio construction strategies: *Based on $38.2B in assets  Strategic Insight 12/31/13 Lifecycle Report  $3.7B MidCap $3.3B Preferred $1.9B $1.7B $1.3B TOTAL FOR  TOP 5 Target date & target risk Global Diversified  Income Strategic Asset  Management #5 largest lifecycle fund manager* YTD 2013 High Yield • • • • TOP SELLING FUNDS $12.0B

Net Cash  Flow RETIREMENT &  INVESTOR SERVICES   Assets Under  Management Principal Funds 30% A DIVERSIFIED  FAMILY OF   MUTUAL FUNDS Equity 18% Fixed Income 44% 4% 3% Index 58% 45% Asset Allocation 5% ‐11% 26 4% 2013 2013 Other

RETIREMENT &  INVESTOR SERVICES   Principal Funds DRIVING  INDUSTRY  RECOGNITION Best Mixed-Asset Large Fund Group 2013 AND ADVISOR  ENGAGEMENT #5 for DC Investment Manager 27

RETIREMENT &  INVESTOR SERVICES INDIVIDUAL  INVESTOR  STRATEGY ENROLLMENT  OPTIMIZATION READY TO  RETIRE RETIREMENT  INCOME  SOLUTIONS 28 • Simplify process • Improve experience • Maximize participation and  influence behavior • Portfolio allocation • Participant education • Education and guidance • Portfolio construction  strategies • Income annuities

INDIVIDUAL  INVESTOR  STRATEGY  CAPTURES  ADDITIONAL  ASSETS Assets Captured in Billions RETIREMENT &  INVESTOR SERVICES $0.4 $0.3 $0.3 $0.2 $0.2 $1.5 $0.8 2010 $1.0 2011 Roll‐ins into FSA plans 29 $1.7 $1.2 2012 2013 Retail sales to participants 2014E

Innovative Solutions:  Solving Income Needs ACCUMULATION  MULTI-PRODUCT SOLUTION SET • “Through Retirement” Lifecycle Funds • Mutual Funds that: ‒ Generate income OUR APPROACH: ‒ Preserve capital • Education ‒ Protect against inflation • Planning assistance ‒ Address market volatility (RetireSecure®) • Annuities to provide:  ‒ Fixed returns  • Full array of options ‒ Guaranteed income • Innovative solutions ‒ Protection against volatility • Bank products • Full Service Payout ‒ Defined Benefit plan terminations 30 RETIREMENT  INCOME

U.S. INSURANCE  SOLUTIONS INDIVIDUAL LIFE • Non‐Qualified Plans 12.4% #2 • Total Life New Sales Premium 1.4% #18 7.1% #5 ‐ Life 8.6% #4 ‐ Disability 6.4% #5 6.3% #7 • Individual Disability  In‐force Premium 7.8% #5 • Individual Disability  New Sales Premium 31 2012 Industry Rank ‐ Dental SUCCESS  REFLECTS  EXPERTISE  SERVING SMB  MARKET 2012 Market Share 15.8% #3 SPECIALTY BENEFITS • Total Group In‐Force Contracts Nonqualified Plans ranking from Plan Sponsor Deferred Compensation  Buyer’s Guide Dec 12.  All other rankings are from LIMRA 2012.

Individual Life Leadership: FOCUS ON THE BUSINESS MARKET SOLUTIONS FOR BUSINESS, BUSINESS OWNERS AND KEY EXECUTIVES Business owners’ financial challenges • Exiting the business • Business transition • Retaining key employees • Retirement planning  BOES 36% Individual 43% Solutions for key employees • Retirement income • Survivor income • Business protection ER/NQ 21% 2013 Sales 32 BOES = Business Owner/Executive Solutions  ER/NQ = Employer/Non‐qualified

U.S. INSURANCE  SOLUTIONS 2013 Total Premium & Fees  Specialty Benefits BALANCED  PORTFOLIO  plus ABOVE  INDUSTRY  PREMIUM  GROWTH Group  Benefits  83% Individual  Disability  17% Dental/  Vision 48% Group Life 27% 5.6% 2012 Premium Growth 3.4% 3.2% 2.8% 2.7% 2.0% Group Dental Group Life The Principal 33 Group  Disability  25% Group Disability Industry

U.S. DISTRIBUTION OVERVIEW PROPRIETARY CAREER • 1,000 agents  • Sell all products • Career places  80‐85% of sales  within The  Principal family  products  THIRD PARTY PRINCIPAL  CONNECTION • 70 counselors  with focus on  education INVESTMENTORIENTED INSURANCEORIENTED • Wirehouses • Regional Broker/Dealers • Planners • Insurance Producers BANKS • Banks • Broker/ Dealers • Marketers ALLIANCE MANAGEMENT GROUP (AMG) Select 3rd party distributors with dedicated support STRENGTHENS RELATIONSHIPS AND FUELS SALES GROWTH 11 WHOLESALE CHANNELS Retirement  Investment   Annuities Solutions ESOP NQDC Retail  Life Wellness Disability  Group  AMG Insurance Benefits Worksite All supported by DEDICATED SERVICE TEAMS providing education, training, counseling and retention 34

NATIONAL PRESENCE WITH  LOCAL EMPLOYEES  121 Total Offices OUR VALUE TO ADVISORS: ● Solutions‐based selling ● Point of sale support ● Ongoing service and  education support ● Pipeline development ● Practice management ● Advisor education 35 NOTE: Approximate view as of March 2012.  Check for actual locations.

SALES – Then & Now 24% PRINCIPAL FUNDS MULTIPLE  DISTRIBUTION  CHANNELS 100% Affiliated Distribution 47% Third Party Broker/Dealers 29% 2006 $3.8B DCIO/RIA 2013 $19.8B Account Values – Then & Now 41% 100% 44% Affiliated Distribution Third Party Broker/Dealers DCIO/RIA 15% 2006 $14.7B 36 DCIO = Defined Contribution Investment Only. RIA = Registered Investment Advisor 2013 $64.2B

EXPANDING DISTRIBUTION PARTNERSHIPS HAVE  GENERATED STRONG SALES GROWTH 2.0 Individual Annuities Separately Managed Accounts 1.7 2.5 Mutual Funds 3.3 Full Service Accum 1.5 1.5 1.4 1.4 0.9 1.2 2.8 5.7 2.1 3.8 4.2 3.1 3.8 3.7 2006 2007 2008 2009 2010 $3.5B $8.8B $10.9B $8.0B $12.5B 0.6 1.3 0.2 2.0 37 14.5 6.5 3.0 1.2 2.5 2.3 Total: 10.5 7.6 6.6 2011 2012 2013 CAGR: $13.0B $22.3B $26.4B +34%

BROAD AND DEEP DISTRIBUTION Proprietary provides foundation; 3rd party provides accelerated growth  Product Line New Sales 1st 2nd 3rd NQ Life 39% Retail Life Career Individual Disability Career LifeMark Plus Group Santander Securities Fixed Annuities Career Principal Connection KeyCorp Ins. Agency 38 Rankings and percentages as of 12/31/2013 96% 24% FSA – New Sales Assets FSA – New Sales Case Counts 13% 41% Career Mutual Funds 55% 38% Gallagher Group Benefits Variable Annuities Top 3 represent 30% Career Edward D. Jones 33%

PRINCIPAL INTERNATIONAL AUM as of 12/31/2013 China (2005) Asset Management, Mutual  Funds  AUM of $14.9B CCB‐Principal – a 25%  owned joint venture with  China Construction Bank Hong Kong (1996) Mexico (1993) Annuities, Mutual  Funds, Pensions,  Asset Management AUM of $11.8B Wholly owned Asset Management, Mutual  Funds, Pensions AUM of $3.3B Wholly owned  PRINCIPAL FINANCIAL GROUP Thailand (2010) India (2000) Chile (1995) Annuities, Mutual Funds,  Asset  Management,  Pensions  AUM of $5.5B Wholly owned Cuprum – a 94% owned mutual  fund company AUM of $33.2B 39 Brazil (1999) Annuities, Pensions,  Mutual Funds, Asset  Management Brasilprev – a 25%  owned  joint venture with  Banco do Brasil AUM of $36.5B Claritas – 60% indirectly  owned mutual fund  company AUM of $1.5B Asset Management,    Mutual Funds AUM of $0.6B 65% owned joint venture  with Punjab National and  Vijaya Banks Malaysia (2003) Asset Management, Mutual Funds AUM of $0.8B Wholly owned subsidiary of Malaysian JV Indonesia (2007) Asset Management, Mutual  Funds  AUM of $0.2B Wholly owned subsidiary of  Malaysian JV Conventional & Islamic Asset  Management, Mutual  Singapore (2006) Funds, Pensions Asset Management AUM of $0.7M AUM of $11.1B CIMB‐Principal – 40%  owned  Wholly owned subsidiary  of Malaysian JV  joint venture with CIMB  Group 

PRINCIPAL INTERNATIONAL WE’RE IN THE RIGHT COUNTRIES TEN LARGEST ECONOMIES BY DECADE Current Principal International locations:      Asia Latin America  2020E US$  trn 2030E US$  trn 15.0 U.S. 23.5 China 53.8 China 5.9 China 21.9 U.S. 38.5 1.9 Japan 5.5 Japan 6.1 India 15.0 UK 1.5 Germany 3.3 Germany 5.1 Japan 9.3 1.1 France 1.3 France 2.5 India 4.5 Germany 7.4 UK 1.0 China 1.2 UK 2.3 Brazil 3.9 Brazil 6.3 7 Canada 0.6 Italy 1.1 Italy 2.0 France 3.9 UK 5.8 8 Spain 0.5 Canada 0.7 Brazil 2.1 UK 3.7 France 5.7 9 Brazil 0.5 Brazil 0.6 Canada 1.6 Italy 2.7 Indonesia 4.7 10 China 0.4 Mexico 0.6 Russia 1.5 Russia 2.6 Russia 4.6 1990 US$ trn 1 U.S. 2 2000 US$  trn 5.9 U.S. Japan 3.1 3 Germany 4 2010 US$ trn 10.3 U.S. Japan 4.7 1.7 Germany France 1.2 5 Italy 6 40 SOURCE:  IMF, Standard Chartered Research.

PRINCIPAL INTERNATIONAL LEVERAGING STRONG MARQUEE PARTNERS  WITH OUTSTANDING DISTRIBUTION Joint Venture Partner Partner’s Industry  Ranking Partner’s  Distribution Reach 14,121 branches4 5th largest universal  banking group in ASEAN5 1,080 branches5 2nd largest Nationalized  bank in India6 41 5,362 branches3 2nd largest  listed bank in  world2 Banco do Brasil Largest bank in Latin  America1 6,075 branches7 58.6 million customers3 440 million retail customers4 13.5 million retail customers5 82 million retail customers7 SOURCE: 1Global Finance 2013 in terms of AUM; 2013 based on market capitalization 3Banco do Brasil Annual Report 2012, 4CCB 2012 annual report – customers based on retail debit cards; 5CIMB Group 2012 Annual report – ranking in term of AUM,, 6Indian Banks’ Association 2013 in terms of assets 2013

PRINCIPAL INTERNATIONAL OUR MARKETS AND PRODUCT OFFERING Targeted Markets Pensions Mutual Funds Asset Mgmt Annuities Brazil     Chile     Mexico     China +   Hong Kong    India +     Malaysia/ SE Asia 42  = Where we have a product offering today  = Targeted expansion = 10% of market share or Top 25% of providers

PRINCIPAL  INTERNATIONAL Latin America PROVEN  STRENGTH &  SUCCESS BRAZIL MEXICO CHILE Brasilprev:  #1 in net  deposits 5th largest  AFORE  (by AUM) #1 APV:  PI Chile and  Cuprum 37% market  share #3 in net AUM transfers 25% market  share PRINCIPAL IS 2ND LARGEST  PENSION PROVIDER IN LATIN AMERICA 43 Brazil source: Quantum. 12/12.  Mexico source:  CONSAR & PROCESAR. 5/13.  Chile source:  SP (Superintendencia de Pensiones)  12/12.  Principal is 2nd largest pension provider in Latin America by AUM among multi‐country pension providers.


PRINCIPAL INTERNATIONAL COMPREHENSIVE RETIREMENT PLATFORM Together Principal Financial Chile and Cuprum completes the full spectrum of products for a comprehensive “hire  through retire” approach to the market TOGETHER PRODUCTS: Chile    Mandatory Pension    Voluntary Pensions: AFP Fund Based Mutual Fund Based Mutual Funds   Payout Products: Annuities Based             Structured Payout Life (Accumulation) DISTRIBUTION: Brokers & Independent Agents Retail Alliances Proprietary Sales Force 45 Source: Company information. 

PRINCIPAL  INTERNATIONAL Chile PLATFORM CONTINUUM  Across markets | Across life stages OFFERING A  FULL SET OF  SOLUTIONS APV Mandatory Accumulation APVC/G Retail Mutual  Funds Life Accumulation Programmed Withdrawals Mandatory Payout Annuities Voluntary Payout Annuities INVESTMENT MANAGEMENT 46 APV = Ahorro Previsional Voluntario; APVC/G = Ahorro Previsional Voluntario Colectiveo Retail Mutual  Funds

PRINCIPAL  INTERNATIONAL MALAYSIA HONG KONG #2 in Asset Management Among Top Ten MPF* Providers CHINA INDIA Top Ten  for Mutual Funds 1st mover in advisory  services business Asia BUILDING A  STRONG  FOUNDATION 47 *Mandatory Provident Fund.  Malaysia source:  Lipper. Percentage of market share as of 7/13.  Hong Kong source:  Lipper.  Based on AUM as of 3/13.  China source:  Z‐Ben Advisors. Based on AUM as of 1/13.  India source:  Company data/media  tracking at launch 11/12

PRINCIPAL  INTERNATIONAL Asia CURRENT  STATE OF  PENSION  SYSTEM IN  OUR ASIAN  MARKETS Hong  Kong Malaysia Private  Pension Recently opened door for tax‐incentive  individual savings & private pension providers. Enterprise Annuity framework in place.  Mainland  Regulatory reform could help with individual &  China private pension incentives.  India 48 Privatized pension plan in place today (Mandatory  Provident Fund‐MPF). Currently, no incentives for private sector  involvement.

INVESTMENTS INVESTMENT  PHILOSOPHY  AND STRATEGY  REMAINS THE SAME 49 • Liability‐driven investment approach  • Active asset/liability management • Optimized risk adjusted yields and  returns • High quality, well‐diversified portfolio • Global collaboration and best practices • Portfolio responsibility remains at local  country

INVESTMENTS DIVERSIFIED  PORTFOLIO Invested  Assets & Cash As of 12/31/13 GAAP carrying value Principal Financial Group  Commercial Mortgages 15% Cash 4% Corporate Private Bonds 18% MBS 6% Corporate Public Bonds 28% ABS 5% Other* 10% $69.1 Billion 50 CMBS 6% *  Other includes Equity Securities, Residential Mortgages, Real Estate, Policy Loans, Investment in Equity Method subs,  Direct Finance Leases and Other Investments Government, Agency, State & Political 8%

‐$600 51 Jan‐12 Feb‐12 Mar‐12 Apr‐12 May‐12 Jun‐12 Jul‐12 Aug‐12 Sep‐12 Oct‐12 Nov‐12 Dec‐12 Jan‐13 Feb‐13 Mar‐13 Apr‐13 May‐13 Jun‐13 Jul‐13 Aug‐13 Sep‐13 Oct‐13 Nov‐13 Dec‐13 ASSETS &  LIABILITIES  PERFORMED AS  EXPECTED In millions INVESTMENTS $800 $600 $400 $200 $0 ‐$200 ‐$400 Actual net assets & liabilities Modeled net assets & liabilities

INVESTMENTS Majority of unrealized  losses were never  realized because we  were not forced sellers All numbers shown are pre‐tax $1,600 $1,400 Cumulative CMBS Credit Losses Recorded* $1,200 Cumulative CMBS Losses Realized** Potential Future Credit Losses*** $1,000 In millions CMBS CONTINUES TO  BE WELL  SUITED FOR  OUR LIABILITIES Net Unrealized Losses and Potential Losses Total Net Unrealized CMBS Losses $800 $600 $400 $200 $0 2009 52 2010 2011 2012 * Cumulative CMBS Credit Losses Recorded represent 2009 to present losses due to credit impairments, sales, or trust write‐ downs.  ** Cumulative realized losses since 2009 from sales or trust write‐downs.  The difference between losses recorded and losses  realized are due to impairments.  Impairments are the present value of estimated losses anticipated but not yet passed through  the trust waterfall or realized from selling a distressed security to the market.  Ultimate losses realized on impaired securities may  differ from the impairment estimate. *** Potential Future Credit Losses based on our base case stress scenario for securities currently held as of the reporting period  presented.  This is an estimate.  It represents the average of 1000 modeled scenarios.  This estimate is subject to change.   Potential future losses together with cumulative losses recorded represents an estimate of base case potential cumulative CMBS  losses for securities held during the period from 2009 to the present. . 2013

INVESTMENTS Losses over the next three  years are expected to be  below pricing assumptions.   This assumes no material  downturn of the U.S. or  Global economy. Size of Portfolio (Amortized Cost) as of 12/31/12 CMBS/CMBS CDO = $4.2B $300 $250 $ in millions after‐tax INVESTMENT  LOSS  PROJECTION $350 20 60 Commercial Mortgages = $10.2B 4 Bonds excluding CMBS/CMBS CDO = $40.7B 57 $200 $150 114 247 $100 182 91 36 $50 35 11 25 17 2010 2011 2012 $0 2008 2009 *Loss projections are based on the bond and commercial mortgage portfolio only. 5 7 8 26 4 38 46 36 2013E 2014E 2015E This is one possible loss scenario shown for Principal Life Insurance Company and consolidated subsidiaries.  Portfolio sizes reflect Principal Financial Group U.S. invested assets, excluding the Principal Global Investors segment.  Years 2008‐2012  reflect actual losses for Principal Financial Group, excluding Principal Global Investors segment. Losses are after‐tax. 53 33 39 60

FINANCIALS OPERATING EARNINGS POWER OF OUR  FEE‐BASED  MODEL 2001 30% Current 2018E 15% 20% 30% 15% 20% 60% 70% 40% Continual shift in mix of  business leading to a higher  ROE and more free cash flow Fee 54 Spread Fee includes Full Service Accumulation, Mutual Funds, Principal Global Investors, Principal International.   Spread includes Individual Annuities, Bank and Trust Services, Investment Only, Full Service Payout.   Risk includes U.S. Insurance Solutions.  Risk

FINANCIALS 15% ROE  IS AGAIN  WITHIN  REACH As Reported  2007 $1.1B  $6.5B  16.4% 12.1% 12.1% $8.7B  Return on  equity (x‐OCI)  15% $1.1B Average  equity (x‐OCI) 16.4% 2013 Operating earnings 50‐80 bps average  annual ROE  improvement 55 2007 OCI = Other Comprehensive Income. 2013 2018E Replaced approximately $150M of risk/spread operating earnings with fee-based operating earnings

FINANCIALS ACHIEVING  10‐12%  ANNUAL  OPERATING  EARNINGS  GROWTH ROE expansion  driven by  focusing on the  numerator… 56 + 4‐5% for market  performance + 4‐5% for growth  from sales/NCF + 1‐2% operational  efficiency EARNINGS EQUITY

FINANCIALS EARNINGS EQUITY  GROWS AT A  SLOWER  RATE …and by  managing the  denominator  57 EQUITY  Fee‐based growth  Dividend growth  Opportunistic share repurchases AVERAGE EQUITY (x‐OCI)  GROWTH RATES

FINANCIALS 30% 25% RETURNING  CAPITAL TO  SHAREHOLDERS 33% 34% 40% 50% 25% 2007 Organic Growth 33% Current 30% 2018E Dividends          Available Capital (Acquisitions & share buybacks) • • • • 58 Less capital needed to support organic growth Moving to higher dividend payout ratio Diligently pursuing active acquisition pipeline Opportunistically buying back shares

FINANCIALS Opportunity Year  Announced Rationale 2013 2012 Executing on our  strategy to increase our  global footprint and fee‐ based earnings 7 DIVIDEND INCREASES  SINCE 2008 59 BrasilPrev  Enhance global equity  investment capabilities 2011 AFORE  Entry into Brazil mutual fund  and asset management market 2011 Emerged from financial  crisis in a position of  strength and flexibility  Complete offering in Chile with  marquee pension and savings  franchise 2012 WE’VE PLAYED  OFFENSE SINCE  RECESSION  Expand alternative asset class  capabilities  Establish leadership in emerging  markets fixed income investing 2011  Solidify position as a leader in  Mexican Afore market 2010  23 year extension of successful  JV with Banco do Brasil

FINANCIALS MERGER &  ACQUISITION  CRITERIA Have a diligent  M&A process  that optimizes long‐term results  60 IRR = Internal Rate of Return. 1 ABILITY TO  2 ONBOARD STRATEGIC 3 • Synergies with  multiple lines of  business preferred • Adds scale or a new  niche • Aligns with our  core competencies • Blend local talent  with Principal  expertise DISCIPLINED  • Mid‐teens IRR • More accretive than  PRICING buyback over time

FINANCIALS CAPITAL DEPLOYMENT 2011 Over $1.1 billion in total Annual Common Stock Dividends $215M (27% increase over 2010) 2012 Allocated $2.1 billion Quarterly Common Stock Dividends $230M (70 to 78 cents, 11% increase) Opportunistic Share Repurchases: $300M Opportunistic Share Repurchases: $550M Strategic Acquisitions: $1,595M Strategic Acquisitions: $350M 2013 Allocated $480 million YTD Quarterly Common Stock Dividends ~$288M (23 cents for 1Q13 & 2Q13, 26 cents for 3Q13 & 4Q13) Anti-dilution & Opportunistic Share Repurchases: $150M (~$55M remaining) Strategic Acquisition: $44M 61

Capital Deployment • We expect to deploy $500M-700M in 2014 ̶ 28-cent common stock dividend payable in 1Q14 ̶ Will redeem $100M of surplus notes in 1Q14 ̶ Long term we expect to deploy 65 – 70 percent of our net income with variability in any given year 62 Posted on PFG website: 02/04/2014

FINANCIALS PROS • More Net Investment Income • Lower security benefit costs • Individual Life & fixed deferred WHAT IF… annuities benefit • Potential for more Full Service IMPACT OF A  SLOW‐RISING  INTEREST RATE  ENVIRONMENT Payout pipeline CONS • Fixed income AUM declines • Unrealized gain/loss BOTTOM LINE: Less downside impact means  less upside impact, but still upside 63

Key Business Drivers Outlook Retirement & Investor Services 5‐Year 28‐32% 30‐32% Net revenue  growth 6‐8% (2)‐2% Pre‐tax RONR Guaranteed 5‐7% Pre‐tax RONR Accumulation 6‐8% 75‐80% 5‐Year 2014E Net revenue  growth  Principal Global Investors 14‐17% 7‐10% 30+% 26‐28% 78‐80% Principal International Revenue growth  Pre‐tax margin U.S. Insurance Solutions 5‐Year 2014E Combined* net revenue growth 15‐20% 16‐18% Combined pre‐tax RONR 55‐60% 50‐52% N/A 36% Principal’s share of  combined pre‐tax earnings Specialty Benefits 2014E 4‐8% 3‐5% Pre‐tax operating  margin 16‐21% 14‐16% Premium & fee  growth Individual Life 5‐Year 8‐10% 3‐5% Pre‐tax operating  margin 8‐12% 10‐12% Loss ratio 65‐71% 65‐71% Premium & fee  growth  Estimated After-tax operating losses for Corporate of $130-$150 million in 2014 64 2014E Net revenue = operating revenues less benefits, claims & settlement expenses less dividends to policyholders. RONR = Return on Net Revenue. Pre-tax operating margin = pre-tax operating earnings / premium and fees. *Combined basis includes all Principal International companies at 100%.

Results Demonstrate Relative Strength of  Our Business Model 2001 CAGR (’01-’13) Operating Earnings(1) ($M) $433 $1,060 8% Earnings Per Share(2) $1.20 $3.55 9.5% Assets Under Management ($B)  $98 $483 14% ROE (TTM)(3) 6.9% 12.1% +520 bps Book Value Per Share  (x‐OCI) $17.81 $30.35 5% S&P 500 65 2013 1,148 1,848 4% (1) Excludes discontinued operations. (2) Diluted.  (3) Operating return on average equity excluding other  comprehensive income, based on trailing 12 month period. 

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Principal Financial Group, Des Moines, IA. 30,323 likes · 188 talking about this · 3,255 were here. The Principal is a global investment management...
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Key Business Tools - Principal Financial Group Tools and ...

Key Business Tools - Web Content Viewer (JSR 286) ... Tax-Exempt, the Principal Financial Group, Princor Registered Representative on March 1, 2016
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101 Financial - Get out of Debt, Budget Money, and Build ...

101 Provides financial education classes with personalized instruction, planning and support, and financial tools including our i101 program
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Principal Financial Group - 101 N Broadway St - Walters ...

Principal Financial Group in Walters, reviews by real people. Yelp is a fun and easy way to find, recommend and talk about what’s great and not so great ...
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The Principal Financial Group Family Fun Fest 401-K Challenge

The Principal Financial Group ® Family Fun Fest 401-K Challenge Congratulations to the winners! Congratulations to the Kinston Indians for pitching 401 ...
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Search Job Openings - Home Page

The Principal Financial Group. Search ; Log In ; Menu ; Personal; Employer; Advisor; TPA; Provider Services ... Search Job Openings. Keywords :
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