Company Also Announces Increase to Common Stock Dividend
Company Highlights
-
First quarter 2018 net income attributable to Principal Financial
Group, Inc. (PFG) of $397.1 million, or $1.36 per diluted share
-
Record first quarter 2018 non-GAAP operating earnings1
of $408.8 million, or $1.40 per diluted share
-
Record assets under management (AUM) of $673.8 billion, up 9
percent over first quarter 2017
-
Company declares second quarter 2018 common stock dividend of $0.52
per share; a 13 percent increase over second quarter 2017
DES MOINES, Iowa--(BUSINESS WIRE)--
Principal Financial Group® (Nasdaq: PFG) today announced
results for first quarter 2018.
-
Net income attributable to PFG for first quarter 2018 of
$397.1 million, compared to $348.9 million for first quarter 2017.
Net income per diluted share of $1.36 for first quarter 2018 compared
to $1.19 in prior year quarter.
-
Record non-GAAP operating earnings for first quarter 2018 of $408.8
million, compared to $370.5 million for first quarter 2017. Record
non-GAAP operating earnings per diluted share (EPS) of $1.40 for first
quarter 2018 compared to $1.27 for first quarter 2017.
-
Quarterly common stock dividend of $0.52 per share for second
quarter 2018 was authorized by the company’s Board of Directors,
bringing the trailing twelve-month dividend to $1.99 per share, a 14
percent increase compared to the prior year trailing twelve-month
period. The dividend will be payable on June 29, 2018, to shareholders
of record as of June 4, 2018.
“First quarter was a good start to the year for Principal®,
with our diversified, integrated businesses delivering record non-GAAP
operating earnings and record assets under management,” said Dan
Houston, chairman, president, and CEO of Principal. “Our continued
growth reflects very strong investment performance, and ongoing
investments in our businesses to enhance our solution set, expand our
distribution reach, improve the customer experience and deliver better
outcomes for customers and clients.”
“We continue to balance investments in growth with disciplined expense
management,” added Houston. “We committed more than $80 million to
strategic acquisitions during the quarter. We also distributed more than
$325 million to shareholders through common stock dividends and share
buybacks, reflecting our balanced approach to capital deployment and our
ongoing commitment to creating long-term value for our shareholders.”
Other first quarter highlights
-
Strong Morningstar investment performance2, with 80 percent
of Principal’s investment options above median on a
one-year basis, 72 percent on a three-year basis and 86 percent on a
five-year basis.
-
We continue to execute on our accelerated investment in digital
business strategies as we intensify our focus on the customer
experience, direct-to-consumer offerings and our use of data science
in investment research.
-
Record total company AUM of $673.8 billion despite total company net
cash flows of $(1.5) billion.
-
Retirement and Income Solutions (RIS) - Fee sales of $4.1 billion and
net cash flow of $1.0 billion helped drive end of period account
values to $224.2 billion, a 10 percent increase over the prior year
quarter.
-
RIS - Spread sales of $0.9 billion helped drive end of period account
values to $41.4 billion, an 8 percent increase over the prior year
quarter.
-
Principal Global Investors (PGI) ended the quarter with $423.8 billion
of AUM. Pre-tax return on operating revenues less pass-through
commissions3 was 37.3 percent on a trailing twelve-month
basis.
-
Principal International (PI) generated net cash flows of $2.3 billion
and achieved record AUM of $171.1 billion, a 16 percent increase over
the year ago quarter. Additionally, PI reported record quarterly
pre-tax operating earnings in Southeast Asia and Hong Kong.
-
Specialty Benefits premium and fees4 increased 8 percent
compared to the year ago quarter driven by strong retention and sales.
-
Individual Life premium and fees increased 6 percent with a 15 percent
increase in sales over the year ago quarter.
-
Continued strong capital position with a 2018 capital deployment
target of $900 million to $1.3 billion. Deployed $409.9 million of
capital in first quarter 2018, including:
-
$178.6 million to repurchase 2.9 million shares of common stock;
-
$147.3 million of common stock dividends with the $0.51 per share
common dividend paid in the first quarter; and
-
$84.0 million committed to acquisitions.
Segment Results
|
|
|
Retirement and Income Solutions - Fee
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating earnings5
|
|
|
$131.3
|
|
|
$144.7
|
|
|
(9
|
)%
|
|
|
$513.4
|
|
|
$524.1
|
|
|
(2
|
)%
|
|
Net revenue6
|
|
|
$412.9
|
|
|
$403.5
|
|
|
2
|
%
|
|
|
$1,603.7
|
|
|
$1,550.9
|
|
|
3
|
%
|
|
Pre-tax return on net revenue7
|
|
|
31.8%
|
|
|
35.9%
|
|
|
|
|
|
32.0%
|
|
|
33.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating earnings decreased $13.4 million primarily
due to lower net investment income and higher operating expenses.
-
Net revenue increased $9.4 million which reflects higher fees
in the current quarter driven by growth in account values partially
offset by lower net investment income.
|
|
|
Retirement and Income Solutions - Spread
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating earnings
|
|
|
$101.3
|
|
|
$99.5
|
|
|
2
|
%
|
|
|
$374.8
|
|
|
$333.2
|
|
|
12
|
%
|
|
Net revenue
|
|
|
$143.6
|
|
|
$143.9
|
|
|
0
|
%
|
|
|
$543.9
|
|
|
$520.7
|
|
|
4
|
%
|
|
Pre-tax return on net revenue
|
|
|
70.5%
|
|
|
69.1%
|
|
|
|
|
|
68.9%
|
|
|
64.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating earnings increased $1.8 million primarily due
to more favorable mortality gains.
-
Net revenue decreased $0.3 million as growth in the business
was offset by spread compression.
|
|
|
Principal Global Investors
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating earnings
|
|
|
$110.3
|
|
|
$100.0
|
|
|
10
|
%
|
|
|
$480.0
|
|
|
$464.1
|
|
|
3
|
%
|
|
Operating revenues less pass-through commissions
|
|
|
$325.3
|
|
|
$306.3
|
|
|
6
|
%
|
|
|
$1,303.8
|
|
|
$1,260.7
|
|
|
3
|
%
|
|
Pre-tax return on operating revenues less pass-through commissions8
|
|
|
34.4%
|
|
|
33.1%
|
|
|
|
|
|
37.3%
|
|
|
37.3
|
%
|
|
Total PGI assets under management (billions)
|
|
|
$423.8
|
|
|
$403.0
|
|
|
5
|
%
|
|
|
|
|
|
|
|
PGI sourced assets under management (billions)
|
|
|
$213.7
|
|
|
$206.6
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating earnings increased $10.3 million primarily
due to growth in operating revenues less pass-through commissions.
-
Operating revenues less pass-through commissions increased
$19.0 million driven by an 8 percent growth in management fees.
|
|
|
Principal International
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating earnings
|
|
|
$87.0
|
|
|
$100.9
|
|
|
(14
|
)%
|
|
|
$316.1
|
|
|
$321.0
|
|
|
(2
|
)%
|
|
Combined9
|
|
|
$239.9
|
|
|
$227.7
|
|
|
5
|
%
|
|
|
$934.2
|
|
|
$834.7
|
|
|
12
|
%
|
|
Pre-tax return on combined net revenue (at PFG share)
|
|
|
36.3%
|
|
|
44.3%
|
|
|
|
|
|
33.8%
|
|
|
38.5%
|
|
|
|
|
Assets under management (billions)
|
|
|
$171.1
|
|
|
$147.3
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating earnings decreased $13.9 million as growth in
the business was more than offset by unfavorable encaje performance in
the current quarter relative to favorable encaje performance in the
prior year quarter.
-
Combined net revenue (at PFG share) increased $12.2 million
driven by growth in the business and record AUM.
|
|
|
Specialty Benefits Insurance
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating earnings
|
|
|
$66.9
|
|
|
$45.5
|
|
|
47
|
%
|
|
|
$276.9
|
|
|
$257.8
|
|
|
7
|
%
|
|
Premium and fees
|
|
|
$525.9
|
|
|
$487.6
|
|
|
8
|
%
|
|
|
$2,059.4
|
|
|
$1,900.2
|
|
|
8
|
%
|
|
Pre-tax return on premium and fees10
|
|
|
12.7%
|
|
|
9.3%
|
|
|
|
|
|
13.4%
|
|
|
13.6%
|
|
|
|
|
Incurred loss ratio
|
|
|
62.2%
|
|
|
66.5%
|
|
|
|
|
|
62.1%
|
|
|
63.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating earnings increased $21.4 million due to
growth in the business and favorable claims experience in the current
quarter relative to unfavorable claims experience in the prior year
quarter.
-
Premium and fees increased $38.3 million reflecting strong
retention and sales.
-
Incurred loss ratio was favorable and more than offset the
typical first quarter claims seasonality.
|
|
|
Individual Life Insurance
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating earnings
|
|
|
$41.7
|
|
|
$40.7
|
|
|
2
|
%
|
|
|
$130.2
|
|
|
$109.1
|
|
|
19
|
%
|
|
Premium and fees
|
|
|
$285.6
|
|
|
$270.0
|
|
|
6
|
%
|
|
|
$1,097.9
|
|
|
$1,010.9
|
|
|
9
|
%
|
|
Pre-tax return on premium and fees
|
|
|
14.6%
|
|
|
15.1%
|
|
|
|
|
|
11.9%
|
|
|
10.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating earnings increased $1.0 million primarily due
to growth in the business.
-
Premium and fees increased $15.6 million.
|
|
|
Corporate
|
|
(in millions except percentages or otherwise noted)
|
|
|
Quarter
|
|
|
Trailing Twelve Months
|
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
|
1Q18
|
|
|
1Q17
|
|
|
% Change
|
|
Pre-tax operating losses
|
|
|
$(42.0
|
)
|
|
|
$(58.5
|
)
|
|
|
28
|
%
|
|
|
$(194.0
|
)
|
|
|
$(224.1
|
)
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Pre-tax operating losses decreased $16.5 million reflecting
lower corporate expenses. We continue to expect to be within our
guided range of $(190) - $(210) million for full year 2018.
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 non-GAAP operating earnings, net income attributable to PFG, 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, 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; changes in laws, regulations or accounting
standards; 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 Iowa insurance laws impose
on Principal Life; 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, including 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; client
terminations, withdrawals or changes in investor preferences; inability
to attract and retain qualified employees and sales representatives and
develop new distribution sources; an interruption in telecommunication,
information technology or other systems, or a failure to maintain the
confidentiality, integrity or availability of data residing on such
systems; international business risks; fluctuations in foreign currency
exchange rates; the company may need to fund deficiencies in its “Closed
Block” assets; the company’s reinsurers could default on their
obligations or increase their rates; risks arising from acquisitions of
businesses; and loss of key vendor relationships or failure of a vendor
to protect information of our customers or employees.
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, Apr. 27, 2018, 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 4782916.
-
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 4782916. This replay will
be available approximately two hours after the completion of the live
earnings call through the end of day May 4, 2018.
-
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 and slide presentation is currently
available at principal.com/investor,
and may be referred to during the call.
About
Principal®11
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,
|
|
|
|
3/31/18
|
|
|
3/31/17
|
|
|
3/31/18
|
|
|
3/31/17
|
|
Net income attributable to PFG
|
|
|
$
|
397.1
|
|
|
|
$
|
348.9
|
|
|
|
$
|
2,358.6
|
|
|
|
$
|
1,297.4
|
|
|
Net realized capital (gains) losses, as adjusted
|
|
|
|
11.7
|
|
|
|
|
21.6
|
|
|
|
|
(317.2
|
)
|
|
|
|
65.9
|
|
|
Other after-tax adjustments
|
|
|
|
0.0
|
|
|
|
|
0.0
|
|
|
|
|
(524.5
|
)
|
|
|
|
52.0
|
|
|
Non-GAAP Operating Earnings*
|
|
|
$
|
408.8
|
|
|
|
$
|
370.5
|
|
|
|
$
|
1,516.9
|
|
|
|
$
|
1,415.3
|
|
|
Income taxes
|
|
|
|
87.7
|
|
|
|
|
102.3
|
|
|
|
|
380.5
|
|
|
|
|
369.9
|
|
|
Non-GAAP Pre-Tax Operating Earnings
|
|
|
$
|
496.5
|
|
|
|
$
|
472.8
|
|
|
|
$
|
1,897.4
|
|
|
|
$
|
1,785.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Pre-Tax Operating Earnings (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement and Income Solutions
|
|
|
$
|
232.6
|
|
|
|
$
|
244.2
|
|
|
|
$
|
888.2
|
|
|
|
$
|
857.3
|
|
|
Principal Global Investors
|
|
|
|
110.3
|
|
|
|
|
100.0
|
|
|
|
|
480.0
|
|
|
|
|
464.1
|
|
|
Principal International
|
|
|
|
87.0
|
|
|
|
|
100.9
|
|
|
|
|
316.1
|
|
|
|
|
321.0
|
|
|
U.S. Insurance Solutions
|
|
|
|
108.6
|
|
|
|
|
86.2
|
|
|
|
|
407.1
|
|
|
|
|
366.9
|
|
|
Corporate
|
|
|
|
(42.0
|
)
|
|
|
|
(58.5
|
)
|
|
|
|
(194.0
|
)
|
|
|
|
(224.1
|
)
|
|
Total Segment Pre-Tax Operating Earnings
|
|
|
$
|
496.5
|
|
|
|
$
|
472.8
|
|
|
|
$
|
1,897.4
|
|
|
|
$
|
1,785.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Diluted Share
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
|
|
|
|
3/31/18
|
|
|
3/31/17
|
|
|
|
|
Net income
|
|
|
$
|
1.36
|
|
|
|
$
|
1.19
|
|
|
|
|
|
Net realized capital (gains) losses, as adjusted
|
|
|
|
0.04
|
|
|
|
|
0.08
|
|
|
|
|
|
Non-GAAP Operating Earnings
|
|
|
$
|
1.40
|
|
|
|
$
|
1.27
|
|
|
|
|
|
Weighted-average diluted common shares outstanding (in
millions)
|
|
|
|
292.9
|
|
|
|
|
292.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*U.S. GAAP (GAAP) net income attributable to PFG versus non-GAAP
operating earnings
Management uses non-GAAP operating earnings, which is a 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 non-GAAP 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,
|
|
|
|
3/31/18
|
|
|
12/31/17
|
|
Total assets (in billions)
|
|
|
$
|
253.6
|
|
|
$
|
253.9
|
|
Stockholders’ equity (in millions)
|
|
|
$
|
12,255.8
|
|
|
$
|
12,921.9
|
|
Total common equity (in millions)
|
|
|
$
|
12,186.9
|
|
|
$
|
12,849.3
|
|
Total common equity excluding accumulated other comprehensive income
(AOCI) other than foreign currency translation adjustment (in
millions)
|
|
|
$
|
11,746.4
|
|
|
$
|
11,765.3
|
|
End of period common shares outstanding (in millions)
|
|
|
|
287.7
|
|
|
|
289.0
|
|
Book value per common share
|
|
|
$
|
42.36
|
|
|
$
|
44.46
|
|
Book value per common share excluding AOCI other than foreign
currency translation adjustment
|
|
|
$
|
40.83
|
|
|
$
|
40.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
|
(in millions, except as indicated)
|
|
|
|
|
|
|
|
|
|
Period Ended,
|
|
|
|
|
3/31/18
|
|
|
12/31/17
|
|
Stockholders’ Equity, Excluding AOCI Other Than Foreign Currency
Translation Adjustment, Available to Common Stockholders:
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
$
|
12,255.8
|
|
|
|
$
|
12,921.9
|
|
|
Noncontrolling interest
|
|
|
|
(68.9
|
)
|
|
|
|
(72.6
|
)
|
|
Stockholders’ equity available to common stockholders
|
|
|
|
12,186.9
|
|
|
|
|
12,849.3
|
|
|
Net unrealized capital (gains) losses
|
|
|
|
(883.8
|
)
|
|
|
|
(1,455.1
|
)
|
|
Net unrecognized postretirement benefit obligation
|
|
|
|
443.3
|
|
|
|
|
371.1
|
|
|
Stockholders’ equity, excluding AOCI other than foreign currency
translation adjustment, available to common stockholders
|
|
|
$
|
11,746.4
|
|
|
|
$
|
11,765.3
|
|
|
|
|
|
|
|
|
|
|
Book Value Per Common Share, Excluding AOCI Other Than Foreign
Currency Translation Adjustment:
|
|
|
|
|
|
|
|
Book value per common share
|
|
|
$
|
42.36
|
|
|
|
$
|
44.46
|
|
|
Net unrealized capital (gains) losses
|
|
|
|
(3.07
|
)
|
|
|
|
(5.03
|
)
|
|
Net unrecognized postretirement benefit obligation
|
|
|
|
1.54
|
|
|
|
|
1.28
|
|
|
Book value per common share, excluding AOCI other than foreign
currency translation adjustment
|
|
|
$
|
40.83
|
|
|
|
$
|
40.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
Trailing Twelve Months,
|
|
|
|
|
3/31/18
|
|
|
3/31/17
|
|
|
3/31/18
|
|
|
3/31/17
|
|
Income Taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP income taxes (benefits)
|
|
|
$
|
54.5
|
|
|
|
$
|
60.4
|
|
|
|
$
|
(78.2
|
)
|
|
|
$
|
219.7
|
|
|
Net realized capital gains (losses) tax adjustments
|
|
|
|
12.1
|
|
|
|
|
19.4
|
|
|
|
|
(216.4
|
)
|
|
|
|
40.8
|
|
|
Tax benefit related to other after-tax adjustments
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
594.5
|
|
|
|
|
34.4
|
|
|
Income taxes related to equity method investments and noncontrolling
interest
|
|
|
|
21.1
|
|
|
|
|
22.5
|
|
|
|
|
80.6
|
|
|
|
|
75.0
|
|
|
Income taxes
|
|
|
$
|
87.7
|
|
|
|
$
|
102.3
|
|
|
|
$
|
380.5
|
|
|
|
$
|
369.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized Capital Gains (Losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net realized capital gains (losses)
|
|
|
$
|
(25.1
|
)
|
|
|
$
|
(16.6
|
)
|
|
|
$
|
515.7
|
|
|
|
$
|
17.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognition of front-end fee revenues
|
|
|
|
(1.6
|
)
|
|
|
|
(0.2
|
)
|
|
|
|
(1.6
|
)
|
|
|
|
(0.3
|
)
|
|
Market value adjustments to fee revenues
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(0.1
|
)
|
|
|
|
(1.8
|
)
|
|
Net realized capital gains (losses) related to equity method
investments
|
|
|
|
0.2
|
|
|
|
|
0.6
|
|
|
|
|
1.0
|
|
|
|
|
0.4
|
|
|
Derivative and hedging-related adjustments
|
|
|
|
(17.8
|
)
|
|
|
|
(17.6
|
)
|
|
|
|
(59.6
|
)
|
|
|
|
(87.4
|
)
|
|
Sponsored investment fund adjustments
|
|
|
|
2.1
|
|
|
|
|
1.2
|
|
|
|
|
7.2
|
|
|
|
|
5.9
|
|
|
Amortization of deferred acquisition costs
|
|
|
|
(1.5
|
)
|
|
|
|
7.0
|
|
|
|
|
38.9
|
|
|
|
|
(19.9
|
)
|
|
Capital gains distributed – operating expenses
|
|
|
|
10.7
|
|
|
|
|
(6.1
|
)
|
|
|
|
(22.1
|
)
|
|
|
|
(28.9
|
)
|
|
Amortization of other actuarial balances
|
|
|
|
7.1
|
|
|
|
|
2.1
|
|
|
|
|
12.6
|
|
|
|
|
(2.1
|
)
|
|
Market value adjustments of embedded derivatives
|
|
|
|
2.4
|
|
|
|
|
1.8
|
|
|
|
|
48.7
|
|
|
|
|
49.4
|
|
|
Capital gains distributed – cost of interest credited
|
|
|
|
(0.1
|
)
|
|
|
|
(11.0
|
)
|
|
|
|
(5.2
|
)
|
|
|
|
(22.5
|
)
|
|
Net realized capital gains (losses) tax adjustments
|
|
|
|
12.1
|
|
|
|
|
19.4
|
|
|
|
|
(216.4
|
)
|
|
|
|
40.8
|
|
|
Net realized capital gains (losses) attributable to noncontrolling
interest, after-tax
|
|
|
|
(0.2
|
)
|
|
|
|
(2.2
|
)
|
|
|
|
(1.9
|
)
|
|
|
|
(17.4
|
)
|
|
Total net realized capital gains (losses) after-tax adjustments
|
|
|
|
13.4
|
|
|
|
|
(5.0
|
)
|
|
|
|
(198.5
|
)
|
|
|
|
(83.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized capital gains (losses), as adjusted
|
|
|
$
|
(11.7
|
)
|
|
|
$
|
(21.6
|
)
|
|
|
$
|
317.2
|
|
|
|
$
|
(65.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other After-Tax Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to PFG Foundation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
(70.0
|
)
|
|
|
$
|
-
|
|
|
Tax
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
26.2
|
|
|
|
|
-
|
|
|
Tax Cuts and Jobs Act:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Tax
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
568.3
|
|
|
|
|
-
|
|
|
Early extinguishment of debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(86.4
|
)
|
|
Tax
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
34.4
|
|
|
Total other after-tax adjustments
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
524.5
|
|
|
|
$
|
(52.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Financial Group, Inc.
|
|
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
Trailing Twelve Months,
|
|
|
|
|
3/31/18
|
|
|
3/31/17
|
|
|
3/31/18
|
|
|
3/31/17
|
|
Principal Global Investors Operating Revenues Less Pass-Through
Commissions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
368.5
|
|
|
|
$
|
345.9
|
|
|
|
$
|
1,467.0
|
|
|
|
$
|
1,423.5
|
|
|
Commission expense
|
|
|
|
(43.2
|
)
|
|
|
|
(39.6
|
)
|
|
|
|
(163.2
|
)
|
|
|
|
(162.8
|
)
|
|
Operating revenues less pass-through commissions
|
|
|
$
|
325.3
|
|
|
|
$
|
306.3
|
|
|
|
$
|
1,303.8
|
|
|
|
$
|
1,260.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal International Combined Net Revenue (at PFG Share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax operating earnings
|
|
|
$
|
87.0
|
|
|
|
$
|
100.9
|
|
|
|
$
|
316.1
|
|
|
|
$
|
321.0
|
|
|
Combined operating expenses other than pass-through commissions (at
PFG share)
|
|
|
|
152.9
|
|
|
|
|
126.8
|
|
|
|
|
618.1
|
|
|
|
|
513.7
|
|
|
Combined net revenue (at PFG share)
|
|
|
$
|
239.9
|
|
|
|
$
|
227.7
|
|
|
|
$
|
934.2
|
|
|
|
$
|
834.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Use of non-GAAP financial measures is discussed in this
release after segment results. Non-GAAP 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), Hedge Fund
Separate Account & US Property Separate Account.
3 The company has provided reconciliations of the non-GAAP
measures to the most directly comparable U.S. GAAP measures 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 Premium and fees = premiums and other considerations plus
fees and other revenues.
5 Pre-tax operating earnings = operating earnings before
income taxes and after noncontrolling interest.
6 Net revenue = operating revenues less benefits, claims and
settlement expenses less dividends to policyholders.
7 Pre-tax return on net revenue = pre-tax operating earnings
divided by net revenue.
8 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.
9 Combined net revenue: net revenue for all Principal
International companies at 100% less pass-through commissions. Prior to
1Q 2018, pass-through commissions were not excluded from this
definition. 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. net revenue (at PFG share)
10 Pre-tax return on premium and fees = pre-tax operating
earnings divided by premium and fees.
11 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: https://www.businesswire.com/news/home/20180426006622/en/
Source: Principal Financial Group