[October 26, 2017] |
|
Principal® Announces Third Quarter 2017 Results
Principal Financial Group® (NYSE: PFG) today announced
results for third quarter 2017.
-
Net income attributable to PFG for third quarter 2017 of
$810.2 million, compared to $308.2 million for third quarter 2016.
Net income per diluted share of $2.76 for third quarter 2017 compared
to $1.06 in prior year quarter. Net income benefited $410.8 million
from a real estate exchange with one of our joint venture partners.
-
Operating earnings increased 11 percent to $373.7 million for third
quarter 2017, compared to $335.7 million for third quarter 2016.
Operating earnings per diluted share (EPS) of $1.28 for third quarter
2017 was up 11 percent compared to $1.15 for third quarter 2016.
-
As noted in Exhibit 1, third quarter 2017 operating earnings
reflected the results of the annual actuarial assumption review,
which decreased operating earnings by $42.9 million, or $0.14 per
diluted share. After excluding the significant variances noted in
Exhibit 1, operating earnings increased 17 percent over the
prior year quarter.
-
Quarterly common stock dividend of $0.49 per share for fourth
quarter 2017 was authorized by the company's Board of Directors,
bringing the trailing twelve-month dividend to $1.87 per share, a 16
percent increase compared to the prior year trailing twelve-month
period. The dividend will be payable on Dec. 28, 2017, to shareholders
of record as of Dec. 4, 2017.
"I'm very pleased with our results for the quarter and through nine
months. We continue to deliver above market growth in operating earnings
across our businesses, solid net cash flow and strong investment
performance," said Dan Houston, chairman, president and CEO. "In
addition, today we announced our seventh consecutive quarterly dividend
increase further demonstrating our strong capital position. We remain
well positioned to advance our long-term, customer-focused strategy, to
capitalize on key growth opportunities around the world, and to continue
to create long-term value for our shareholders."
Other third quarter highlights
-
Strong Morningstar investment performance2, with 69 percent
of Principal's investment options above median on a
one-year basis, 71 percent on a three-year basis and 88 percent on a
five-year basis.
-
Retirement and Income Solutions (RIS) sales of $4.2 billion, $2.3
billion in RIS-Fee and $1.9 billion in RIS-Spread, helped drive end of
period account values to $257.9 billion.
-
Principal Global Investors (PGI) ended the quarter with record AUM of
$423.3 billion, including positive net cash flows of $2.5 billion.
Pre-tax return on operating revenues less pass-through commissions3
increased to 37.7 percent on a trailing twelve-month basis, a 260
basis point increase from the year ago quarter.
-
Principal International (PI) generated net cash flows of $2.1 billion
and achieved record AUM of $158.6 billion, a 14 percent increase over
the year ago quarter on a constant currency basis4.
-
Specialty Benefits premium and fees5 increased 9 percent
compared to the year ago quarter, driven by strong sales and retention.
-
Individual Life sales of $43.7 million increased 19 percent over the
year ago quarter.
-
Continued strong capital position with a 2017 capital deployment
target of $800 million to $1.1 billion. Deployed $190.5 million of
capital in third quarter 2017, including:
-
$135.8 million of common stock dividends with the $0.47 per share
dividend paid in the third quarter;
-
$48.6 million to repurchase 0.8 million shares of common stock; and
-
$6.1 million of increased ownership in a PGI boutique.
Segment Results
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Retirement and Income Solutions - Fee
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(in millions except percentages or otherwise noted)
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Quarter
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Trailing Twelve Months
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3Q17
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3Q16
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% Change
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3Q17
|
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3Q16
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% Change
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Pre-tax operating earnings6
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$108.0
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$130.9
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(17)%
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$524.2
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$494.1
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6%
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Net revenue7
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$372.1
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$364.8
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2%
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$1,582.8
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$1,499.6
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6%
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Pre-tax return on net revenue8
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29.0%
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35.9%
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33.1%*
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32.9%*
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*Pre-tax return on net revenue - Excluding the third quarter
actuarial assumption reviews, the trailing twelve-month pre-tax return
on net revenue was 34.9 percent for third quarter 2017 and 33.8 percent
for third quarter 2016.
-
Pre-tax operating earnings decreased $22.9 million driven
primarily by the third quarter actuarial assumption reviews. Excluding
the significant variances outlined in Exhibit 1, pre-tax operating
earnings were up 3 percent over the year ago quarter.
-
Net revenue increased $7.3 million primarily due to higher fees
driven by increased account values partially offset by higher variable
investment income in the year ago quarter.
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Retirement and Income Solutions - Spread
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(in millions except percentages or otherwise noted)
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Quarter
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Trailing Twelve Months
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3Q17
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3Q16
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% Change
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3Q17
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3Q16
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% Change
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Pre-tax operating earnings
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$102.1
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$76.0
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34%
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$385.4
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$275.7
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40%
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Net revenue
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$131.0
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$122.0
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7%
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$553.1
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$466.8
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18%
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Pre-tax return on net revenue
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77.9%
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62.3%
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69.7%*
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59.1%*
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*Pre-tax return on net revenue - Excluding the third quarter
actuarial assumption reviews, the trailing twelve-month pre-tax return
on net revenue was 66.6 percent for third quarter 2017 and 60.1 percent
for third quarter 2016.
-
Pre-tax operating earnings increased $26.1 million. Excluding
the significant variances outlined in Exhibit 1, pre-tax operating
earnings were up 25 percent due to a growth in account values.
-
Net revenue increased $9.0 million as growth in the business
was partially offset by higher variable investment income in the year
ago quarter.
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Principal Global Investors
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(in millions except percentages or otherwise noted)
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Quarter
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Trailing Twelve Months
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3Q17
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3Q16
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% Change
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3Q17
|
|
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3Q16
|
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% Change
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Pre-tax operating earnings
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$130.2
|
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$112.9
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15%
|
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$479.3
|
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$412.1
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16%
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Operating revenues less pass-through commissions
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$327.5
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$304.6
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8%
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$1,288.6
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$1,187.2
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9%
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Pre-tax return on operating revenues less pass-through commissions9
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40.2%
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37.6%
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37.7%
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35.1%
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Total PGI assets under management (billions)
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$423.3
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$397.3
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7%
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Institutional assets under management (billions)
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$136.4
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$135.2
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1%
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-
Pre-tax operating earnings increased $17.3 million primarily
due to an increase in operating revenue and disciplined expense
management.
-
Operating revenues less pass-through commissions increased
$22.9 million primarily due to growth in management fees on record AUM
and transaction and borrower fees relative to the year ago quarter.
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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
|
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|
3Q17
|
|
|
3Q16
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% Change
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3Q17
|
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3Q16
|
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% Change
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Pre-tax operating earnings
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$72.4
|
|
|
$84.2
|
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(14)%
|
|
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$317.7
|
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$289.4
|
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10%
|
Combined10 net revenue (at PFG share)
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$236.0
|
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$215.6
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9%
|
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$881.7
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$789.0
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12%
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Combined pre-tax return on net revenue (at PFG share)
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30.7%
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39.1%
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36.0%*
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36.7%*
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Assets under management (billions)
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$158.6
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$136.3
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16%
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*Combined pre-tax return on net revenue (at PFG share) -
Excluding the third quarter actuarial assumption reviews, the trailing
twelve month combined pre-tax return on net revenue (at PFG share) was
37.6 percent for third quarter 2017 and 37.5 percent for third quarter
2016.
-
Pre-tax operating earnings decreased $11.8 million. Excluding
the significant variances outlined in Exhibit 1, pre-tax operating
earnings were down 1 percent primarily driven by lower than expected
encaje performance and inflation.
-
Combined net revenue (at PFG share) increased $20.4 million
driven by growth in AUM partially offset by lower than expected encaje
performance and inflation as well as the actuarial assumption review.
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Specialty Benefits Insurance
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(in millions except percentages or otherwise noted)
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Quarter
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Trailing Twelve Months
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3Q17
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3Q16
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% Change
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3Q17
|
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3Q16
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% Change
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Pre-tax operating earnings
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$83.8
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$73.9
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13%
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$264.8
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$235.8
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12%
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Premium and fees
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$513.7
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$469.3
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9%
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$1,979.6
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$1,822.4
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9%
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Pre-tax return on premium and fees11
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16.3%
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15.7%
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13.4%*
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12.9%*
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Incurred loss ratio
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60.7%
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65.0%
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63.0%
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63.7%
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*Pre-tax return on premium and fees - Excluding the third quarter
actuarial assumption reviews, the trailing twelve-month pre-tax return
on premium and fees was 12.7 percent for third quarter 2017 and 12.4
percent for third quarter 2016.
-
Pre-tax operating earnings increased $9.9 million. Excluding
the significant variances outlined in Exhibit 1, pre-tax operating
earnings were up 24 percent primarily due to growth in the business
and favorable claims experience.
-
Premium and fees increased $44.4 million reflecting strong
sales and retention.
-
Incurred loss ratio of 63.5 percent after adjusting for the
actuarial review was within the expected range.
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Individual Life Insurance
|
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(in millions except percentages or otherwise noted)
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Quarter
|
|
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Trailing Twelve Months
|
|
3Q17
|
|
|
3Q16
|
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% Change
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|
|
3Q17
|
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3Q16
|
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% Change
|
Pre-tax operating earnings (losses)
|
|
$(0.6)
|
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$(3.7)
|
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84%
|
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$115.9
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$105.1
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10%
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Premium and fees
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$273.8
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$241.0
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14%
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$1,063.0
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$986.2
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8%
|
Pre-tax return on premium and fees
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(0.2)%
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(1.5)%
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10.9%*
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10.7%*
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*Pre-tax return on premium and fees - Excluding the third quarter
actuarial assumption reviews, the trailing twelve-month pre-tax return
on premium and fees was 15.5 percent for third quarter 2017 and 14.9
percent for third quarter 2016.
-
Pre-tax operating losses decreased $3.1 million. Excluding the
significant variances outlined in Exhibit 1, pre-tax operating
earnings were up 17 percent primarily due to expense management and
favorable claims experience.
-
Premium and fees increased $32.8 million driven by impacts from
the 2016 and 2017 actuarial assumption reviews as well as underlying
growth in the business.
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Corporate
|
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(in millions except percentages or otherwise noted)
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Quarter
|
|
|
Trailing Twelve Months
|
|
3Q17
|
|
|
3Q16
|
|
|
% Change
|
|
|
3Q17
|
|
|
3Q16
|
|
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% Change
|
Pre-tax operating losses
|
|
$(43.0)
|
|
|
$(57.8)
|
|
|
26%
|
|
|
$(202.3)
|
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|
$(220.4)
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8%
|
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Pre-tax operating losses decreased $14.8 million primarily due
to lower corporate expenses.
Exhibit 1
Principal Financial Group
|
Comparison of quarterly net income attributable to PFG and
operating earnings excluding significant variances
|
(in millions, except per share data)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
3Q17 as reported
|
|
3Q17 actuarial review
|
|
3Q17 excluding significant variances
|
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|
3Q16 as reported
|
|
3Q16 actuarial review
|
|
3Q16 value- add real estate sale
& encaje
|
|
3Q16 excluding significant variances
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to PFG
|
|
$
|
810.2
|
|
$
|
26.6
|
|
$
|
836.8
|
|
|
|
$
|
308.2
|
|
$
|
68.8
|
|
$
|
(28.4)
|
|
$
|
348.6
|
Net realized capital (gains) losses, as adjusted
|
|
|
(436.5)
|
|
|
16.3
|
|
|
(420.2)
|
|
|
|
|
27.5
|
|
|
(20.6)
|
|
|
-
|
|
|
6.9
|
Operating earnings
|
|
|
373.7
|
|
|
42.9
|
|
|
416.6
|
|
|
|
|
335.7
|
|
|
48.2
|
|
|
(28.4)
|
|
|
355.5
|
Income taxes
|
|
|
79.2
|
|
|
23.5
|
|
|
102.7
|
|
|
|
|
80.7
|
|
|
25.5
|
|
|
(14.3)
|
|
|
91.9
|
Pre-tax operating earnings
|
|
$
|
452.9
|
|
$
|
66.4
|
|
$
|
519.3
|
|
|
|
$
|
416.4
|
|
$
|
73.7
|
|
$
|
(42.7)
|
|
$
|
447.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2.76
|
|
$
|
0.09
|
|
$
|
1.45
|
|
|
|
$
|
1.06
|
|
$
|
0.24
|
|
$
|
(0.10)
|
|
$
|
1.20
|
Net realized capital (gains) losses, as adjusted
|
|
|
(1.48)
|
|
|
0.05
|
|
|
(0.03)
|
|
|
|
|
0.09
|
|
|
(0.07)
|
|
|
0.00
|
|
|
0.02
|
Operating earnings
|
|
$
|
1.28
|
|
$
|
0.14
|
|
$
|
1.42
|
|
|
|
$
|
1.15
|
|
$
|
0.17
|
|
$
|
(0.10)
|
|
$
|
1.22
|
Weighted average diluted shares outstanding
|
|
|
293.1
|
|
|
293.1
|
|
|
293.1
|
|
|
|
|
291.4
|
|
|
291.4
|
|
|
291.4
|
|
|
291.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment pre-tax operating earnings (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RIS-Fee
|
|
$
|
108.0
|
|
$
|
41.0
|
|
$
|
149.0
|
|
|
|
$
|
130.9
|
|
$
|
26.2
|
|
$
|
(11.8)
|
|
$
|
145.3
|
RIS-Spread
|
|
|
102.1
|
|
|
(19.2)
|
|
|
82.9
|
|
|
|
|
76.0
|
|
|
5.4
|
|
|
(15.0)
|
|
|
66.4
|
Retirement and Income Solutions
|
|
|
210.1
|
|
|
21.8
|
|
|
231.9
|
|
|
|
|
206.9
|
|
|
31.6
|
|
|
(26.8)
|
|
|
211.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Global Investors
|
|
|
130.2
|
|
|
-
|
|
|
130.2
|
|
|
|
|
112.9
|
|
|
-
|
|
|
-
|
|
|
112.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal International
|
|
|
72.4
|
|
|
11.8
|
|
|
84.2
|
|
|
|
|
84.2
|
|
|
8.9
|
|
|
(8.0)
|
|
|
85.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Benefits
|
|
|
83.8
|
|
|
(14.2)
|
|
|
69.6
|
|
|
|
|
73.9
|
|
|
(10.0)
|
|
|
(7.9)
|
|
|
56.0
|
Individual Life
|
|
|
(0.6)
|
|
|
47.0
|
|
|
46.4
|
|
|
|
|
(3.7)
|
|
|
43.2
|
|
|
-
|
|
|
39.5
|
U.S. Insurance Solutions
|
|
|
83.2
|
|
|
32.8
|
|
|
116.0
|
|
|
|
|
70.2
|
|
|
33.2
|
|
|
(7.9)
|
|
|
95.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
(43.0)
|
|
|
-
|
|
|
(43.0)
|
|
|
|
|
(57.8)
|
|
|
-
|
|
|
-
|
|
|
(57.8)
|
Pre-tax operating earnings
|
|
$
|
452.9
|
|
$
|
66.4
|
|
$
|
519.3
|
|
|
|
$
|
416.4
|
|
$
|
73.7
|
|
$
|
(42.7)
|
|
$
|
447.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Income statement line item details of the 3Q16 and 3Q17 significant
variances are available in our earnings conference call presentations on
our website.
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 June 30, 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, Oct. 27, 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 88264943.
-
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 88264943. This replay will
be available approximately two hours after the completion of the live
earnings call through the end of day Nov. 3, 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®12 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,
|
|
9/30/17
|
|
9/30/16
|
|
9/30/17
|
|
9/30/16
|
Net income attributable to PFG
|
|
$
|
810.2
|
|
$
|
308.2
|
|
$
|
1,786.6
|
|
$
|
1,252.1
|
Net realized capital (gains) losses, as adjusted
|
|
|
(436.5)
|
|
|
27.5
|
|
|
(338.8)
|
|
|
8.2
|
Other after-tax adjustments
|
|
|
0.0
|
|
|
0.0
|
|
|
52.0
|
|
|
2.0
|
Operating Earnings*
|
|
$
|
373.7
|
|
$
|
335.7
|
|
$
|
1,499.8
|
|
$
|
1,262.3
|
Income taxes
|
|
|
79.2
|
|
|
80.7
|
|
|
385.2
|
|
|
329.5
|
Pre-Tax Operating Earnings
|
|
$
|
452.9
|
|
$
|
416.4
|
|
$
|
1,885.0
|
|
$
|
1,591.8
|
|
|
|
|
|
|
|
|
|
Segment Pre-Tax Operating Earnings (Losses):
|
|
|
|
|
|
|
|
|
Retirement and Income Solutions
|
|
$
|
210.1
|
|
$
|
206.9
|
|
$
|
909.6
|
|
$
|
769.8
|
Principal Global Investors
|
|
|
130.2
|
|
|
112.9
|
|
|
479.3
|
|
|
412.1
|
Principal International
|
|
|
72.4
|
|
|
84.2
|
|
|
317.7
|
|
|
289.4
|
U.S. Insurance Solutions
|
|
|
83.2
|
|
|
70.2
|
|
|
380.7
|
|
|
340.9
|
Corporate
|
|
|
(43.0)
|
|
|
(57.8)
|
|
|
(202.3)
|
|
|
(220.4)
|
Pre-Tax Operating Earnings
|
|
$
|
452.9
|
|
$
|
416.4
|
|
$
|
1,885.0
|
|
$
|
1,591.8
|
|
|
|
|
|
Per Diluted Share
|
|
Three Months Ended,
|
|
Nine Months Ended,
|
|
9/30/17
|
|
9/30/16
|
|
9/30/17
|
|
9/30/16
|
Net income
|
|
$
|
2.76
|
|
$
|
1.06
|
|
$
|
5.02
|
|
$
|
3.41
|
Net realized capital (gains) losses, as adjusted
|
|
|
(1.48)
|
|
|
0.09
|
|
|
(1.17)
|
|
|
(0.13)
|
Operating Earnings
|
|
$
|
1.28
|
|
$
|
1.15
|
|
$
|
3.85
|
|
$
|
3.28
|
Weighted-average diluted common shares outstanding (in
millions)
|
|
|
293.1
|
|
|
291.4
|
|
|
292.7
|
|
|
292.8
|
|
|
|
|
|
|
|
|
|
*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,
|
|
9/30/17
|
|
12/31/16
|
Total assets (in billions)
|
|
$
|
247.9
|
|
$
|
228.0
|
Stockholders' equity (in millions)
|
|
$
|
12,067.3
|
|
$
|
10,293.8
|
Total common equity (in millions)
|
|
$
|
11,996.4
|
|
$
|
10,227.3
|
Total common equity excluding accumulated other comprehensive income
(AOCI) other than foreign currency translation adjustment (in
millions)
|
|
$
|
11,004.2
|
|
$
|
9,808.7
|
End of period common shares outstanding (in millions)
|
|
|
288.5
|
|
|
287.7
|
Book value per common share
|
|
$
|
41.58
|
|
$
|
35.55
|
Book value per common share excluding AOCI other than foreign
currency translation adjustment
|
|
$
|
38.14
|
|
$
|
34.09
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
(in millions, except as indicated)
|
|
|
|
|
|
Period Ended,
|
|
|
9/30/17
|
|
12/31/16
|
Stockholders' Equity, Excluding AOCI Other Than Foreign Currency
Translation Adjustment, Available to Common Stockholders:
|
|
|
|
|
Stockholders' equity
|
|
$
|
12,067.3
|
|
|
$
|
10,293.8
|
|
Noncontrolling interest
|
|
|
(70.9
|
)
|
|
|
(66.5
|
)
|
Stockholders' equity available to common stockholders
|
|
|
11,996.4
|
|
|
|
10,227.3
|
|
Net unrealized capital (gains) losses
|
|
|
(1,387.8
|
)
|
|
|
(827.0
|
)
|
Net unrecognized postretirement benefit obligation
|
|
|
395.6
|
|
|
|
408.4
|
|
Stockholders' equity, excluding AOCI other than foreign currency
translation adjustment, available to common stockholders
|
|
$
|
11,004.2
|
|
|
$
|
9,808.7
|
|
|
|
|
|
|
Book Value Per Common Share, Excluding AOCI Other Than Foreign
Currency Translation Adjustment:
|
|
|
|
|
Book value per common share
|
|
$
|
41.58
|
|
|
$
|
35.55
|
|
Net unrealized capital (gains) losses
|
|
|
(4.81
|
)
|
|
|
(2.88
|
)
|
Net unrecognized postretirement benefit obligation
|
|
|
1.37
|
|
|
|
1.42
|
|
Book value per common share, excluding AOCI other than foreign
currency translation adjustment
|
|
$
|
38.14
|
|
|
$
|
34.09
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
(in millions)
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
Trailing Twelve Months,
|
|
|
9/30/17
|
|
9/30/16
|
|
9/30/17
|
|
9/30/16
|
Income Taxes:
|
|
|
|
|
|
|
|
|
Total GAAP income taxes
|
|
$
|
344.6
|
|
$
|
43.3
|
|
$
|
498.9
|
|
$
|
237.5
|
Net realized capital gains (losses) tax adjustments
|
|
|
(284.3)
|
|
|
19.4
|
|
|
(227.6)
|
|
|
28.6
|
Tax benefit related to other after-tax adjustments
|
|
|
-
|
|
|
-
|
|
|
34.4
|
|
|
1.0
|
Income taxes related to equity method investments and noncontrolling
interest
|
|
|
18.9
|
|
|
18.0
|
|
|
79.5
|
|
|
62.4
|
Income taxes
|
|
$
|
79.2
|
|
$
|
80.7
|
|
$
|
385.2
|
|
$
|
329.5
|
|
|
|
|
|
|
|
|
|
Net Realized Capital Gains (Losses):
|
|
|
|
|
|
|
|
|
GAAP net realized capital gains (losses)
|
|
$
|
676.6
|
|
$
|
44.2
|
|
$
|
520.7
|
|
$
|
173.4
|
|
|
|
|
|
|
|
|
|
Recognition of front-end fee revenues
|
|
|
0.1
|
|
|
0.2
|
|
|
(0.4)
|
|
|
0.4
|
Market value adjustments to fee revenues
|
|
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.2)
|
|
|
(2.4)
|
Net realized capital gains (losses) related to equity method
investments
|
|
|
1.3
|
|
|
(0.1)
|
|
|
2.8
|
|
|
(0.3)
|
Derivative and hedging-related adjustments
|
|
|
(10.8)
|
|
|
(24.2)
|
|
|
(64.9)
|
|
|
(105.9)
|
Sponsored investment fund adjustments
|
|
|
1.6
|
|
|
1.7
|
|
|
5.6
|
|
|
5.8
|
Amortization of deferred acquisition costs
|
|
|
20.2
|
|
|
(69.6)
|
|
|
84.0
|
|
|
(102.6)
|
Capital gains distributed - operating expenses
|
|
|
(9.5)
|
|
|
(8.5)
|
|
|
(22.9)
|
|
|
(2.0)
|
Amortization of other actuarial balances
|
|
|
3.2
|
|
|
(11.2)
|
|
|
14.4
|
|
|
(17.3)
|
Market value adjustments of embedded derivatives
|
|
|
40.1
|
|
|
46.4
|
|
|
43.6
|
|
|
51.4
|
Capital gains distributed - cost of interest credited
|
|
|
(2.0)
|
|
|
(8.9)
|
|
|
(16.5)
|
|
|
(14.0)
|
Net realized capital gains (losses) tax adjustments
|
|
|
(284.3)
|
|
|
19.4
|
|
|
(227.6)
|
|
|
28.6
|
Net realized capital gains (losses) attributable to noncontrolling
interest, after-tax
|
|
|
0.1
|
|
|
(16.8)
|
|
|
0.2
|
|
|
(23.3)
|
Total net realized capital gains (losses) after-tax adjustments
|
|
|
(240.1)
|
|
|
(71.7)
|
|
|
(181.9)
|
|
|
(181.6)
|
|
|
|
|
|
|
|
|
|
Net realized capital gains (losses), as adjusted
|
|
$
|
436.5
|
|
$
|
(27.5)
|
|
$
|
338.8
|
|
$
|
(8.2)
|
|
|
|
|
|
|
|
|
|
Other After-Tax Adjustments:
|
|
|
|
|
|
|
|
|
Exited group medical insurance business:
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(3.0)
|
Tax
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1.0
|
Early extinguishment of debt:
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
-
|
|
|
-
|
|
|
(86.4)
|
|
|
-
|
Tax
|
|
|
-
|
|
|
-
|
|
|
34.4
|
|
|
-
|
Total other after-tax adjustments
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(52.0)
|
|
$
|
(2.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
(in millions)
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
Trailing Twelve Months,
|
|
|
9/30/17
|
|
9/30/16
|
|
9/30/17
|
|
9/30/16
|
Principal Global Investors Operating Revenues Less Pass-Through
Commissions:
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$ 367.5
|
|
$ 346.2
|
|
$ 1,449.0
|
|
$ 1,354.3
|
Commission expense
|
|
(40.0)
|
|
(41.6)
|
|
(160.4)
|
|
(167.1)
|
Operating revenues less pass-through commissions
|
|
$ 327.5
|
|
$ 304.6
|
|
$ 1,288.6
|
|
$ 1,187.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal International Combined Net Revenue (at PFG Share)
|
|
|
|
|
|
|
|
|
Pre-tax operating earnings
|
|
$ 72.4
|
|
$ 84.2
|
|
$ 317.7
|
|
$ 289.4
|
Combined operating expenses (at PFG share)
|
|
163.6
|
|
131.4
|
|
564.0
|
|
499.6
|
Combined net revenue (at PFG share)
|
|
$ 236.0
|
|
$ 215.6
|
|
$ 881.7
|
|
$ 789.0
|
|
|
|
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1 Use of non-GAAP financial measures is discussed in this
release after segment results. Operating earnings for total company is
after tax.
2 Represents the percentage of Principal actively managed
mutual funds, exchange traded funds (ETFs), insurance separate accounts,
and collective investment trusts (CITs) in the top two Morningstar
quartiles. Excludes Money Market, Stable Value, Liability Driven
Investment (Short, Intermediate and Extended Duration), & US Property
Separate Account.
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 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.
10 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.
11 Pre-tax return on premium and fees = pre-tax operating
earnings divided by premium and fees.
12 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/20171026006465/en/
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