[July 27, 2017] |
|
Principal® Announces Second Quarter 2017 Results
Principal Financial Group® (NYSE: PFG) today announced
results for second quarter 2017.
-
Net income attributable to PFG for second quarter 2017 of
$309.5 million, compared to $322.3 million for second quarter
2016. Net income per diluted share of $1.06 for second quarter 2017
was down 4 percent compared to $1.10 in prior year quarter.
-
Operating earnings increased 14 percent to a record $383.6 million
for second quarter 2017, compared to $337.1 million for second
quarter 2016. Record operating earnings per diluted share (EPS) of
$1.31 for second quarter 2017 was up 14 percent compared to $1.15 for
second quarter 2016.
-
Quarterly common stock dividend of $0.47 per share for third
quarter 2017 was authorized by the company's Board of Directors,
bringing the trailing twelve month dividend to $1.81 per share, a 16
percent increase compared to the prior year trailing twelve month
period. The dividend will be payable on Sept. 29, 2017, to
shareholders of record as of Sept. 1, 2017.
"I'm pleased with our results for the quarter and first six months of
the year," said Dan Houston, chairman, president and CEO. "We delivered
a record $384 million of operating earnings in the second quarter. At
$754 million year-to-date, operating earnings are up 21 percent compared
to the first half of 2016, reflecting underlying growth across our fee,
spread and risk businesses."
"Compared to a year ago, we've increased AUM by 10 percent to a record
$629 billion as of mid-year. I'm particularly pleased with the trailing
twelve month trends across our businesses for revenue, margins and
operating earnings," added Houston. "We've now increased our quarterly
common stock dividend for the sixth quarter in a row, approaching our
targeted dividend payout ratio of 40 percent as we continue to deploy
capital to create long-term value for our shareholders."
Other second quarter highlights
-
Strong Morningstar investment performance, with 81 percent of
Principal's investment options2 above median on a
three-year basis and 85 percent above median on a five-year basis.
-
Retirement and Income Solutions (RIS) sales of $4.3 billion, $2.8
billion in RIS-Fee and $1.5 billion in RIS-Spread, which helped drive
end of period account values to $249.3 billion.
-
Principal Global Investors (PGI) ended the quarter with record AUM of
$410.4 billion. Pre-tax return on operating revenues less pass-through
commissions3 increased to 37.0 percent on a trailing twelve
month basis, a 280 basis point increase from the year ago quarter.
-
Principal International (PI) generated net cash flows of $400 million
and achieved record AUM of $147.7 billion, a 15 percent increase over
the year ago quarter on a constant currency basis4.
-
Specialty Benefits premium and fees5 increased 8 percent
compared to the year ago quarter, driven by strong sales and
retention. In addition, the loss ratios continue to perform within the
expected range.
-
Individual Life Insurance premium and fees increased 8 percent over
the year ago quarter driven by strong sales.
-
Continued strong capital position with a 2017 capital deployment
target of $800 million to $1.1 billion. Deployed $165.9 million of
capital in second quarter 2017, including:
-
$132.7 million of common stock dividends with the $0.46 per share
dividend paid in the second quarter; and
-
$26.4 million to repurchase 0.4 million shares of common stock; and
-
$6.8 million of increased ownership in a PGI boutique.
Segment Results
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Retirement and Income Solutions - Fee
|
|
|
|
|
|
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
Pre-tax operating earnings6
|
|
|
$147.5
|
|
|
$124.5
|
|
|
18%
|
|
|
$547.1
|
|
|
$446.8
|
|
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22%
|
Net revenue7
|
|
|
$406.1
|
|
|
$381.5
|
|
|
6%
|
|
|
$1,575.5
|
|
|
$1,526.3
|
|
|
3%
|
Pre-tax return on net revenue8
|
|
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36.3%
|
|
|
32.6%
|
|
|
|
|
|
34.7%
|
|
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29.3%
|
|
|
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Pre-tax operating earnings increased $23.0 million driven by an
increase in net revenue and disciplined expense management.
-
Net revenue increased $24.6 million primarily due to higher
fees driven by increased account values and higher variable investment
income9.
|
Retirement and Income Solutions - Spread
|
|
|
|
|
|
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(in millions except percentages or otherwise noted)
|
|
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Quarter
|
|
|
Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
% Change
|
Pre-tax operating earnings
|
|
|
$96.3
|
|
|
$70.2
|
|
|
37%
|
|
|
$359.3
|
|
|
$249.6
|
|
44%
|
Net revenue
|
|
|
$145.1
|
|
|
$121.7
|
|
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19%
|
|
|
$544.1
|
|
|
$442.0
|
|
23%
|
Pre-tax return on net revenue
|
|
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66.4%
|
|
|
57.7%
|
|
|
|
|
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66.0%
|
|
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56.5%
|
|
|
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|
|
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-
Pre-tax operating earnings increased $26.1 million due to an
increase in net revenue and disciplined expense management.
-
Net revenue increased $23.4 million as a result of strong
growth in the business, higher variable investment income, as well as
mortality and experience gains.
|
Principal Global Investors
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
Pre-tax operating earnings
|
|
|
$
|
115.4
|
|
|
|
$
|
117.5
|
|
|
|
(2
|
)%
|
|
|
$
|
462.0
|
|
|
|
$
|
394.6
|
|
|
17
|
%
|
Operating revenues less pass-through commissions
|
|
|
$
|
315.7
|
|
|
|
$
|
310.7
|
|
|
|
2
|
%
|
|
|
$
|
1,265.7
|
|
|
|
$
|
1,166.8
|
|
|
8
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%
|
Pre-tax return on operating revenues less pass-through commissions10
|
|
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37.1
|
%
|
|
|
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38.2
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%
|
|
|
|
|
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37.0
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%
|
|
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34.2
|
%
|
Total PGI assets under management (billions)
|
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$
|
410.4
|
|
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$
|
382.8
|
|
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|
7
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%
|
|
|
|
|
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Institutional assets under management (billions)
|
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$
|
132.4
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|
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$
|
129.6
|
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2
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%
|
|
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|
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-
Pre-tax operating earnings decreased $2.1 million primarily due
to lower performance fees compared to the year ago quarter.
-
Operating revenues less pass-through commissions increased $5.0
million primarily due to growth in management fees on record AUM,
partially offset by lower performance fees relative to the year ago
quarter.
|
Principal International
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(in millions except percentages or otherwise noted)
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|
|
Quarter
|
|
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Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
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% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
Pre-tax operating earnings
|
|
|
$78.4
|
|
|
$69.9
|
|
|
12%
|
|
|
$329.5
|
|
|
$256.2
|
|
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29%
|
Combined11 net revenue (at PFG share)
|
|
|
$220.2
|
|
|
$193.6
|
|
|
14%
|
|
|
$861.3
|
|
|
$761.1
|
|
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13%
|
Combined pre-tax return on net revenue (at PFG share)
|
|
|
35.6%
|
|
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36.1%
|
|
|
|
|
|
38.3%
|
|
|
33.7%
|
|
|
|
Assets under management (billions)
|
|
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$147.7
|
|
|
$130.9
|
|
|
13%
|
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|
-
Pre-tax operating earnings increased $8.5 million despite
elevated expenses in Mexico.
-
Combined net revenue (at PFG share) increased $26.6 million
driven by growth in AUM.
|
Specialty Benefits Insurance
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
Pre-tax operating earnings
|
|
|
$63.6
|
|
|
$66.5
|
|
|
(4)%
|
|
|
$254.9
|
|
|
$227.3
|
|
|
12%
|
Premium and fees
|
|
|
$499.2
|
|
|
$464.2
|
|
|
8%
|
|
|
$1,935.2
|
|
|
$1,782.7
|
|
|
9%
|
Pre-tax return on premium and fees12
|
|
|
12.7%
|
|
|
14.3%
|
|
|
|
|
|
13.2%
|
|
|
12.8%
|
|
|
|
Incurred loss ratio
|
|
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63.7%
|
|
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61.7%
|
|
|
|
|
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64.1%
|
|
|
62.5%
|
|
|
|
|
|
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|
-
Pre-tax operating earnings decreased $2.9 million primarily due
to a return to more normal claims experience compared to very
favorable claims experience in the year ago quarter.
-
Premium and fees increased $35.0 million reflecting strong
sales and retention.
-
Incurred loss ratio was within our expected range.
|
Individual Life Insurance
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
Pre-tax operating earnings
|
|
|
$40.8
|
|
|
$37.1
|
|
|
10%
|
|
|
$112.8
|
|
|
$216.3
|
|
|
(48)%
|
Premium and fees
|
|
|
$270.2
|
|
|
$250.9
|
|
|
8%
|
|
|
$1,030.2
|
|
|
$984.4
|
|
|
5%
|
Pre-tax return on premium and fees
|
|
|
15.1%
|
|
|
14.8%
|
|
|
|
|
|
10.9%
|
|
|
22.0%
|
|
|
|
|
|
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-
Pre-tax operating earnings increased $3.7 million primarily due
to growth in the business, partially offset by higher claims
experience.
-
Premium and fees increased $19.3 million reflecting strong
sales growth.
|
Corporate
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
|
|
2Q17
|
|
|
2Q16
|
|
|
% Change
|
Pre-tax operating losses
|
|
|
$(47.5)
|
|
|
$(54.5)
|
|
|
13%
|
|
|
$(217.1)
|
|
|
$(216.6)
|
|
|
0%
|
|
|
|
|
|
|
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|
|
|
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|
-
Pre-tax operating losses decreased $7.0 million primarily due
to lower corporate expenses.
Forward looking and cautionary 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, 2016, and in the company's
quarterly report on Form 10-Q for the quarter ended March 31, 2017,
filed by the company with the U.S. 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; volatility or declines in the equity, bond or real estate
markets; changes in interest rates or credit spreads or a sustained low
interest rate environment; 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
investments and the determination of the amount of allowances and
impairments taken on such investments may include methodologies,
estimations and assumptions that are subject to differing
interpretations; any impairments of or valuation allowances against the
company's deferred tax assets; the company's actual experience could
differ significantly from its pricing and reserving assumptions; 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 not be able to protect its intellectual property and may be
subject to infringement claims; 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; changes in laws, regulations or accounting standards; 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; 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; 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; changes in investor preferences; inability
to attract and retain qualified employees and sales representatives and
develop new distribution sources; international business risks;
fluctuations in foreign currency exchange rates; 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; and a computer system failure or security breach could
disrupt the company's business and damage its reputation.
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, Jul. 28, 2017, at 10:00
a.m. (ET), Chairman, President and Chief Executive Officer Dan Houston
and Executive Vice President and Chief Financial Officer Deanna Strable
will lead a discussion of results and the impacts on future prospects,
asset quality and capital adequacy during a live conference call, which
can be accessed as follows:
-
Via live Internet webcast. Please go to 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 48354928.
-
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 48354928. This replay will
be available approximately two hours after the completion of the live
earnings call through the end of day Aug. 4, 2017.
-
Replay of the earnings call via webcast as well as a transcript of the
call will be available after the call at principal.com/investor.
The company's financial supplement is currently available at principal.com/investor,
and may be referred to during the call. Other slides that will be
referenced during the call will be available at principal.com/investor
approximately one-half hour prior to call start time.
About
Principal®13 Principal helps people and
companies around the world build, protect and advance their financial
well-being through retirement, insurance and asset management solutions
that fit their lives. Our employees are passionate about helping clients
of all income and portfolio sizes achieve their goals - offering
innovative ideas, investment expertise and real-life solutions to make
financial progress possible. To find out more, visit us at principal.com.
|
Summary of Principal Financial Group, Inc. and Segment
Results
|
|
|
|
|
Principal Financial Group, Inc. Results:
|
|
|
(in millions)
|
|
|
Three Months Ended,
|
|
|
Trailing Twelve Months,
|
|
|
6/30/17
|
|
|
6/30/16
|
|
|
6/30/17
|
|
|
6/30/16
|
Net income attributable to PFG
|
|
|
$
|
309.5
|
|
|
$
|
322.3
|
|
|
$
|
1,284.6
|
|
|
$
|
1,244.3
|
Net realized capital (gains) losses, as adjusted
|
|
|
|
74.1
|
|
|
|
14.8
|
|
|
|
125.2
|
|
|
|
(2.8)
|
Other after-tax adjustments
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
52.0
|
|
|
|
2.1
|
Operating Earnings*
|
|
|
$
|
383.6
|
|
|
$
|
337.1
|
|
|
$
|
1,461.8
|
|
|
$
|
1,243.6
|
Income taxes
|
|
|
|
110.9
|
|
|
|
94.1
|
|
|
|
386.7
|
|
|
|
330.6
|
Pre-Tax Operating Earnings
|
|
|
$
|
494.5
|
|
|
$
|
431.2
|
|
|
$
|
1,848.5
|
|
|
$
|
1,574.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Pre-Tax Operating Earnings (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement and Income Solutions
|
|
|
$
|
243.8
|
|
|
$
|
194.7
|
|
|
$
|
906.4
|
|
|
$
|
696.4
|
Principal Global Investors
|
|
|
|
115.4
|
|
|
|
117.5
|
|
|
|
462.0
|
|
|
|
394.6
|
Principal International
|
|
|
|
78.4
|
|
|
|
69.9
|
|
|
|
329.5
|
|
|
|
256.2
|
U.S. Insurance Solutions
|
|
|
|
104.4
|
|
|
|
103.6
|
|
|
|
367.7
|
|
|
|
443.6
|
Corporate
|
|
|
|
(47.5)
|
|
|
|
(54.5)
|
|
|
|
(217.1)
|
|
|
|
(216.6)
|
Pre-Tax Operating Earnings
|
|
|
$
|
494.5
|
|
|
$
|
431.2
|
|
|
$
|
1,848.5
|
|
|
$
|
1,574.2
|
|
|
|
|
|
|
|
|
|
|
|
Per Diluted Share
|
|
|
Three Months Ended,
|
|
|
Six Months Ended,
|
|
|
6/30/17
|
|
|
6/30/16
|
|
|
6/30/17
|
|
|
6/30/16
|
Net income
|
|
|
$
|
1.06
|
|
|
$
|
1.10
|
|
|
$
|
2.25
|
|
|
$
|
2.35
|
Net realized capital (gains) losses, as adjusted
|
|
|
|
0.25
|
|
|
|
0.05
|
|
|
|
0.33
|
|
|
|
(0.23)
|
Operating Earnings
|
|
|
$
|
1.31
|
|
|
$
|
1.15
|
|
|
$
|
2.58
|
|
|
$
|
2.12
|
Weighted-average diluted common shares outstanding (in
millions)
|
|
|
|
292.7
|
|
|
|
292.6
|
|
|
|
292.5
|
|
|
|
293.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*U.S. GAAP (GAAP) net income attributable to PFG versus operating
earnings
Management uses operating earnings, which is a non-GAAP financial
measure that excludes the effect of net realized capital gains and
losses, as adjusted, and other after-tax adjustments the company
believes are not indicative of overall operating trends, 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. 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 operating earnings
enhances the understanding of results of operations by highlighting
earnings attributable to the normal, ongoing operations of the company's
businesses.
|
Selected Balance Sheet Statistics
|
|
|
|
|
|
|
|
Period Ended,
|
|
|
6/30/17
|
|
|
12/31/16
|
Total assets (in billions)
|
|
|
$
|
240.2
|
|
|
$
|
228.0
|
Stockholders' equity (in millions)
|
|
|
$
|
11,238.0
|
|
|
$
|
10,293.8
|
Total common equity (in millions)
|
|
|
$
|
11,168.1
|
|
|
$
|
10,227.3
|
Total common equity excluding accumulated other comprehensive income
(AOCI) other than foreign currency translation adjustment (in
millions)
|
|
|
$
|
10,252.4
|
|
|
$
|
9,808.7
|
End of period common shares outstanding (in millions)
|
|
|
|
288.6
|
|
|
|
287.7
|
Book value per common share
|
|
|
$
|
38.70
|
|
|
$
|
35.55
|
Book value per common share excluding AOCI other than foreign
currency translation adjustment
|
|
|
$
|
35.52
|
|
|
$
|
34.09
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
(in millions, except as indicated)
|
|
|
|
|
|
|
|
Period Ended,
|
|
|
|
6/30/17
|
|
|
12/31/16
|
Stockholders' Equity, Excluding AOCI Other Than Foreign Currency
Translation Adjustment, Available to Common Stockholders:
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
$
|
11,238.0
|
|
|
$
|
10,293.8
|
Noncontrolling interest
|
|
|
|
(69.9)
|
|
|
|
(66.5)
|
Stockholders' equity available to common stockholders
|
|
|
|
11,168.1
|
|
|
|
10,227.3
|
Net unrealized capital (gains) losses
|
|
|
|
(1,315.5)
|
|
|
|
(827.0)
|
Net unrecognized postretirement benefit obligation
|
|
|
|
399.8
|
|
|
|
408.4
|
Stockholders' equity, excluding AOCI other than foreign currency
translation adjustment, available to common stockholders
|
|
|
$
|
10,252.4
|
|
|
$
|
9,808.7
|
|
|
|
|
|
|
|
Book Value Per Common Share, Excluding AOCI Other Than Foreign
Currency Translation Adjustment:
|
|
|
|
|
|
|
Book value per common share
|
|
|
$
|
38.70
|
|
|
$
|
35.55
|
Net unrealized capital (gains) losses
|
|
|
|
(4.57)
|
|
|
|
(2.88)
|
Net unrecognized postretirement benefit obligation
|
|
|
|
1.39
|
|
|
|
1.42
|
Book value per common share, excluding AOCI other than foreign
currency translation adjustment
|
|
|
$
|
35.52
|
|
|
$
|
34.09
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
Trailing Twelve Months,
|
|
|
|
6/30/17
|
|
|
6/30/16
|
|
|
6/30/17
|
|
|
6/30/16
|
Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP income taxes
|
|
|
$
|
50.8
|
|
|
$
|
72.9
|
|
|
$
|
197.6
|
|
|
$
|
262.5
|
Net realized capital gains (losses) tax adjustments
|
|
|
|
39.6
|
|
|
|
4.3
|
|
|
|
76.1
|
|
|
|
8.3
|
Tax benefit related to other after-tax adjustments
|
|
|
|
-
|
|
|
|
-
|
|
|
|
34.4
|
|
|
|
1.1
|
Income taxes related to equity method investments and noncontrolling
interest
|
|
|
|
20.5
|
|
|
|
16.9
|
|
|
|
78.6
|
|
|
|
58.7
|
Income taxes
|
|
|
$
|
110.9
|
|
|
$
|
94.1
|
|
|
$
|
386.7
|
|
|
$
|
330.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized Capital Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net realized capital gains (losses)
|
|
|
$
|
(95.9)
|
|
|
$
|
33.7
|
|
|
$
|
(111.7)
|
|
|
$
|
167.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognition of front-end fee revenues
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.3)
|
|
|
|
0.3
|
Market value adjustments to fee revenues
|
|
|
|
-
|
|
|
|
(1.6)
|
|
|
|
(0.2)
|
|
|
|
(2.3)
|
Net realized capital gains (losses) related to equity method
investments
|
|
|
|
0.5
|
|
|
|
(0.5)
|
|
|
|
1.4
|
|
|
|
(0.2)
|
Derivative and hedging-related adjustments
|
|
|
|
(16.9)
|
|
|
|
(26.0)
|
|
|
|
(78.3)
|
|
|
|
(115.9)
|
Sponsored investment fund adjustments
|
|
|
|
1.7
|
|
|
|
1.9
|
|
|
|
5.7
|
|
|
|
4.6
|
Amortization of deferred acquisition costs
|
|
|
|
8.4
|
|
|
|
(5.7)
|
|
|
|
(5.8)
|
|
|
|
(56.9)
|
Capital gains distributed - operating expenses
|
|
|
|
(8.0)
|
|
|
|
(15.0)
|
|
|
|
(21.9)
|
|
|
|
19.3
|
Amortization of other actuarial balances
|
|
|
|
0.6
|
|
|
|
(1.5)
|
|
|
|
-
|
|
|
|
(10.8)
|
Market value adjustments of embedded derivatives
|
|
|
|
1.3
|
|
|
|
0.8
|
|
|
|
49.9
|
|
|
|
3.9
|
Capital gains distributed - cost of interest credited
|
|
|
|
(3.0)
|
|
|
|
(2.1)
|
|
|
|
(23.4)
|
|
|
|
(5.0)
|
Net realized capital gains (losses) tax adjustments
|
|
|
|
39.6
|
|
|
|
4.3
|
|
|
|
76.1
|
|
|
|
8.3
|
Net realized capital gains (losses) attributable to noncontrolling
interest, after-tax
|
|
|
|
(2.4)
|
|
|
|
(3.1)
|
|
|
|
(16.7)
|
|
|
|
(10.2)
|
Net realized capital losses associated with exited group medical
insurance business, after-tax
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.1
|
Total net realized capital gains (losses) after-tax adjustments
|
|
|
|
21.8
|
|
|
|
(48.5)
|
|
|
|
(13.5)
|
|
|
|
(164.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized capital gains (losses), as adjusted
|
|
|
$
|
(74.1)
|
|
|
$
|
(14.8)
|
|
|
$
|
(125.2)
|
|
|
$
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other After-Tax Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Exited group medical insurance business:
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(3.2)
|
Tax
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.1
|
Early extinguishment of debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(86.4)
|
|
|
|
-
|
Tax
|
|
|
|
-
|
|
|
|
-
|
|
|
|
34.4
|
|
|
|
-
|
Total other after-tax adjustments
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(52.0)
|
|
|
$
|
(2.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
Trailing Twelve Months,
|
|
|
|
6/30/17
|
|
|
6/30/16
|
|
|
6/30/17
|
|
|
6/30/16
|
Principal Global Investors Operating Revenues Less Pass-Through
Commissions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
355.5
|
|
|
$
|
351.3
|
|
|
$
|
1,427.7
|
|
|
$
|
1,337.6
|
Commission expense
|
|
|
|
(39.8)
|
|
|
|
(40.6)
|
|
|
|
(162.0)
|
|
|
|
(170.8)
|
Operating revenues less pass-through commissions
|
|
|
$
|
315.7
|
|
|
$
|
310.7
|
|
|
$
|
1,265.7
|
|
|
$
|
1,166.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal International Combined Net Revenue (at PFG Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax operating earnings
|
|
|
$
|
78.4
|
|
|
$
|
69.9
|
|
|
$
|
329.5
|
|
|
$
|
256.2
|
Combined operating expenses (at PFG share)
|
|
|
|
141.8
|
|
|
|
123.7
|
|
|
|
531.8
|
|
|
|
504.9
|
Combined net revenue (at PFG share)
|
|
|
$
|
220.2
|
|
|
$
|
193.6
|
|
|
$
|
861.3
|
|
|
$
|
761.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Use of non-GAAP financial measures is discussed in this
release after segment results. Operating earnings for total company is
after tax.
2 Principal "I" shares (if no "I" share class then "A" share
class, if no "A" then we will use the lowest share class available),
Principal Variable Contracts Funds (PVC), Exchange Traded Funds (ETF),
International Small Cap Sep Account & Target Date Collective Investment
Trust (CIT) accounts. Excludes Money Market, Stable Value, Liability
Driven Investment (LDI) (Short, Intermediate and Extended) Duration, &
US Property.
3 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 has determined this measure is more
representative of underlying operating revenues growth for PGI as it
removes commissions that are collected through fee revenue and passed
through expenses with no impact to pre-tax operating earnings.
4 Constant currency basis = prior period results translated
using foreign exchange rates from the current period.
5 Premium and fees = premiums and other considerations plus
fees and other revenues.
6 Pre-tax operating earnings = operating earnings before
income taxes and after noncontrolling interest.
7 Net revenue = operating revenues less benefits, claims and
settlement expenses less dividends to policyholders.
8 Pre-tax return on net revenue = pre-tax operating earnings
divided by net revenue.
9 Variable investment income includes certain types of
investment returns such as prepayment fees and income (loss) from
certain elements of our alternative asset classes, including results of
value-add real estate sales activity.
10 Pre-tax return on operating revenues less pass-through
commissions = pre-tax operating earnings, adjusted for noncontrolling
interest divided by operating revenues less pass-through commissions.
11 Combined basis = all Principal International companies at
100 percent. 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 has determined combined net revenue (at PFG
share) is more representative of underlying net revenue growth for
Principal International as it reflects our proportionate share of
consolidated and equity method subsidiaries. In addition, using this net
revenue metric provides a more meaningful representation of our profit
margins.
12 Pre-tax return on premium and fees = pre-tax operating
earnings divided by premium and fees.
13 Principal, Principal and symbol design and Principal
Financial Group are trademarks and service marks of Principal Financial
Services, Inc., a member of the Principal Financial Group.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170727006267/en/
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