Principal Financial Group, Inc. Announces Second Quarter Results; Company Also Announces Common Stock Dividend Increase

  Principal Financial Group, Inc. Announces Second Quarter Results; Company
  Also Announces Common Stock Dividend Increase

                              Company Highlights

  *2Q 2014 Operating earnings^1 of $323.1 million, $1.08 per diluted share;
  *2Q 2014 Net income available to common stockholders of $306.3 million,
    $1.03 per diluted share;
  *Assets Under Management (AUM) of $517.9 billion;
  *Return on equity^2 of 13.3 percent;
  *Company declares third quarter 2014 dividend of $0.34 per share of common
    stock, a 6 percent increase over the second quarter 2014 dividend.

Business Wire

DES MOINES, Iowa -- July 24, 2014

Principal Financial Group, Inc. (NYSE: PFG) today announced results for second
quarter 2014.

  *Operating earnings increased 19 percent to a record $323.1 million for
    second quarter 2014, compared to $271.4 million for second quarter 2013.
    Operating earnings per diluted share (EPS) increased 19 percent to $1.08
    for second quarter 2014, compared to $0.91 for second quarter 2013.
  *Net income available to common stockholders for second quarter 2014
    increased 38 percent to a record $306.3 million, or $1.03 per diluted
    share, compared to $222.3 million, or $0.75 per diluted share for second
    quarter 2013.
  *Operating revenues for second quarter 2014 were $2,542.6 million, an
    increase of 10 percent, compared to $2,311.7 million for second quarter
    2013.
  *Quarterly dividend of $0.34 per share of common stock for third quarter
    2014 authorized by its Board of Directors. The dividend will be payable on
    Sept. 26, 2014, to shareholders of record as of Sept. 8, 2014.

“Second quarter 2014 results demonstrate that our growth over the last few
years is sustainable and that the execution of our investment management
strategy continues to excel,” says Larry D. Zimpleman, chairman, president and
chief executive officer. “We continue to benefit from the diversification of
our business model as we capitalize on the growing financial security needs of
individuals and business owners in the markets where we operate. I am
especially pleased with results from our Principal International business,
where I am confident and excited with our position in select emerging markets
and the opportunities that lie ahead.”

Added Terry Lillis, executive vice president and chief financial officer,“The
Principal^® achieved a milestone in the second quarter with total Assets Under
Management (AUM) surpassing the half trillion dollar mark. This is further
proof that we are a global investment management company that continues to
grow by providing the products and solutions customers and advisors seek. The
$0.34 per share common stock dividend for third quarter 2014 is the fourth
increase in five quarters. Our fee-based business model enables us to generate
greater amounts of free cash flow that we deploy through a balanced strategy,
continuing to build both long-term value for shareholders and company growth.”

Other Highlights

Business

  *Record total company AUM of $517.9 billion was up 15 percent over the year
    ago quarter.
  *Total company net cash flows for second quarter were $5.5 billion.
  *Total company return on equity (ROE) excluding AOCI was 13.3 percent, a
    290 basis point increase over second quarter 2013.
  *Retirement and Investor Services Accumulation sales were $6.7 billion in
    the second quarter. This drove growth in account values to a record $251
    billion with $1.6 billion of net cash flows. Highlights include sales of
    $1.4 billion for Full Service Accumulation, $4.7 billion for Principal
    Funds and $0.5 billion for Individual Annuities.
  *Principal Global Investors had record AUM of $307.3 billion, including net
    cash flows of $0.5 billion.
  *Principal International reported record net cash flows of $4.3 billion and
    record AUM of $118.8 billion (excluding $13.7 billion of AUM in our asset
    management joint venture in China, which is not reported in AUM), a 15
    percent increase over the year ago quarter despite a strengthening U.S.
    dollar.
  *Specialty Benefits premium and fees increased 6 percent over the year ago
    quarter and continued to have favorable claims experience with a loss
    ratio of 65.8 percent.

Capital

  *Strong capital position with a 2014 capital deployment expectation now at
    or above the high end of our $500-$700 million range.
  *Paid a second quarter common stock dividend of $0.32 per share on June 27,
    2014, a 14 percent increase over first quarter 2014, and announced a third
    quarter 2014 dividend of $0.34 per share, the fourth increase in five
    quarters. The 2014 dividend through three quarters is 31 percent higher
    than the dividend over the same timeframe a year ago.
  *Repurchased 1.3 million shares of common stock in the second quarter at an
    average price of $47.08.
  *Book value per share, excluding AOCI, was $31.52, up 6 percent over second
    quarter 2013.

Net Income

  *Net income available to common stockholders of $306.3 million for second
    quarter 2014, up 38 percent compared to second quarter 2013 reflecting:

       *Total company operating earnings, which increased 19 percent compared
         to second quarter 2013;
       *Net realized capital gains of $30.8 million, which included:

            *$14.2 million of net credit impairments, related to sales and
              permanent impairments of fixed maturity securities, a 42 percent
              improvement compared to second quarter 2013. This included $22.4
              million of losses on commercial mortgage backed securities,
            *$35.1 million of gains from sales of investment real estate
              during the quarter;

       *Other after-tax adjustments of negative $47.6 million from impact of
         a court ruling on some uncertain tax positions.

Segment Results

Retirement and Investor Services - Accumulation^3
(in millions   Quarter                         Trailing Twelve Months
except
percentages                           %                                 %
or otherwise    2Q14      2Q13      Change    2Q14       2Q13      Change
noted)
Operating       $181.4    $144.4    26%                            
Earnings
                                                 
Net Revenue     $637.1     $578.4     10%        $2,463.3    $2,192.9   12%
Pretax
Return on      35.5%     32.3%              33.3%      30.2%*    
Net Revenue
*Pretax Return on Net Revenue for the trailing twelve months as of the second
quarter 2013 was 31.2  percent after adjusting for the third quarter 2012
actuarial assumption review.


  *Operating Earnings increased $37.0 million primarily due to an increase in
    net revenue and continued expense discipline, resulting in improved pretax
    margins. Full Service Accumulation benefited $6.0 million in second
    quarter 2014 due to higher than expected prepayments and a legal fee
    reimbursement.
  *Net Revenue increased $58.7 million, primarily due to an increase in
    account values driven by positive net cash flows and strong equity
    markets.


Retirement and Investor Services - Guaranteed^4
(in millions except     Quarter                   Trailing Twelve Months
percentages or
otherwise noted)         2Q14   2Q13   % Change  2Q14    2Q13    % Change
Operating Earnings       $30.7  $27.9  10%                       
                                                    
Net Revenue              $53.1   $48.7   9%         $194.3   $169.3   15%
Pretax Return on Net    83.4%  81.9%           81.8%   80.0%   
Revenue
                                                                      

  *Operating Earnings increased $2.8 million primarily due to higher net
    revenue growth while maintaining expense and pricing discipline.
    Investment Only benefited $3.0 million in second quarter 2014 due to
    higher than expected prepayments.
  *Net Revenue increased $4.4 million primarily due to higher than expected
    prepayments.

                                                 
Principal Global Investors
(in millions except    Quarter                      Trailing Twelve Months
percentages or
otherwise noted)       2Q14    2Q13    % Change  2Q14    2Q13    % Change
Operating Earnings     $27.4   $29.0   (6)%                      
                                                    
Operating Revenue      $173.2   $168.2   3%         $741.6   $633.9   17%
Pretax Margin          26.8%    28.7%               24.8%    25.3%
                                                                      
Total PGI Assets
Under Management       $307.3   $271.2   13%
(billions)
Unaffiliated Assets
Under Management      $114.3  $101.4  13%                     
(billions)
                                                                      

  *Operating Earnings decreased $1.6 million. This was primarily due to a $4
    million benefit in second quarter 2013 from a periodic real estate
    performance fee. Excluding this item, earnings were up 10 percent.
  *Operating Revenue increased $5.0 million as a result of higher management
    fees due to growth in AUM. After adjusting for the second quarter 2013
    periodic real estate performance fee, operating revenue was up 8 percent.

                                             
Principal International
(in millions       Quarter                      Trailing Twelve Months
except
percentages or     2Q14    2Q13    % Change  2Q14      2Q13      % Change
otherwise noted)
Operating          $68.0   $58.3   17%                           
Earnings
                                                
Combined^5 Net     $390.8   $338.0   16%        $1,450.4   $1,224.3   18%
Revenue
Combined Pretax
Return on Net      52.7%    55.5%               51.4%      55.7%
Revenue
                                                                      
Assets Under
Management        $118.8  $102.9  15%                         
(billions)
                                                                      

  *Operating Earnings increased $9.7 million due to growth in the business.
    Current quarter results benefited $5.5 million relative to the expected
    returns on the required encaje investments in Chile and Mexico. Results
    from the prior year quarter were negatively impacted by $7.4 million
    relative to expected encaje returns. On a local currency basis,
    normalized^6 second quarter 2014 operating earnings grew 13 percent
    compared to the prior year quarter.
  *Combined Net Revenue increased $52.8 million due the growth in AUM from
    positive net cash flows and improved market performance.

                                              
Individual Life
(in millions     Quarter                          Trailing Twelve Months
except
percentages                            %                                %
or otherwise     2Q14      2Q13      Change    2Q14      2Q13      Change
noted)
Operating        $20.0     $21.5     (7)%                         
Earnings
                                                  
Premium and      $231.6     $226.5     2%         $907.8     $932.6     (3)%
Fees
Pretax
Operating       11.9%     13.3%              14.1%     3.1%*     
Margin
*Pretax Operating Margin for the trailing twelve months as of second quarter
2013 was 13.7  percent after adjusting for the third quarter 2012 actuarial
assumption review.


  *Operating Earnings decreased $1.5 million due to fluctuations in mortality
    experience.
  *Premium and Fees increased $5.1 million. Sales excluding Universal Life
    with Secondary Guarantee sales were up 11 percent compared to the year ago
    quarter.

                                             
Specialty Benefits
(in millions    Quarter                          Trailing Twelve Months
except
percentages                           %                                 %
or otherwise    2Q14      2Q13      Change    2Q14       2Q13      Change
noted)
Operating       $29.0     $25.7     13%                            
Earnings
                                                 
Premium and     $394.9     $372.3     6%         $1,533.7    $1,467.5   5%
Fees
Pretax
Operating       11.5%      10.6%                 11.5%       9.9%*
Margin
                                                                        
Incurred       65.8%     66.7%              65.8%      67.5%     
Loss Ratio
*Pretax Operating Margin for the trailing twelve months as of second quarter
2013 was 10.1 percent after adjusting for the third quarter 2012 actuarial
assumption review.


  *Operating Earnings increased $3.3 million due to growth in the business
    and improved claims experience.
  *Premium and Fees increased $22.6 million reflecting strong persistency and
    sales.
  *Incurred Loss Ratio continued to perform well, at the lower end of our
    targeted range.

                                                
Corporate
(in millions except percentages or otherwise      Quarter
noted)                                            2Q14     2Q13     % Change
Operating Losses                                 ($33.4)  ($35.4)  6%
                                                                   

  *Operating Losses improved $2.0 million. Results reflect reduced debt
    expense and are in-line with outlook expectations.

Forward looking and cautionary statements
This press release contains 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 March 31,
2014, 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; conditions in the
global capital markets and the economy generally; continued volatility or
declines in the equity, bond or real estate 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 DAC 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.

Use of Non-GAAP Financial Measures
The company uses a number of non-GAAP financial measures that management
believes are useful to investors because they illustrate the performance of
normal, ongoing operations, which is important in understanding and evaluating
the company’s financial condition and results of operations. They are not,
however, a substitute for U.S. GAAP financial measures. Therefore, the company
has provided reconciliations of the non-GAAP measures to the most directly
comparable U.S. GAAP measure at the end of the release. The company adjusts
U.S. GAAP 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
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.

Earnings Conference Call
On Friday, July 25, 2014 at 10:00 a.m. (ET), Chairman, President and Chief
Executive Officer Larry Zimpleman and Executive Vice President and Chief
Financial Officer Terry Lillis will lead a discussion of results, asset
quality and capital adequacy during a live conference call, which can be
accessed as follows:

  *Via live Internet webcast. Please go to www.principal.com/investor at
    least 10-15 minutes prior to the start of the call to register, and to
    download and install any necessary audio software.
  *Via telephone by dialing 866-427-0175 (U.S. and Canadian callers) or
    706-643-7701 (International callers) approximately 10 minutes prior to the
    start of the call. The access code is 66303168.
  *Replay of the earnings call via telephone is available by dialing
    855-859-2056 (U.S. and Canadian callers) or 404-537-3406 (International
    callers). The access code is 66303168. This replay will be available
    approximately two hours after the completion of the live earnings call
    through the end of day August 1, 2014.
  *Replay of the earnings call via webcast as well as a transcript of the
    call will be available after the call at: www.principal.com/investor.

The company's financial supplement for second quarter 2014 is currently
available at www.principal.com/investor, and may be referred to during the
call. Slides related to the call will be available at
www.principal.com/investor approximately one-half hour prior to call start
time.

About the Principal Financial Group
The Principal Financial Group^® (The Principal^®)^7 is a global investment
management leader offering retirement services, insurance solutions and asset
management. The Principal offers businesses, individuals and institutional
clients a wide range of financial products and services, including retirement,
asset management and insurance through its diverse family of financial
services companies. Founded in 1879 and a member of the FORTUNE 500^®, the
Principal Financial Group has $517.9 billion in Assets Under Management^8 and
serves some 19.4 million customers worldwide from offices in Asia, Australia,
Europe, Latin America and the United States. Principal Financial Group, Inc.
is traded on the New York Stock Exchange under the ticker symbol PFG. For more
information, visit www.principal.com.

Summary of Segment and Principal Financial Group, Inc. Results


                              
                               

                               Operating Earnings (Loss)*
                                in millions

                                Three Months Ended,    Six Months Ended,
Segment                       06/30/14   06/30/13   06/30/14   06/30/13
Retirement and Investor       $ 212.1   $ 172.3   $ 428.6   $ 342.3  
Services
Principal Global Investors     27.4     29.0     54.3     49.3   
Principal International        68.0     58.3     131.3    102.9  
U.S. Insurance Solutions       49.0     47.2     92.4     82.9   
Corporate                      (33.4 )   (35.4 )   (66.4 )   (72.7  )
Operating Earnings            $ 323.1   $ 271.4   $ 640.2   $ 504.7  
Net realized capital gains     30.8     (47.6 )   7.9      (104.0 )
(losses), as adjusted
Other after-tax adjustments    (47.6 )   (1.5  )   (48.1 )   (0.1   )
Net income available to       $ 306.3   $ 222.3   $ 600.0   $ 400.6  
common stockholders

                                Per Diluted Share
                               Three Months Ended,    Six Months Ended,
                              06/30/14   06/30/13   06/30/14   06/30/13
Operating Earnings            $ 1.08    $ 0.91    $ 2.14    $ 1.70   
Net realized capital gains     0.10     (0.16 )   0.03     (0.35  )
(losses), as adjusted
Other after-tax adjustments    (0.15 )   0.00     (0.16 )   0.00   
Adjustment for redeemable      0.00     0.00     (0.03 )   0.00   
noncontrolling interest
Net income                    $ 1.03    $ 0.75    $ 1.98    $ 1.35   
Weighted-average diluted       298.3    297.2    299.0    297.0  
common shares outstanding
                                                                

*Operating earnings versus U.S. GAAP (GAAP) net income available to common
stockholders
Management uses operating earnings, which excludes the effect of net realized
capital gains and losses, as adjusted, and other after-tax adjustments, for
goal setting, as a basis for determining employee compensation, and evaluating
performance on a basis comparable to that used by investors and securities
analysts. Segment operating earnings are determined by adjusting U.S. GAAP net
income available to common stockholders for net realized capital gains and
losses, as adjusted, and other after-tax adjustments the company believes are
not indicative of overall operating trends. Note: it is possible these
adjusting items have occurred in the past and could recur in future reporting
periods. While these items may be significant components in understanding and
assessing our consolidated financial performance, management believes the
presentation of segment operating earnings enhances the understanding of
results of operations by highlighting earnings attributable to the normal,
ongoing operations of the company’s businesses.


Principal Financial Group, Inc.
Results of Operations
(in millions)
                                                  
                         Three Months Ended,        Six Months Ended,
                         06/30/14     06/30/13     06/30/14     06/30/13
Premiums and other       $ 835.9      $ 737.0      $ 1,639.4    $ 1,428.7
considerations
Fees and other             855.3         804.3         1,684.9       1,537.9
revenues
Net investment income     851.4      770.4      1,717.6    1,583.4 
Total operating           2,542.6    2,311.7    5,041.9    4,550.0 
revenues
                                                                   
Benefits, claims and       1,261.4       1,101.2       2,484.9       2,200.6
settlement expenses
Dividends to               44.6          47.5          90.3          95.8
policyholders
Commissions                190.1         186.0         380.8         365.6
Capitalization of DAC      (97.7   )     (112.4  )     (193.6  )     (236.6  )
Amortization of DAC        57.9          55.5          125.0         112.7
Depreciation and           30.5          29.4          59.4          51.7
amortization
Interest expense on        33.1          36.1          68.1          72.1
corporate debt
Compensation and other    597.3      609.0      1,190.9    1,224.3 
Total expenses            2,117.2    1,952.3    4,205.8    3,886.2 
                                                                   
Operating earnings
before tax,
noncontrolling             425.4         359.4         836.1         663.8
interest and preferred
stock dividends
Less:
Income tax                 89.5          73.7          152.7         133.1
Operating earnings
attributable to            4.5           6.0           26.7          9.5
noncontrolling
interest
Preferred stock           8.3        8.3        16.5       16.5    
dividends
Operating earnings       $ 323.1     $ 271.4     $ 640.2     $ 504.7   
                                                                   
Net realized capital
gains (losses), as         30.8          (47.6   )     7.9           (104.0  )
adjusted
Other after-tax           (47.6   )   (1.5    )   (48.1   )   (0.1    )
adjustments
Net income available     $ 306.3     $ 222.3     $ 600.0     $ 400.6   
to common stockholders
                                                                     


Selected Balance Sheet Statistics
                                       
                                         
                                         Period Ended,
                                         6/30/14     12/31/13    6/30/13
Total assets (in billions)               $ 218.3     $ 208.2     $ 196.5
Total common equity (in millions)        $ 9,859.8     $ 9,142.2     $ 8,761.4
Total common equity excluding
accumulated other comprehensive income   $ 9,260.4     $ 8,959.0     $ 8,761.9
(in millions)
End of period common shares                293.8         295.2         293.9
outstanding (in millions)
Book value per common share              $ 33.56       $ 30.97       $ 29.81
Book value per common share excluding    $ 31.52       $ 30.35       $ 29.81
accumulated other comprehensive income
                                                                       


Principal Financial Group, Inc.
Reconciliation of Non-GAAP Financial Measures to U.S. GAAP
(in millions, except as indicated)
                                                  
                         Three Months Ended,        Six Months Ended,
                         06/30/14     06/30/13     06/30/14     06/30/13
Diluted Earnings Per                                           
Common Share:
Operating earnings       $ 1.08        $ 0.91        $ 2.14        $ 1.70
Net realized capital       0.10          (0.16   )     0.03          (0.35   )
gains (losses)
Other after-tax            (0.15   )     -             (0.16   )     -
adjustments
Adjustment for
redeemable                -          -          (0.03   )   -       
noncontrolling
interest
Net income               $ 1.03      $ 0.75      $ 1.98      $ 1.35    
                                                                   
Book Value Per Common
Share Excluding
Accumulated Other
Comprehensive Income:
Book value per common
share excluding          $ 31.52       $ 29.81       $ 31.52       $ 29.81
accumulated  other
comprehensive income
Net unrealized capital     3.82          2.36          3.82          2.36
gains
Foreign currency           (1.27   )     (0.79   )     (1.27   )     (0.79   )
translation
Net unrecognized
postretirement benefit    (0.51   )   (1.57   )   (0.51   )   (1.57   )
obligations
Book value per common
share including          $ 33.56     $ 29.81     $ 33.56     $ 29.81   
accumulated  other
comprehensive income
                                                                   
Operating Revenues:
RIS                      $ 1,265.1     $ 1,148.8     $ 2,526.3     $ 2,251.1
PGI                        173.2         168.2         344.3         321.9
PI                         357.3         275.1         657.7         522.6
USIS                       811.4         773.0         1,615.8       1,551.0
Corporate                 (64.4   )   (53.4   )   (102.2  )   (96.6   )
Total operating            2,542.6       2,311.7       5,041.9       4,550.0
revenues
Net realized capital
gains (losses) and         64.3          (101.5  )     43.2          (176.7  )
related adjustments
Exited group medical      (0.2    )   0.4        0.2        4.0     
insurance business
Total GAAP revenues      $ 2,606.7   $ 2,210.6   $ 5,085.3   $ 4,377.3 
                                                                   
Operating Earnings:
RIS                      $ 212.1       $ 172.3       $ 428.6       $ 342.3
PGI                        27.4          29.0          54.3          49.3
PI                         68.0          58.3          131.3         102.9
USIS                       49.0          47.2          92.4          82.9
Corporate                 (33.4   )   (35.4   )   (66.4   )   (72.7   )
Total operating            323.1         271.4         640.2         504.7
earnings
Net realized capital
gains (losses) and         30.8          (47.6   )     7.9           (104.0  )
related adjustments
Other after-tax           (47.6   )   (1.5    )   (48.1   )   (0.1    )
adjustments
Net income available     $ 306.3     $ 222.3     $ 600.0     $ 400.6   
to common stockholders
                                                                   
Net Realized Capital
Gains (Losses):
Net realized capital
gains (losses), as       $ 30.8        $ (47.6   )   $ 7.9         $ (104.0  )
adjusted
Certain derivative and
hedging-related            22.7          21.0          44.5          45.1
adjustments
Amortization of DAC
and sale inducement        13.5          (15.0   )     23.2          (18.1   )
costs
Certain market value
adjustments of             0.1           0.4           (0.3    )     0.3
embedded derivatives
Capital gains              6.2           4.8           9.3           10.9
distributed
Tax impacts                13.6          (44.1   )     3.0           (65.8   )
Noncontrolling             0.1           -             0.1           -
interest capital gains
Recognition of            (0.2    )   0.4        (0.3    )   0.6     
front-end fee revenues
GAAP net realized        $ 86.8      $ (80.1   )  $ 87.4      $ (131.0  )
capital gains (losses)
                                                                   
Other After-Tax
Adjustments:
Losses associated with
exited group             $ (0.1    )   $ (1.5    )   $ (0.6    )   $ (0.1    )
medicalinsurance
business
Impact of court ruling
on some uncertain tax     (47.5   )   -          (47.5   )   -       
positions
Total other after-tax    $ (47.6   )  $ (1.5    )  $ (48.1   )  $ (0.1    )
adjustments
                                                                             

                                                     
Principal Financial Group, Inc.
Principal International Net Revenue Reconciliation
(in millions)
                                                         
                               Three Months Ended,      Six Months Ended,
                               6/30/14     6/30/13     6/30/14     6/30/13
                                                                  
Total combined net revenue     $  390.8     $  338.0     $  749.2     $  657.0
Add:
Principal International's
share of unconsolidated           24.8         21.9         45.9         45.7
joint ventures' net income
Less:
Unconsolidated joint
ventures' net revenue at          250.7        207.3        473.0        430.7
100%
Other adjustments                1.2        0.5        2.5        1.0
Net revenue*                   $  163.7    $  152.1    $  319.6    $  271.0
                                                                      
* Net revenue is defined as total operating revenues less benefits, claims and
settlement expenses and dividends to policyholders.
                                                                      

^1 Use of non-GAAP financial measures is discussed in this release after
segment results. Operating Earnings is after tax.
^2 Return on equity is excluding AOCI (Accumulated Other Comprehensive
Income.)
^3 RIS Accumulation: includes Full Service Accumulation, Principal Funds,
Individual Annuities and Bank and Trust Services.
^4 RIS Guaranteed: includes Investment Only and Full Service Payout.
^5 Combined basis: all Principal International companies (including joint
ventures) at 100%.
^6 Adjusted for the expected encaje return, foreign exchange rates and the
Brazil amortization change.
^7 “The Principal Financial Group” and “The Principal” are registered service
marks of Principal Financial Services, Inc., a member of the Principal
Financial Group.
^8 As of June 30, 2014.

Contact:

Principal Financial Group, Inc.
Media contact:
Susan Houser, 515-248-2268
houser.susan@principal.com
or
Investor contact:
John Egan, 515-235-9500
egan.john@principal.com
 
Press spacebar to pause and continue. Press esc to stop.