[July 23, 2015] |
|
Principal Financial Group, Inc. Announces Second Quarter Results; Company Also Announces Common Stock Dividend
Principal Financial Group, Inc. (NYSE: PFG) today announced results for
second quarter 2015.
-
Operating earnings increased to $323.9 million for second
quarter 2015, compared to $323.1 million for second quarter 2014.
After adjusting for normalizing items and foreign exchange rates,
operating earnings increased 10 percent over second quarter 2014.
Operating earnings per diluted share (EPS) increased 1 percent to
$1.09 for second quarter 2015, compared to $1.08 for second quarter
2014.
-
Net income available to common stockholders for second quarter
2015 decreased to $241.1 million, or 81 cents per diluted share,
compared to $306.3 million, or $1.03 per diluted share for second
quarter 2014.
-
Operating revenues increased 34 percent in second quarter 2015
to $3,406.8 million from higher sales and fee income, compared to
$2,542.6 million for second quarter 2014.
-
Fee income3 increased 6 percent to
$908.5 million for the second quarter 2015, compared to $855.3
million for second quarter 2014.
-
Quarterly dividend of 38 cents per share of common stock for
third quarter 2015 was authorized by the company's Board of Directors.
The dividend will be payable on Sept. 25, 2015, to shareholders of
record as of Sept. 4, 2015.
"The strong financial performance we delivered in the second quarter
further demonstrates the strength of our diversified business model and
the underlying fundamentals of our business. We achieved these strong
results despite continued macroeconomic volatility, including ongoing
pressure from foreign exchange rates," says Larry D. Zimpleman, chairman
and chief executive officer. "Outstanding investment performance,
competitive outcomes-based solutions and strong distribution
partnerships worldwide drove total company year-to-date net cash flows
up 71 percent to $17.6 billion, leading to record assets under
management of $540 billion at quarter end."
Added Terry Lillis, executive vice president and chief financial
officer, "We continue to grow the percentage of earnings that come from
our less capital-intensive, fee-based businesses, enabling us to
generate increased free cash flow that we can deploy through a variety
of ways to increase value for shareholders. So far in 2015, we've
announced plans to deploy more than $800 million of capital. In addition
to the common stock dividends we paid in the first and second quarters,
the current low interest rate environment provided us the opportunity to
issue debt and redeem our preferred stock. Looking ahead to the second
half of the year, we will pay a 38 cent per share common stock dividend;
we expect to close on our acquisition of AXA's Hong Kong pension
business on Sept. 1; and we'll continue repurchasing shares."
Other Highlights
Business
-
Assets under management as of June 30, 2015, were a record $539.9
billion, with net cash flows for second quarter of $8.2 billion and
$17.6 billion year to date.
-
Retirement and Investor Services Accumulation sales were $7.6 billion
in the second quarter. Record account values of $266.9 billion
included sales of $1.6 billion for Full Service Accumulation, $5.4
billion for Principal Funds, and $0.8 billion for Individual Annuities.
-
Principal Funds had its 22nd consecutive quarter of
positive net cash flows, which contributed to record operating
earnings for the quarter.
-
Record Full Service Payout had sales of $0.7 billion in the second
quarter.
-
Principal Global Investors had record total AUM of $328.4 billion,
including net cash flows of $4.2 billion.
-
Principal International reported strong net cash flows of $3.6 billion
and AUM of $117.5 billion. On a local currency basis, AUM increased 21
percent over the year ago quarter. Total Principal International AUM
hit a record $151.7 billion when including China, which is not part of
reported AUM.
-
Individual Life second quarter premium and fees were up 4 percent over
the year ago quarter.
-
Specialty Benefits premium and fees increased 8 percent over the year
ago quarter and the division continued to have favorable claims
experience by maintaining disciplined underwriting.
-
Investment performance was strong, with 87 percent of Principal's
investment options in the top two quartiles of Morningstar rankings on
a one and three-year basis and 91 percent in the top two quartiles on
a five-year basis at quarter end.
Capital
-
A strong capital position with a 2015 capital deployment target at the
upper end of $800.0 million to $1.0 billion.
-
Paid a second quarter common stock dividend of 38 cents per share
on June 26, 2015, and announced a third quarter 2015 common stock
dividend of 38 cents per share.
-
Included in the full-year 2015 range is $335 million for the
previously announced acquisition of AXA's pension business in Hong
Kong, which is scheduled to close on Sept. 1.
-
Successfully accessed the capital markets in the second quarter by
issuing $400 million of senior notes due in 2025 and $400 million of
junior subordinated notes due in 2055, which enabled the company to
redeem $550 million of preferred stock as well as leverage the current
low interest rate environment.
Net Income
-
Second quarter 2015 net income available to common stockholders of
$241.1 million was down 21 percent compared to second quarter 2014
reflecting:
-
Total company operating earnings that were flat compared to second
quarter 2014 and negatively impacted by foreign exchange rates; and
-
Net realized capital losses of $82.8 million, including:
-
$2.2 million loss due to credit impairments related to sales
and permanent impairments of fixed maturity securities. This
is an 85 percent improvement in credit impairments from second
quarter 2014 as losses on commercial mortgage backed
securities continue to mitigate;
-
$70.2 million of losses on derivatives and related activities
used for hedging financial risks due to strong annuity sales
and rising interest rates; and
-
$18.4 million of losses in Other predominantly due to the
recognition of unamortized corporate real estate expense.
Segment Results
Retirement and Investor Services - Accumulation4
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
Trailing Twelve Months
|
|
2Q15
|
|
2Q14
|
|
% Change
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$189.5
|
|
$181.4
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
$682.3
|
|
$637.1
|
|
7%
|
|
$2,624.3
|
|
$2,463.3
|
|
7%
|
Pretax Return on Net Revenue
|
|
33.4%
|
|
35.5%
|
|
|
|
33.0%
|
|
33.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Operating Earnings increased $8.1 million primarily due to
higher net revenue growth. Additionally, Individual Annuities results
benefited $3.0 million from higher than expected variable investment
income. In the prior year quarter, Full Service Accumulation benefited
$6.0 million from higher than expected variable investment income and
a legal fee reimbursement.
-
Net Revenue increased $45.2 million, primarily due to an
increase in account values driven by positive net cash flows and
favorable equity markets on a year over year basis.
Retirement and Investor Services - Guaranteed5
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
Trailing Twelve Months
|
|
2Q15
|
|
2Q14
|
|
% Change
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$27.2
|
|
$30.7
|
|
(11)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue
|
|
$48.3
|
|
$53.1
|
|
(9)%
|
|
$182.9
|
|
$194.3
|
|
(6)%
|
Pretax Return on Net Revenue
|
|
80.1%
|
|
83.4%
|
|
|
|
80.1%
|
|
81.8%
|
|
|
-
Operating Earnings decreased $3.5 million primarily due to
second quarter 2014 results benefiting $3.0 million from higher than
expected variable investment income.
-
Net Revenue decreased $4.8 million primarily due to a decline
in variable investment income.
Principal Global Investors
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
Trailing Twelve Months
|
|
2Q15
|
|
2Q14
|
|
% Change
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$31.5
|
|
$27.4
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenue
|
|
$188.4
|
|
$173.2
|
|
9%
|
|
$756.6
|
|
$741.6
|
|
2%
|
Pretax Margin
|
|
27.1%
|
|
26.8%
|
|
|
|
26.6%
|
|
24.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total PGI Assets Under Management (billions)
|
|
$328.4
|
|
$307.3
|
|
7%
|
|
|
|
|
|
|
Unaffiliated Assets Under Management (billions)
|
|
$121.1
|
|
$114.3
|
|
6%
|
|
|
|
|
|
|
-
Operating Earnings increased $4.1 million. This was primarily
due to revenue growth and scale leading to improved margins.
-
Operating Revenue increased $15.2 million due to higher
management fees, performance fees and transaction fees.
Principal International
|
|
|
|
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
Trailing Twelve Months
|
|
2Q15
|
|
2Q14
|
|
% Change
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$59.3
|
|
$68.0
|
|
(13)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined6 Net Revenue
|
|
$380.3
|
|
$390.8
|
|
(3)%
|
|
$1,558.5
|
|
$1,450.4
|
|
7%
|
Combined Pretax Return on Net Revenue
|
|
47.3%
|
|
52.7%
|
|
|
|
50.5%
|
|
51.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management (billions)
|
|
$117.5
|
|
$118.8
|
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Operating Earnings, which were significantly impacted by
changes in foreign exchange rates, decreased $8.7 million. The current
quarter results were also negatively impacted by lower than expected
encaje returns, which were partially offset by higher than expected
inflation. Results from the prior year quarter benefited by $5.5
million relative to expected encaje returns. On a local currency
basis, Principal International generated mid-teens normalized7
operating earnings growth in the second quarter.
-
Combined Net Revenue decreased $10.5 million primarily due to
the strengthening U.S. dollar. On a local currency basis, combined net
revenue improved 19 percent driven by growth in AUM from positive net
cash flows and market performance.
Individual Life
|
|
|
|
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
Trailing Twelve Months
|
|
2Q15
|
|
2Q14
|
|
% Change
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$26.3
|
|
$20.0
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium and Fees
|
|
$240.0
|
|
$231.6
|
|
4%
|
|
$957.3
|
|
$907.8
|
|
5%
|
Pretax Operating Margin
|
|
15.3%
|
|
11.9%
|
|
|
|
19.6%*
|
|
14.1%
|
|
|
*Pretax Operating Margin for the trailing twelve months as of
second quarter 2015 was 13.4 percent after adjusting for the third
quarter 2014 actuarial assumption review.
|
|
-
Operating Earnings increased $6.3 million from the year ago
quarter due to improved mortality.
-
Premium and Fees increased $8.4 million, in line with our
expected growth rate.
Specialty Benefits
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
Trailing Twelve Months
|
|
2Q15
|
|
2Q14
|
|
% Change
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$32.5
|
|
$29.0
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium and Fees
|
|
$428.2
|
|
$394.9
|
|
8%
|
|
$1,675.2
|
|
$1,533.7
|
|
9%
|
Pretax Operating Margin
|
|
12.0%
|
|
11.5%
|
|
|
|
11.4%
|
|
11.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incurred Loss Ratio
|
|
65.2%
|
|
65.8%
|
|
|
|
64.4%
|
|
65.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Operating Earnings increased $3.5 million primarily due to
growth in the business and improved claims experience.
-
Premium and Fees increased $33.3 million reflecting strong
retention and growth across all products.
-
Incurred Loss Ratio continued to perform well and at the lower
end of the targeted range.
Corporate
|
(in millions except percentages or otherwise noted)
|
|
Quarter
|
|
2Q15
|
|
2Q14
|
|
% Change
|
Operating Earnings
|
|
$(42.4)
|
|
$(33.4)
|
|
(27)%
|
|
|
|
|
|
|
|
-
Operating Losses of $42.4 million were impacted by an
additional $10.0 million of expenses related to the preferred stock
redemption in the second quarter. This was partially offset by the
timing of certain expenses.
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, 2014, and in the company's
quarterly report on Form 10-Q for the quarter ended March 31, 2015,
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 24, 2015 at 10:00
a.m. (ET), Chairman and Chief Executive Officer Larry Zimpleman,
President and Chief Operating Officer Dan Houston, 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 71099087.
-
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 71099087. This replay will
be available approximately two hours after the completion of the live
earnings call through the end of day July 31, 2015.
-
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 and a slide detailing normalizing
items for second quarter 2015 are currently available at www.principal.com/investor.
Other slides that will be referenced during 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®)8 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 $539.9 billion in assets under management9
and serves some 20.1 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
Segment
|
|
|
|
Operating Earnings (Loss)* in millions
|
|
Three Months Ended,
|
|
Six Months Ended,
|
|
06/30/15
|
|
06/30/14
|
|
06/30/15
|
|
06/30/14
|
Retirement and Investor Services
|
|
$
|
216.7
|
|
|
$
|
212.1
|
|
|
$
|
427.6
|
|
|
$
|
428.6
|
|
Principal Global Investors
|
|
|
31.5
|
|
|
|
27.4
|
|
|
|
62.2
|
|
|
|
54.3
|
|
Principal International
|
|
|
59.3
|
|
|
|
68.0
|
|
|
|
119.2
|
|
|
|
131.3
|
|
U.S. Insurance Solutions
|
|
|
58.8
|
|
|
|
49.0
|
|
|
|
113.9
|
|
|
|
92.4
|
|
Corporate
|
|
|
(42.4
|
)
|
|
|
(33.4
|
)
|
|
|
(72.6
|
)
|
|
|
(66.4
|
)
|
Operating Earnings
|
|
$
|
323.9
|
|
|
$
|
323.1
|
|
|
$
|
650.3
|
|
|
$
|
640.2
|
|
Net realized capital gains (losses), as adjusted
|
|
|
(82.8
|
)
|
|
|
30.8
|
|
|
|
(69.7
|
)
|
|
|
7.9
|
|
Other after-tax adjustments
|
|
|
-
|
|
|
|
(47.6
|
)
|
|
|
74.7
|
|
|
|
(48.1
|
)
|
Net income available to common stockholders
|
|
$
|
241.1
|
|
|
$
|
306.3
|
|
|
$
|
655.3
|
|
|
$
|
600.0
|
|
|
|
|
Per Diluted Share
|
|
Three Months Ended,
|
|
Six Months Ended,
|
|
06/30/15
|
|
06/30/14
|
|
06/30/15
|
|
06/30/14
|
Operating Earnings
|
|
$
|
1.09
|
|
|
$
|
1.08
|
|
|
$
|
2.18
|
|
|
$
|
2.14
|
|
Net realized capital gains (losses), as adjusted
|
|
|
(0.28
|
)
|
|
|
0.10
|
|
|
|
(0.23
|
)
|
|
|
0.03
|
|
Other after-tax adjustments
|
|
|
0.00
|
|
|
|
(0.15
|
)
|
|
|
0.25
|
|
|
|
(0.16
|
)
|
Adjustment for redeemable noncontrolling interest
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
(0.03
|
)
|
Net income
|
|
$
|
0.81
|
|
|
$
|
1.03
|
|
|
$
|
2.20
|
|
|
$
|
1.98
|
|
Weighted-average diluted common shares outstanding
|
|
|
298.4
|
|
|
|
298.3
|
|
|
|
298.4
|
|
|
|
299.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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,
|
|
|
06/30/15
|
|
06/30/14
|
|
06/30/15
|
|
06/30/14
|
Premiums and other considerations
|
|
$
|
1,682.4
|
|
|
$
|
835.9
|
|
|
$
|
2,598.8
|
|
|
$
|
1,639.4
|
|
Fees and other revenues
|
|
|
908.5
|
|
|
|
855.3
|
|
|
|
1,793.3
|
|
|
|
1,684.9
|
|
Net investment income
|
|
|
815.9
|
|
|
|
851.4
|
|
|
|
1,559.3
|
|
|
|
1,717.6
|
|
Total operating revenues
|
|
|
3,406.8
|
|
|
|
2,542.6
|
|
|
|
5,951.4
|
|
|
|
5,041.9
|
|
|
|
|
|
|
|
|
|
|
Benefits, claims and settlement expenses
|
|
|
2,057.2
|
|
|
|
1,261.4
|
|
|
|
3,284.5
|
|
|
|
2,484.9
|
|
Dividends to policyholders
|
|
|
41.1
|
|
|
|
44.6
|
|
|
|
82.8
|
|
|
|
90.3
|
|
Commissions
|
|
|
206.6
|
|
|
|
190.1
|
|
|
|
423.2
|
|
|
|
380.8
|
|
Capitalization of DAC
|
|
|
(92.1
|
)
|
|
|
(97.7
|
)
|
|
|
(191.9
|
)
|
|
|
(193.6
|
)
|
Amortization of DAC
|
|
|
52.5
|
|
|
|
57.9
|
|
|
|
101.3
|
|
|
|
125.0
|
|
Depreciation and amortization
|
|
|
29.9
|
|
|
|
30.5
|
|
|
|
59.2
|
|
|
|
59.4
|
|
Interest expense on corporate debt
|
|
|
37.5
|
|
|
|
33.1
|
|
|
|
70.1
|
|
|
|
68.1
|
|
Compensation and other
|
|
|
649.8
|
|
|
|
597.3
|
|
|
|
1,289.9
|
|
|
|
1,190.9
|
|
Total expenses
|
|
|
2,982.5
|
|
|
|
2,117.2
|
|
|
|
5,119.1
|
|
|
|
4,205.8
|
|
|
|
|
|
|
|
|
|
|
Operating earnings before tax, noncontrolling interest and
preferred stock dividends
|
|
|
424.3
|
|
|
|
425.4
|
|
|
|
832.3
|
|
|
|
836.1
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
75.8
|
|
|
|
89.5
|
|
|
|
147.5
|
|
|
|
152.7
|
|
Operating earnings attributable to noncontrolling interest
|
|
|
8.1
|
|
|
|
4.5
|
|
|
|
9.8
|
|
|
|
26.7
|
|
Preferred stock dividends
|
|
|
8.3
|
|
|
|
8.3
|
|
|
|
16.5
|
|
|
|
16.5
|
|
Excess of redemption value over carrying value of preferred shares
redeemed
|
|
|
8.2
|
|
|
|
-
|
|
|
|
8.2
|
|
|
|
-
|
|
Operating earnings
|
|
$
|
323.9
|
|
|
$
|
323.1
|
|
|
$
|
650.3
|
|
|
$
|
640.2
|
|
|
|
|
|
|
|
|
|
|
Net realized capital gains (losses), as adjusted
|
|
|
(82.8
|
)
|
|
|
30.8
|
|
|
|
(69.7
|
)
|
|
|
7.9
|
|
Other after-tax adjustments
|
|
|
-
|
|
|
|
(47.6
|
)
|
|
|
74.7
|
|
|
|
(48.1
|
)
|
Net income available to common stockholders
|
|
$
|
241.1
|
|
|
$
|
306.3
|
|
|
$
|
655.3
|
|
|
$
|
600.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet Statistics
|
|
|
|
|
|
Period Ended,
|
|
06/30/15
|
|
12/31/14
|
|
06/30/14
|
Total assets (in billions)
|
|
$
|
222.3
|
|
|
$
|
219.1
|
|
|
$
|
218.3
|
|
Total common equity (in millions)
|
|
$
|
9,693.4
|
|
|
$
|
9,642.0
|
|
|
$
|
9,859.8
|
|
Total common equity excluding accumulated other comprehensive income
(in millions)
|
|
$
|
10,020.0
|
|
|
$
|
9,591.6
|
|
|
$
|
9,260.4
|
|
End of period common shares outstanding (in millions)
|
|
|
294.7
|
|
|
|
293.9
|
|
|
|
293.8
|
|
Book value per common share
|
|
$
|
32.89
|
|
|
$
|
32.81
|
|
|
$
|
33.56
|
|
Book value per common share excluding accumulated other
comprehensive income
|
|
$
|
34.00
|
|
|
$
|
32.64
|
|
|
$
|
31.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
06/30/15
|
|
06/30/14
|
|
06/30/15
|
|
06/30/14
|
Diluted Earnings Per Common Share:
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
$
|
1.09
|
|
|
$
|
1.08
|
|
|
$
|
2.18
|
|
|
$
|
2.14
|
|
Net realized capital gains (losses)
|
|
|
(0.28
|
)
|
|
|
0.10
|
|
|
|
(0.23
|
)
|
|
|
0.03
|
|
Other after-tax adjustments
|
|
|
-
|
|
|
|
(0.15
|
)
|
|
|
0.25
|
|
|
|
(0.16
|
)
|
Adjustment for redeemable noncontrolling interest
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.03
|
)
|
Net income
|
|
$
|
0.81
|
|
|
$
|
1.03
|
|
|
$
|
2.20
|
|
|
$
|
1.98
|
|
|
|
|
|
|
|
|
|
|
Book Value Per Common Share Excluding Accumulated Other
Comprehensive Income:
|
|
|
|
|
|
|
|
|
Book value per common share excluding accumulated other
comprehensive income
|
|
$
|
34.00
|
|
|
$
|
31.52
|
|
|
$
|
34.00
|
|
|
$
|
31.52
|
|
Net unrealized capital gains
|
|
|
3.14
|
|
|
|
3.82
|
|
|
|
3.14
|
|
|
|
3.82
|
|
Foreign currency translation
|
|
|
(2.94
|
)
|
|
|
(1.27
|
)
|
|
|
(2.94
|
)
|
|
|
(1.27
|
)
|
Net unrecognized postretirement benefit obligations
|
|
|
(1.31
|
)
|
|
|
(0.51
|
)
|
|
|
(1.31
|
)
|
|
|
(0.51
|
)
|
Book value per common share including accumulated other
comprehensive income
|
|
$
|
32.89
|
|
|
$
|
33.56
|
|
|
$
|
32.89
|
|
|
$
|
33.56
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
RIS
|
|
$
|
2,108.6
|
|
|
$
|
1,265.1
|
|
|
$
|
3,428.0
|
|
|
$
|
2,526.3
|
|
PGI
|
|
|
188.4
|
|
|
|
173.2
|
|
|
|
375.0
|
|
|
|
344.3
|
|
PI
|
|
|
315.0
|
|
|
|
357.3
|
|
|
|
551.2
|
|
|
|
657.7
|
|
USIS
|
|
|
857.8
|
|
|
|
811.4
|
|
|
|
1,719.5
|
|
|
|
1,615.8
|
|
Corporate
|
|
|
(63.0
|
)
|
|
|
(64.4
|
)
|
|
|
(122.3
|
)
|
|
|
(102.2
|
)
|
Total operating revenues
|
|
|
3,406.8
|
|
|
|
2,542.6
|
|
|
|
5,951.4
|
|
|
|
5,041.9
|
|
Net realized capital gains (losses) and related adjustments
|
|
|
(141.3
|
)
|
|
|
64.3
|
|
|
|
(95.7
|
)
|
|
|
43.2
|
|
Other income on a tax indemnification
|
|
|
(6.7
|
)
|
|
|
-
|
|
|
|
60.2
|
|
|
|
-
|
|
Exited group medical insurance business
|
|
|
0.4
|
|
|
|
(0.2
|
)
|
|
|
0.6
|
|
|
|
0.2
|
|
Total GAAP revenues
|
|
$
|
3,259.2
|
|
|
$
|
2,606.7
|
|
|
$
|
5,916.5
|
|
|
$
|
5,085.3
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings:
|
|
|
|
|
|
|
|
|
RIS
|
|
$
|
216.7
|
|
|
$
|
212.1
|
|
|
$
|
427.6
|
|
|
$
|
428.6
|
|
PGI
|
|
|
31.5
|
|
|
|
27.4
|
|
|
|
62.2
|
|
|
|
54.3
|
|
PI
|
|
|
59.3
|
|
|
|
68.0
|
|
|
|
119.2
|
|
|
|
131.3
|
|
USIS
|
|
|
58.8
|
|
|
|
49.0
|
|
|
|
113.9
|
|
|
|
92.4
|
|
Corporate
|
|
|
(42.4
|
)
|
|
|
(33.4
|
)
|
|
|
(72.6
|
)
|
|
|
(66.4
|
)
|
Total operating earnings
|
|
|
323.9
|
|
|
|
323.1
|
|
|
|
650.3
|
|
|
|
640.2
|
|
Net realized capital gains (losses) and related adjustments
|
|
|
(82.8
|
)
|
|
|
30.8
|
|
|
|
(69.7
|
)
|
|
|
7.9
|
|
Other after-tax adjustments
|
|
|
-
|
|
|
|
(47.6
|
)
|
|
|
74.7
|
|
|
|
(48.1
|
)
|
Net income available to common stockholders
|
|
$
|
241.1
|
|
|
$
|
306.3
|
|
|
$
|
655.3
|
|
|
$
|
600.0
|
|
|
|
|
|
|
|
|
|
|
Net Realized Capital Gains (Losses):
|
|
|
|
|
|
|
|
|
Net realized capital gains (losses), as adjusted
|
|
$
|
(82.8
|
)
|
|
$
|
30.8
|
|
|
$
|
(69.7
|
)
|
|
$
|
7.9
|
|
Certain derivative and hedging-related adjustments
|
|
|
26.4
|
|
|
|
22.7
|
|
|
|
46.1
|
|
|
|
44.5
|
|
Amortization of DAC and other actuarial balances
|
|
|
(16.2
|
)
|
|
|
13.5
|
|
|
|
(0.2
|
)
|
|
|
23.2
|
|
Certain market value adjustments of embedded derivatives
|
|
|
-
|
|
|
|
0.1
|
|
|
|
0.9
|
|
|
|
(0.3
|
)
|
Capital gains (losses) distributed
|
|
|
2.9
|
|
|
|
6.2
|
|
|
|
(1.9
|
)
|
|
|
9.3
|
|
Tax impacts
|
|
|
(44.4
|
)
|
|
|
13.6
|
|
|
|
(26.8
|
)
|
|
|
3.0
|
|
Noncontrolling interest capital gains (losses)
|
|
|
(0.8
|
)
|
|
|
0.1
|
|
|
|
2.0
|
|
|
|
0.1
|
|
Recognition of front-end fee revenues
|
|
|
0.3
|
|
|
|
(0.2
|
)
|
|
|
0.1
|
|
|
|
(0.3
|
)
|
Certain market value adjustments to fee revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
1.1
|
|
|
|
-
|
|
GAAP net realized capital gains (losses)
|
|
$
|
(114.6
|
)
|
|
$
|
86.8
|
|
|
$
|
(48.4
|
)
|
|
$
|
87.4
|
|
|
|
|
|
|
|
|
|
|
Other After-Tax Adjustments:
|
|
|
|
|
|
|
|
|
Losses associated with exited group medical insurance business
|
|
$
|
-
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(0.6
|
)
|
Impact of a court ruling on some uncertain tax positions
|
|
|
-
|
|
|
|
(47.5
|
)
|
|
|
(30.3
|
)
|
|
|
(47.5
|
)
|
Deferred tax impact of Chile merger
|
|
|
-
|
|
|
|
-
|
|
|
|
105.2
|
|
|
|
-
|
|
Total other after-tax adjustments
|
|
$
|
-
|
|
|
$
|
(47.6
|
)
|
|
$
|
74.7
|
|
|
$
|
(48.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc. Principal
International Net Revenue Reconciliation (in millions)
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
Six Months Ended,
|
|
|
06/30/15
|
|
06/30/14
|
|
06/30/15
|
|
06/30/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total combined net revenue
|
|
$
|
380.3
|
|
|
$
|
390.8
|
|
|
$
|
757.9
|
|
|
$
|
749.2
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal International's share of unconsolidated joint ventures'
net income
|
|
|
24.5
|
|
|
|
24.8
|
|
|
|
50.7
|
|
|
|
45.9
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated joint ventures' net revenue at 100%
|
|
|
255.0
|
|
|
|
250.7
|
|
|
|
506.5
|
|
|
|
473.0
|
|
Other adjustments
|
|
|
1.2
|
|
|
|
1.2
|
|
|
|
2.6
|
|
|
|
2.5
|
|
Net revenue*
|
|
$
|
148.6
|
|
|
$
|
163.7
|
|
|
$
|
299.5
|
|
|
$
|
319.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 Fee Income = Fees and other revenue as
reported in our results of operations. 4 RIS
Accumulation: includes Full Service Accumulation, Principal Funds,
Individual Annuities and Bank and Trust Services. 5 RIS
Guaranteed: includes Investment Only and Full Service Payout. 6
Combined basis: all Principal International companies (including
joint ventures) at 100%. 7 Adjusted to expected encaje
returns and inflation. 8 "The Principal Financial Group"
and "The Principal" are registered service marks of Principal Financial
Services, Inc., a member of the Principal Financial Group. 9
As of June 30, 2015.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150723006438/en/
[ Back To TMCnet.com's Homepage ]
|