Through the Fourth Quarter Ended December 31, 2016 (unaudited) Financial Supplement

Transcription

1 Through the Fourth Quarter Ended December 31, 2016 (unaudited) Financial Supplement

2 Financial Reporting Structure PRINCIPAL FINANCIAL GROUP, INC. Retirement and Income Solutions Principal Global Investors Principal International U.S. Insurance Solutions Corporate Fee Specialty Benefits Insurance Spread Individual Life Insurance Exchange Listing Common stock of the Principal Financial Group, Inc. is traded on the NYSE under the ticker symbol PFG.

3 Financial Supplement Table of Contents Summary Financial and Market Highlights 2-3 Income Statement Time Series - Fee, Spread and Risk Businesses 4 Consolidated Segment Income Statement Time Series Principal Financial Group, Inc. Retirement and Income Solutions Segment 6 Fee Spread 7 Principal Global Investors Segment Principal International Segment 8 U.S. Insurance Solutions Segment Specialty Benefits Insurance 9 Individual Life Insurance Corporate Segment 10 Consolidated Balance Sheet 11 Assets Under Management Rollforward Detail by Asset Manager 12 Principal Global Investors - Assets Under Management Rollforward Detail by Asset Class 13 Principal Global Investors - Assets Under Management Detail 14 Principal International - Assets Under Management Rollforward Detail by Country Selected Segment Financial Highlights Retirement and Income Solutions - Account Values 18 Retirement and Income Solutions - Defined Contribution and Defined Benefit Detail by Employer Size 19 Principal International - Financial Highlights by Country 20 Principal International - Exchange Rates 21 Principal International - Income Statement Detail in Local Currency Assuming 100% Ownership 22 U.S. Insurance Solutions - Specialty Benefits Insurance 24 U.S. Insurance Solutions - Individual Life Insurance 25 Consolidated Invested Assets 26 Net Realized Capital Gains (Losses) and Net Investment Income 27 Non-GAAP Financial Measure Reconciliations Use of non-gaap financial measures A non-gaap financial measure is defined as a numerical measure of our performance, financial position, or cash flows that includes adjustments from a comparable financial measure presented in accordance with U.S. GAAP. We use a number of non-gaap financial measures that management believes are useful to investors because they illustrate the performance of our normal, ongoing operations, which is important in understanding and evaluating our financial condition and results of operations. While such measures are also consistent with measures utilized by investors to evaluate performance, they are not a substitute for U.S. GAAP financial measures. Therefore, we have provided reconciliations of the non-gaap financial measures to the most directly comparable U.S. GAAP financial measure, see Non-GAAP Financial Measures Reconciliations located on pages We adjust U.S. GAAP financial measures for items not directly related to ongoing operations. However, it is possible that these adjusting items have occurred in the past and could recur in the future. Management also uses non-gaap financial measures for goal setting, as a basis in determining employee and senior management awards and compensation, and to evaluate performance on a basis comparable to that used by securities analysts. We also use a variety of other operational measures that do not have U.S. GAAP counterparts, and therefore do not fit the definition of non-gaap financial measures. Assets under management is an example of an operational measure that is not considered a non-gaap financial measure.

4 Summary Financial and Market Highlights (per share, except as indicated) Twelve Months Ended, Basic Earnings Per Common Share Operating earnings * $ 1.29 $ 1.17 $ 1.16 $ 0.98 $ 1.04 $ 4.60 $ 4.32 Net income $ 1.10 $ 1.07 $ 1.11 $ 1.26 $ 0.87 $ 4.55 $ 4.11 Weighted average common shares outstanding (in millions) Diluted Earnings Per Common Share Operating earnings * $ 1.27 $ 1.15 $ 1.15 $ 0.97 $ 1.02 $ 4.55 $ 4.26 Net income $ 1.09 $ 1.06 $ 1.10 $ 1.25 $ 0.86 $ 4.50 $ 4.06 Weighted average common shares outstanding (in millions) Book Value Available to Common Stockholders Excluding AOCI * $ $ $ $ $ $ $ Excluding AOCI, other than foreign currency translation adjustment * $ $ $ $ $ $ $ End of period common shares outstanding (in millions) Operating Return on Average Equity Available to Common Stockholders (trailing twelve months) Excluding AOCI * 12.6% 12.1% 12.1% 12.2% 12.8% 12.6% 12.8% Excluding AOCI, other than foreign currency translation adjustment * 14.1% 13.5% 13.3% 13.4% 14.2% 14.1% 14.2% Share Repurchase Data Shares repurchased (in millions) Cost of shares repurchased (in millions) $ 32.0 $ 35.1 $ $ 85.9 $ $ $ Average price per share repurchased $ $ $ $ $ $ $ Dividend Information Dividends per share $ 0.43 $ 0.41 $ 0.39 $ 0.38 $ 0.38 $ 1.61 $ 1.50 Dividends paid (in millions) $ $ $ $ $ $ $ Trading Statistics High $ $ $ $ $ $ $ Low $ $ $ $ $ $ $ Close $ $ $ $ $ $ $ Volume (in millions) Valuation Data (Closing Prices) Market capitalization (in millions) $ 16, $ 14, $ 11, $ 11, $ 13, $ 16, $ 13, Price to earnings multiple Price to book value multiple Investment Performance ~ 1-Year 51% 59% 72% 73% 88% 51% 88% 3-Year 76% 90% 95% 91% 89% 76% 89% 5-Year 86% 86% 93% 94% 93% 86% 93% AUM by Asset Manager (in billions) Principal Global Investors $ $ $ $ $ $ $ Principal International and Other Entities of PFG Third Party Asset Managers Total $ $ $ $ $ $ $ * This is a non-gaap financial measure. See non-gaap financial measure reconciliations on pages ~ Represents the percentage of Principal mutual funds, separate accounts and collective investment trusts (CITs) in the top two Morningstar quartiles. 2

5 Summary Financial Highlights (in millions, except as indicated) 31-Dec Sep Jun Mar Dec Dec-14 Retirement and Income Solutions - Fee Net revenue $ 1,511.1 $ 1,499.6 $ 1,526.3 $ 1,546.7 $ 1,573.5 $ 1,563.7 Year over year net revenue growth -4.0% -5.1% -3.7% -1.7% 0.6% 12.6% Pre-tax operating earnings $ $ $ $ $ $ Pre-tax return on net revenue 32.7% 32.9% 29.3% 30.1% 31.4% 37.0% Retirement and Income Solutions - Spread Net revenue $ $ $ $ $ $ Year over year net revenue growth 12.3% 5.9% -1.6% 0.2% -6.9% -5.3% Pre-tax operating earnings $ $ $ $ $ $ Pre-tax return on net revenue 61.3% 59.1% 56.5% 56.8% 56.4% 58.0% Principal Global Investors Management fee revenue $ 1,120.2 $ 1,107.4 $ 1,092.1 $ 1,090.3 $ 1,089.2 $ Other revenue Operating revenues $ 1,387.1 $ 1,354.3 $ 1,337.6 $ 1,324.1 $ 1,343.5 $ 1,257.4 Operating revenues less pass-through commissions * ^ $ 1,224.1 $ 1,187.2 $ 1,166.8 $ 1,147.3 $ 1,161.2 $ 1,084.4 Year over year operating revenues less pass-through commissions 5.4% 2.1% 1.9% 2.9% 7.1% 5.5% Pre-tax operating earnings $ $ $ $ $ $ Pre-tax operating earnings, adjusted for noncontrolling interest $ $ $ $ $ $ Pre-tax return on operating revenues less pass-through commissions 36.7% 35.1% 34.2% 33.1% 33.8% 33.4% Principal International Combined net revenue (at PFG share) * $ $ $ $ $ $ Year over year combined net revenue growth (at PFG share) 3.1% 1.4% -6.0% -7.2% -6.4% 15.8% Pre-tax operating earnings $ $ $ $ $ $ Combined pre-tax return on net revenue (at PFG share) 36.4% 36.7% 33.7% 34.0% 35.3% 43.0% Specialty Benefits Insurance Premium and fees $ 1,862.3 $ 1,822.4 $ 1,782.7 $ 1,746.7 $ 1,732.6 $ 1,591.4 Year over year premium and fees growth 7.5% 7.2% 6.4% 6.4% 8.9% 6.6% Pre-tax operating earnings $ $ $ $ $ $ Pre-tax return on premium and fees 13.5% 12.9% 12.8% 12.1% 12.7% 11.3% Individual Life Insurance Premium and fees $ $ $ $ $ $ Year over year premium and fees growth 3.1% 2.6% 2.8% 2.6% 3.2% 3.2% Pre-tax operating earnings $ $ $ $ $ $ Pre-tax return on premium and fees 11.1% 10.7% 22.0% 22.2% 21.6% 17.6% * This is a non-gaap financial measure. See non-gaap financial measure reconciliations on pages ^ Operating revenues less pass-through commissions is a non-gaap financial measure the company has determined is more representative of underlying operating revenues growth for PGI. Definitions: Net revenue: operating revenues less benefits, claims and settlement expenses less dividends to policyholders. See page 7 for additional detail. Pre-tax operating earnings: operating earnings before income taxes and preferred stock dividends and after noncontrolling interest. Pre-tax return on net revenue: pre-tax operating earnings divided by net revenue. Pre-tax operating earnings, adjusted for noncontrolling interest: operating revenues less total expenses. See page 8 for additional detail. 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. Combined basis: all Principal International companies at 100%. 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. Premium and fees: premiums and other considerations plus fees and other revenues. See pages 9-10 for additional detail. Pre-tax return on premium and fees: pre-tax operating earnings divided by premium and fees. 3

6 Income Statement Time Series - Fee, Spread and Risk Businesses (in millions) Principal Financial Group, Inc. -- Fee Line Item Net revenue * $ $ $ $ $ $ 3,576.2 $ 3,572.6 Pre-tax operating earnings * $ $ $ $ $ $ 1,225.3 $ 1,153.3 Pre-tax return on net revenue 34.1% 36.6% 34.7% 31.5% 32.5% 34.3% 32.3% Operating earnings (losses) * $ $ $ $ $ $ $ Principal Financial Group, Inc. -- Spread ~ Line Item Net revenue $ $ $ $ $ $ $ Pre-tax operating earnings $ 87.5 $ 76.0 $ 70.2 $ 67.4 $ 62.1 $ $ Pre-tax return on net revenue 65.7% 62.3% 57.7% 58.8% 57.3% 61.3% 56.4% Operating earnings (losses) $ 60.8 $ 53.2 $ 49.3 $ 47.2 $ 43.3 $ $ Principal Financial Group, Inc. -- Risk ^ Line Item Premium and fees $ $ $ $ $ $ 2,858.2 $ 2,698.5 Pre-tax operating earnings $ $ 70.2 $ $ 80.5 $ 86.6 $ $ Pre-tax return on premium and fees 14.7% 9.9% 14.5% 11.4% 12.8% 12.6% 15.9% Operating earnings (losses) $ 71.0 $ 47.5 $ 69.1 $ 54.8 $ 58.0 $ $ Principal Financial Group, Inc. -- Percent of Operating Earnings (Losses) (excluding Corporate) Fee 67% 72% 68% 68% 70% 69% 67% Spread 15% 15% 13% 15% 13% 15% 12% Risk 18% 13% 19% 17% 17% 17% 20% * This is a non-gaap financial measure. See non-gaap financial measure reconciliations on pages Fee includes RIS - Fee, Principal Global Investors and Principal International. ~ Spread includes RIS - Spread. ^ Risk includes U.S. Insurance Solutions. 4

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8 Consolidated Segment Income Statement Time Series (in millions) Principal Financial Group, Inc. Line Item Premiums and other considerations $ 1,738.0 $ 1,002.7 $ 1,276.0 $ 1,282.4 $ 1,154.4 $ 5,299.1 $ 5,310.2 Fees and other revenues , ,594.1 Net investment income , ,216.8 Total operating revenues * 3, , , , , , ,121.1 Benefits, claims and settlement expenses 2, , , , , , ,682.8 Dividends to policyholders Commission expense Capitalization of DAC (108.7) (92.1) (98.3) (103.2) (100.9) (402.3) (390.3) Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other , ,628.7 Total expenses * 3, , , , , , ,475.8 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) * , ,637.1 Income taxes * Preferred stock dividends Excess of redemption value over carrying value of preferred shares redeemed Operating earnings (losses) * , ,270.5 Net realized capital gains (losses) * (2.0) (27.5) (14.8) 81.7 (47.6) 37.4 (133.8) Other after-tax adjustments * (52.0) (2.0) (52.0) 72.6 Net income (loss) available to common stockholders $ $ $ $ $ $ 1,316.5 $ 1,209.3 Retirement and Income Solutions Segment Line Item Premiums and other considerations $ 1,112.7 $ $ $ $ $ 2,860.9 $ 3,011.4 Fees and other revenues , ,338.8 Net investment income , ,816.7 Total operating revenues 1, , , , , , ,166.9 Benefits, claims and settlement expenses 1, , ,155.5 Dividends to policyholders Commission expense Capitalization of DAC (30.6) (24.2) (28.6) (38.0) (33.0) (121.4) (120.3) Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses 1, , , , , , ,426.8 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ $ $ $ $ $ $ * This is a non-gaap financial measure. See non-gaap financial measure reconciliations on pages

9 Consolidated Segment Income Statement Time Series (in millions) Retirement and Income Solutions Segment -- Fee Line Item Premiums and other considerations $ 0.3 $ - $ - $ - $ - $ 0.3 $ - Fees and other revenues , ,319.6 Net investment income Total operating revenues , ,774.0 Benefits, claims and settlement expenses Dividends to policyholders Commission expense Capitalization of DAC (19.7) (19.3) (18.6) (24.0) (21.9) (81.6) (92.1) Amortization of DAC 23.7 (2.2) Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses , ,280.5 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ $ $ $ $ $ $ Retirement and Income Solutions Segment -- Spread Line Item Premiums and other considerations $ 1,112.4 $ $ $ $ $ 2,860.6 $ 3,011.4 Fees and other revenues Net investment income , ,362.3 Total operating revenues 1, , , , ,392.9 Benefits, claims and settlement expenses 1, , ,955.3 Dividends to policyholders Commission expense Capitalization of DAC (10.9) (4.9) (10.0) (14.0) (11.1) (39.8) (28.2) Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses 1, , ,146.3 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ 87.5 $ 76.0 $ 70.2 $ 67.4 $ 62.1 $ $

10 Consolidated Segment Income Statement Time Series (in millions) Principal Global Investors Segment Line Item Premiums and other considerations $ - $ - $ - $ - $ - $ - $ - Fees and other revenues , ,335.4 Net investment income (1.6) Total operating revenues , ,343.5 Benefits, claims and settlement expenses Dividends to policyholders Commission expense Capitalization of DAC Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ $ $ $ 79.7 $ $ $ Principal International Segment Line Item Premiums and other considerations $ 75.7 $ 68.2 $ 74.1 $ 56.6 $ 61.5 $ $ Fees and other revenues Net investment income Total operating revenues , ,220.6 Benefits, claims and settlement expenses Dividends to policyholders Commission expense Capitalization of DAC (6.0) (5.9) (6.6) (6.1) (8.0) (24.6) (33.8) Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses Pre-tax operating earnings (losses) attributable to noncontrolling interest (3.3) Pre-tax operating earnings (losses) $ 66.0 $ 84.2 $ 69.9 $ 68.0 $ 67.3 $ $

11 Consolidated Segment Income Statement Time Series (in millions) U.S. Insurance Solutions Segment Line Item Premiums and other considerations $ $ $ $ $ $ 2,163.6 $ 2,045.9 Fees and other revenues Net investment income Total operating revenues , ,440.6 Benefits, claims and settlement expenses , ,964.1 Dividends to policyholders Commission expense Capitalization of DAC (72.1) (62.0) (63.1) (59.1) (59.9) (256.3) (236.2) Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses , ,011.1 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ $ 70.2 $ $ 80.5 $ 86.6 $ $ U.S. Insurance Solutions Segment -- Specialty Benefits Insurance Line Item Premiums and other considerations $ $ $ $ $ $ 1,826.3 $ 1,697.6 Fees and other revenues Net investment income Total operating revenues , ,868.1 Benefits, claims and settlement expenses , ,078.4 Dividends to policyholders Commission expense Capitalization of DAC (18.6) (20.2) (18.2) (15.7) (16.8) (72.7) (66.7) Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses , ,647.7 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ 71.9 $ 73.9 $ 66.5 $ 38.6 $ 56.8 $ $

12 Consolidated Segment Income Statement Time Series (in millions) U.S. Insurance Solutions Segment -- Individual Life Insurance Line Item Premiums and other considerations $ 79.5 $ 83.5 $ 84.1 $ 90.2 $ 80.1 $ $ Fees and other revenues Net investment income Total operating revenues , ,572.7 Benefits, claims and settlement expenses , Dividends to policyholders Commission expense Capitalization of DAC (53.5) (41.8) (44.9) (43.4) (43.1) (183.6) (169.5) Amortization of DAC 20.1 (6.2) Depreciation and amortization Interest expense on corporate debt Compensation and other Total expenses , ,363.6 Pre-tax operating earnings (losses) attributable to noncontrolling interest Pre-tax operating earnings (losses) $ 35.0 $ (3.7) $ 37.1 $ 41.9 $ 29.8 $ $ Corporate Segment Line Item Premiums and other considerations $ - $ - $ - $ - $ - $ - $ - Fees and other revenues (41.5) (37.0) (33.8) (37.8) (32.9) (150.1) (134.5) Net investment income Total operating revenues 5.3 (21.0) (17.5) (13.1) (18.3) (46.3) (50.5) Benefits, claims and settlement expenses (2.3) (2.2) (2.4) 5.8 (2.7) (1.1) (1.8) Dividends to policyholders Commission expense Capitalization of DAC Amortization of DAC Depreciation and amortization Interest expense on corporate debt Compensation and other (15.0) (13.9) (14.0) (19.8) (10.8) (62.7) (50.9) Total expenses Pre-tax operating earnings (losses) attributable to noncontrolling interest (0.1) Pre-tax operating earnings (losses) $ (53.3) $ (57.8) $ (54.5) $ (53.3) $ (54.8) $ (218.9) $ (192.3) 10

13 Redeemable noncontrolling interest Stockholders' Equity Preferred stock, at par Common stock, at par Paid-in capital - preferred stock Paid-in capital - common stock 9, , , , , , , , , ,375.0 Retained earnings 7, , , , , , , , , ,945.2 Treasury stock (6,508.6) (6,476.5) (6,441.0) (6,336.9) (6,231.3) (6,118.9) (6,006.3) (6,006.1) (5,930.7) (5,930.5) Accumulated other comprehensive income: Net unrealized gains (losses) on AFS securities , , , , , ,088.4 Net foreign currency translation adjustment (1,093.8) (1,035.1) (1,019.5) (1,031.3) (1,148.2) (1,116.4) (867.1) (819.6) (686.8) (563.1) Net unrecognized postretirement benefit obligations (408.4) (426.2) (434.2) (442.2) (450.2) (375.2) (387.1) (399.1) (411.1) (145.2) Total stockholders' equity attributable to PFG 10, , , , , , , , , ,316.4 Noncontrolling interest Total stockholders' equity 10, , , , , , , , , ,369.0 Total liabilities and stockholders' equity $ 228,014.3 $ 230,367.6 $ 223,074.2 $ 217,570.0 $ 218,660.3 $ 215,365.4 $ 222,270.7 $ 222,494.9 $ 219,087.0 $ 216,422.8 Principal Financial Group, Inc. Consolidated Balance Sheet (in millions) $ $ $ Line Item 31-Dec Sep Jun Mar Dec Sep Jun Mar Dec Sep-14 Assets Fixed maturities, available-for-sale $ 54,846.1 $ 56,162.3 $ 55,281.3 $ 53,045.4 $ 49,966.5 $ 49,780.6 $ 48,949.7 $ 49,755.7 $ 49, ,627.5 Fixed maturities, trading Equity securities, available-for-sale Equity securities, trading 1, , , , , Mortgage loans 13, , , , , , , , , ,744.9 Real estate 1, , , , , , , , , ,352.1 Policy loans Other investments 3, , , , , , , , , ,990.9 Total investments 75, , , , , , , , , ,094.9 Cash and cash equivalents 2, , , , , , , , , ,270.8 Accrued investment income Deferred acquisition costs 3, , , , , , , , , ,985.4 Property and equipment Goodwill 1, , , , , , , ,034.4 Other intangibles 1, , , , , , , , , ,361.4 Premiums due and other receivables 1, , , , , , , , , ,189.3 Separate account assets 139, , , , , , , , , ,296.7 Other assets 1, , , , , , , , , ,054.7 Total assets $ 228,014.3 $ 230,367.6 $ 223,074.2 $ 217,570.0 $ 218,660.3 $ 215,365.4 $ 222,270.7 $ 222, , ,422.8 Liabilities Contractholder funds $ 37,953.6 $ 37,688.0 $ 37,781.0 $ 36,660.5 $ 35,716.1 $ 35,115.2 $ 34,041.8 $ 34,173.8 $ 34, ,680.8 Future policy benefits and claims 29, , , , , , , , , ,399.5 Other policyholder funds Short-term debt Long-term debt 3, , , , , , , , , ,529.2 Income taxes currently payable Deferred income taxes , , , , ,150.6 Separate account liabilities 139, , , , , , , , , ,296.7 Other liabilities 5, , , , , , , , , ,984.6 Total liabilities 217, , , , , , , , , ,

14 Assets Under Management (AUM) Rollforward Detail by Asset Manager (in billions) Principal Global Investors AUM, beginning of period $ $ $ $ $ $ $ Deposits Withdrawals (19.3) (15.4) (14.4) (19.1) (17.1) (68.2) (61.2) Net cash flow (1.6) Investment performance (3.4) Other (1.6) 0.2 (0.4) (0.6) 1.2 Operations acquired Effect of exchange rates (0.2) (0.1) (0.3) (0.4) (1.1) AUM, end of period $ $ $ $ $ $ $ Principal International and Other Entities of PFG AUM, beginning of period $ $ $ $ $ $ $ Deposits Withdrawals (7.7) (6.9) (6.3) (8.3) (7.7) (29.2) (33.9) Net cash flow Investment performance Other - (0.7) 0.1 (0.5) 0.1 (1.1) (0.5) Operations acquired Effect of exchange rates (2.4) (1.3) (0.4) 9.1 (27.1) AUM, end of period $ $ $ $ $ $ $ Third Party Asset Managers AUM, beginning of period $ 57.5 $ 54.1 $ 53.6 $ 51.1 $ 50.7 $ 51.1 $ 50.5 Deposits Withdrawals (2.2) (1.4) (2.9) (1.7) (2.7) (8.2) (8.2) Net cash flow (0.7) 2.1 (1.0) 2.1 (0.9) Investment performance (0.5) Other (0.4) Operations acquired Effect of exchange rates AUM, end of period $ 59.0 $ 57.5 $ 54.1 $ 53.6 $ 51.1 $ 59.0 $ 51.1 Total AUM, beginning of period $ $ $ $ $ $ $ Deposits Withdrawals (29.2) (23.7) (23.6) (29.1) (27.5) (105.6) (103.3) Net cash flow Investment performance (1.8) Other (0.7) Operations acquired Effect of exchange rates (2.6) (1.4) (0.3) 8.7 (28.1) AUM, end of period $ $ $ $ $ $ $

15 Principal Global Investors - Assets Under Management (AUM) Rollforward Detail by Asset Class (in billions) Equity Investments AUM, beginning of period ~ $ $ $ $ $ $ $ Deposits Withdrawals (7.7) (6.9) (5.4) (5.8) (6.5) (25.8) (23.3) Net cash flow (1.6) (0.4) Investment performance (1.9) Other (0.8) 0.5 (2.4) (0.9) 0.3 (3.6) (0.4) Operations acquired Effect of exchange rates (0.1) (0.1) (0.2) - (0.2) (0.4) (0.4) AUM, end of period ~ General account and balance sheet assets Total Equity Investments $ $ $ $ $ $ $ Fixed Income Investments AUM, beginning of period ~ $ $ $ $ $ $ $ Deposits Withdrawals (8.1) (6.0) (5.0) (5.4) (6.5) (24.5) (23.1) Net cash flow (1.8) Investment performance (3.6) Other 0.1 (0.1) Operations acquired Effect of exchange rates AUM, end of period ~ General account and balance sheet assets Total Fixed Income Investments $ $ $ $ $ $ $ Alternative Investments AUM, beginning of period ~ $ 40.6 $ 39.0 $ 37.5 $ 40.0 $ 41.8 $ 40.0 $ 38.3 Deposits Withdrawals (0.8) (0.7) (1.6) (4.3) (1.8) (7.4) (6.3) Net cash flow (0.5) (3.6) (0.7) (2.5) (0.2) Investment performance Other (1.6) Operations acquired Effect of exchange rates (0.2) 0.1 (0.1) (0.6) AUM, end of period ~ General account and balance sheet assets Total Alternative Investments $ 59.1 $ 58.0 $ 56.2 $ 54.1 $ 56.3 $ 59.1 $ 56.3 Other AUM, beginning of period ~ $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.2 Deposits Withdrawals (0.1) (0.1) - Net cash flow (0.1) Investment performance Other 0.1 (0.1) - - (0.1) - (0.1) Operations acquired Effect of exchange rates AUM, end of period ~ General account and balance sheet assets Total Other $ 4.0 $ 4.7 $ 4.8 $ 4.4 $ 3.7 $ 4.0 $ 3.7 Total AUM, beginning of period ~ $ $ $ $ $ $ $ Deposits Withdrawals (16.7) (13.6) (12.0) (15.5) (14.8) (57.8) (52.7) Net cash flow (2.7) (0.6) (0.3) Investment performance (2.1) Other (0.5) Operations acquired Effect of exchange rates (0.3) - (0.3) (0.4) (1.0) AUM, end of period ~ General account and balance sheet assets Total Principal Global Investors AUM $ $ $ $ $ $ $ ~ Excludes general account and balance sheet assets. 13

16 Principal Global Investors - Assets Under Management Detail (in billions) Principal Global Investors Assets Under Management by Boutique and Asset Class Principal Global Investors AUM by Boutique Aligned Investors $ 18.5 $ 18.0 $ 16.8 $ 16.5 $ 16.5 $ 18.5 $ 16.5 Columbus Circle Investors Edge Asset Management Finisterre Capital Macro Currency Group Morley Financial Services Origin Asset Management Post Advisory Group Principal Global Equities Principal Global Fixed Income Principal Real Estate - CMBS Principal Real Estate - Private Real Estate Principal Real Estate - REITs Spectrum Asset Management Other Sub-Advised Other Total Principal Global Investors AUM $ $ $ $ $ $ $ Principal Global Investors AUM by Asset Class Equity Investments: Global Equity $ 34.3 $ 34.3 $ 32.4 $ 31.6 $ 30.9 $ 34.3 $ 30.9 U.S. Equity REITS Total Equity Investments Fixed Income Investments: CMBS Other Fixed Income Total Fixed Income Investments Alternative Investments: Private Real Estate Other Alternatives Total Alternative Investments Other Total Principal Global Investors AUM $ $ $ $ $ $ $ Principal Global Investors Institutional~ AUM AUM, beginning of period $ $ $ $ $ $ $ Deposits Withdrawals (6.5) (5.9) (4.3) (7.3) (5.5) (24.0) (21.3) Net cash flow (1.2) (1.5) Investment performance (3.0) Other (0.2) (0.5) Operations acquired Effect of exchange rates (0.2) - (0.3) (0.4) (0.7) AUM, end of period $ $ $ $ $ $ $ Principal Global Investors - Mutual Funds Complex ^ Retail $ 79.5 $ 80.2 $ 76.4 $ 74.6 $ 73.9 $ 79.5 $ 73.9 Retirement Other Total $ $ $ $ $ $ $ ~ Includes Principal Global Investors Undertakings for the Collective Investment of Transferable Securities (UCITS) funds, Principal Global Opportunity Series funds, Australian funds, collective investment trusts, business trusts, real estate funds, stable value funds, hedge funds, and other funds. ^ Retail and Other AUM generates earnings for Principal Funds, while Retirement AUM generates earnings for RIS - Fee. 14

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18 Principal International - Assets Under Management Rollforward Detail by Country (in USD billions) Brazil AUM, beginning of period $ 58.8 $ 56.0 $ 46.1 $ 38.8 $ 36.2 $ 38.8 $ 44.6 Deposits Withdrawals (1.8) (1.7) (1.4) (1.2) (1.3) (6.1) (5.2) Net cash flow Investment performance Other (0.1) (0.1) - - (0.1) (0.2) (0.4) Operations acquired Effect of exchange rates (0.1) (0.7) (16.5) AUM, end of period $ 63.1 $ 58.8 $ 56.0 $ 46.1 $ 38.8 $ 63.1 $ 38.8 Chile AUM, beginning of period $ 43.2 $ 41.5 $ 40.7 $ 38.2 $ 37.8 $ 38.2 $ 40.7 Deposits Withdrawals (2.1) (1.6) (1.3) (1.1) (1.1) (6.1) (4.3) Net cash flow (0.7) (0.2) (0.7) 1.3 Investment performance (0.1) Other - (0.1) 0.1 (0.1) (0.2) (0.1) (0.1) Operations acquired Effect of exchange rates (0.7) (0.6) 2.1 (6.2) AUM, end of period $ 41.7 $ 43.2 $ 41.5 $ 40.7 $ 38.2 $ 41.7 $ 38.2 Chile Cuprum AFP customer funds balance (included in Chile AUM) $ 35.1 $ 36.5 $ 35.1 $ 34.6 $ 32.6 $ 35.1 $ 32.6 Mexico AUM, beginning of period $ 9.5 $ 10.3 $ 10.8 $ 10.4 $ 10.5 $ 10.4 $ 11.9 Deposits Withdrawals (1.0) (1.0) (1.2) (0.8) (1.1) (4.0) (4.8) Net cash flow - (0.2) (0.1) (0.1) (0.1) Investment performance (0.2) Other (0.1) (0.3) - (0.1) - (0.5) (0.1) Operations acquired Effect of exchange rates (0.5) (0.5) (0.7) 0.1 (0.1) (1.6) (1.7) AUM, end of period $ 8.7 $ 9.5 $ 10.3 $ 10.8 $ 10.4 $ 8.7 $ 10.4 Mexico AFORE customer funds balance (included in Mexico AUM) $ 7.2 $ 7.9 $ 8.4 $ 8.9 $ 8.6 $ 7.2 $ 8.6 Total Latin America AUM, beginning of period $ $ $ 97.6 $ 87.4 $ 84.5 $ 87.4 $ 97.2 Deposits Withdrawals (4.9) (4.3) (3.9) (3.1) (3.5) (16.2) (14.3) Net cash flow Investment performance Other (0.2) (0.5) 0.1 (0.2) (0.3) (0.8) (0.6) Operations acquired Effect of exchange rates (1.3) (1.0) (0.6) 9.7 (24.4) AUM, end of period $ $ $ $ 97.6 $ 87.4 $ $ 87.4 Hong Kong AUM, beginning of period $ 7.8 $ 7.4 $ 7.2 $ 7.2 $ 7.1 $ 7.2 $ 3.8 Deposits Withdrawals (0.2) (0.3) (0.2) (0.2) (0.2) (0.9) (0.7) Net cash flow Investment performance (0.3) (0.1) (0.1) Other (0.1) Operations acquired Effect of exchange rates AUM, end of period $ 7.6 $ 7.8 $ 7.4 $ 7.2 $ 7.2 $ 7.6 $ 7.2 India AUM, beginning of period $ 0.8 $ 0.7 $ 0.6 $ 0.7 $ 0.7 $ 0.7 $ 0.8 Deposits Withdrawals (1.1) (0.9) (0.9) (3.3) (2.5) (6.2) (12.4) Net cash flow (0.1) - - (0.1) Investment performance (0.1) Other Operations acquired Effect of exchange rates (0.1) - (0.1) AUM, end of period $ 0.7 $ 0.8 $ 0.7 $ 0.6 $ 0.7 $ 0.7 $

19 Principal International - Assets Under Management Rollforward Detail by Country (in USD billions) Southeast Asia AUM, beginning of period $ 16.2 $ 15.0 $ 15.6 $ 14.6 $ 13.9 $ 14.6 $ 12.8 Deposits Withdrawals (1.2) (1.3) (1.1) (1.3) (1.2) (4.9) (5.2) Net cash flow (0.3) Investment performance Other - - (0.1) (0.1) 2.1 Operations acquired (0.1) Effect of exchange rates (1.1) (0.3) (0.5) (0.6) (2.8) AUM, end of period $ 15.3 $ 16.2 $ 15.0 $ 15.6 $ 14.6 $ 15.3 $ 14.6 Total Asia AUM, beginning of period $ 24.8 $ 23.1 $ 23.4 $ 22.5 $ 21.7 $ 22.5 $ 17.4 Deposits Withdrawals (2.5) (2.5) (2.2) (4.8) (3.9) (12.0) (18.3) Net cash flow (0.3) Investment performance (0.3) (0.1) Other - - (0.1) (0.1) 2.2 Operations acquired Effect of exchange rates (1.1) (0.3) (0.5) (0.6) (2.9) AUM, end of period $ 23.6 $ 24.8 $ 23.1 $ 23.4 $ 22.5 $ 23.6 $ 22.5 Principal International AUM, beginning of period $ $ $ $ $ $ $ Deposits Withdrawals (7.4) (6.8) (6.1) (7.9) (7.4) (28.2) (32.6) Net cash flow Investment performance Other (0.2) (0.5) - (0.2) (0.2) (0.9) 1.6 Operations acquired Effect of exchange rates (2.4) (1.3) (0.4) 9.1 (27.3) AUM, end of period Add: China ^ Combined AUM ~ $ $ $ $ $ $ $ China AUM, beginning of period $ $ $ 56.5 $ 41.8 $ 41.5 $ 41.8 $ 19.1 Deposits Withdrawals (70.2) (37.8) (42.6) (51.0) (31.9) (201.6) (131.0) Net cash flow (23.1) (0.3) Investment performance (0.9) Other Operations acquired Effect of exchange rates (3.5) (1.6) (0.8) (1.3) (0.2) (7.2) (1.5) AUM, end of period $ $ $ $ 56.5 $ 41.8 $ $ 41.8 Represents assets under management by source. ^ Includes CCB Principal Asset Management Company, LTDA AUM not included in Principal International reported AUM since Principal Financial Group's ownership in this joint venture is 25%. ~ Combined AUM includes 100% of the AUM from unconsolidated and consolidated subsidiaries. Unconsolidated subsidiaries consist of a 25% economic interest in Brasilprev Seguros e Previdencia S.A. (with 50.01% ownership of common stock), a 40% interest in CIMB- Principal Asset Management Berhad in Malaysia with a presence in Southeast Asian countries, and a 25% interest in CCB Principal Asset Management Company, Ltd. in China. 17

20 Retirement and Income Solutions - Account Values (in billions) Account Value Rollforwards Fee Account Values, beginning of period $ $ $ $ $ $ $ Transfer deposits Recurring deposits Deposits Withdrawals (8.0) (5.8) (7.2) (6.2) (8.3) (27.2) (27.3) Net cash flow (0.2) (1.6) Credited investment performance Other (0.2) (0.2) (0.2) (0.1) (0.2) (0.7) (0.7) Operations acquired Effect of exchange rates Account Values, end of period $ $ $ $ $ $ $ Spread Account Values, beginning of period $ 36.4 $ 36.2 $ 34.7 $ 33.3 $ 32.3 $ 33.3 $ 31.1 Deposits Withdrawals (1.4) (0.8) (1.5) (2.6) (1.1) (6.3) (4.8) Net cash flow 1.0 (0.1) Credited investment performance Other (0.1) - (0.1) Operations acquired Effect of exchange rates - - (0.1) (0.1) Account Values, end of period $ 37.6 $ 36.4 $ 36.2 $ 34.7 $ 33.3 $ 37.6 $ 33.3 Total Retirement and Income Solutions Account Values, beginning of period $ $ $ $ $ $ $ Deposits Withdrawals (9.4) (6.6) (8.7) (8.8) (9.4) (33.5) (32.1) Net cash flow (0.7) Credited investment performance Other (0.2) (0.2) (0.2) (0.1) (0.3) (0.7) (0.8) Operations acquired Effect of exchange rates - - (0.1) (0.1) Account Values, end of period $ $ $ $ $ $ $ Account Value Detail Fee General Account $ 10.7 $ 10.6 $ 10.5 $ 10.5 $ 10.4 $ 10.7 $ 10.4 Separate Account ^ Proprietary Funds ~ Non-Proprietary Funds Employer Securities Individual Variable Annuities Total Fee Spread Total Account Value $ $ $ $ $ $ $ Includes guaranteed separate accounts. ^ Excludes proprietary mutual funds wrapped in a separate account. ~ Includes mutual fund, collective investment trust and stable value account value. 18

21 Retirement and Income Solutions - Defined Contribution and Defined Benefit Detail by Employer Size (in billions, except number of plans data) Number of Plans ^ Defined Contribution < 100 employees 30,041 29,958 29,818 29,715 29,361 30,041 29, employees 4,548 4,486 4,455 4,449 4,326 4,548 4, employees employees Total 35,956 35,797 35,618 35,492 34,989 35,956 34,989 Defined Benefit 2,142 2,175 2,192 2,200 2,220 2,142 2,220 Total 38,098 37,972 37,810 37,692 37,209 38,098 37,209 Average Number of Employees per Plan Account Values ^ Account Values Defined Contribution < 100 employees $ 37.1 $ 36.9 $ 35.5 $ 34.8 $ 34.8 $ 37.1 $ employees employees employees Total Defined Benefit Total $ $ $ $ $ $ $ ^ Excludes individual variable annuities. 19

22 Principal International - Financial Highlights by Country (in USD millions, except as indicated) Pre-Tax Operating Earnings (Losses) Brazil $ 37.0 $ 38.6 $ 31.4 $ 27.2 $ 27.0 $ $ Chile Mexico Latin America China Hong Kong India (0.6) (0.3) (0.8) (1.3) (1.3) (3.0) (5.8) Southeast Asia Asia Principal International Corporate (19.6) (16.6) (18.9) (17.1) (18.7) (72.2) (70.2) Total pre-tax operating earnings $ 66.0 $ 84.2 $ 69.9 $ 68.0 $ 67.3 $ $ Combined Net Revenue (at PFG share) * Brazil $ 50.9 $ 52.4 $ 42.8 $ 37.0 $ 37.8 $ $ Chile Mexico Latin America eliminations (0.4) Latin America China Hong Kong India Southeast Asia Asia Principal International Corporate (0.2) (0.2) (0.3) (0.1) (0.2) (0.8) (0.5) Total combined net revenue (at PFG share) $ $ $ $ $ $ $ Combined Pre-Tax Return on Net Revenue (at PFG share) Brazil 72.7% 73.7% 73.4% 73.5% 71.4% 73.3% 61.6% Chile 37.8% 52.1% 49.6% 50.3% 46.5% 47.7% 51.8% Mexico 25.8% 10.8% 34.9% 38.3% 41.6% 28.8% 39.8% Latin America 48.4% 53.7% 54.0% 54.1% 52.0% 52.6% 52.0% China 50.9% 50.9% 46.3% 58.8% 40.9% 51.7% 41.2% Hong Kong 18.8% 13.7% 13.3% 15.8% 22.3% 15.3% 17.2% India -42.9% -21.4% -61.5% % % -57.7% % Southeast Asia 25.0% 24.8% 24.6% 7.7% 14.5% 20.8% 16.5% Asia 30.8% 28.8% 25.4% 26.7% 23.0% 28.0% 20.2% Principal International Corporate NM NM NM NM NM NM NM Principal International 33.4% 39.1% 36.1% 36.8% 34.5% 36.4% 35.3% * This is a non-gaap financial measure. See non-gaap financial measure reconciliations on pages

23 Principal International - Exchange Rates Average Currency Exchange Rates ~ Brazil (Brazilian Real) Chile (Chilean Peso) Mexico (Mexican Peso) China (Chinese Yuan) ^ Hong Kong (Hong Kong Dollar) India (Indian Rupee) Southeast Asia (Malaysian Ringgit) Spot Currency Exchange Rates ~ Brazil (Brazilian Real) Chile (Chilean Peso) Mexico (Mexican Peso) China (Chinese Yuan) ^ Hong Kong (Hong Kong Dollar) India (Indian Rupee) Southeast Asia (Malaysian Ringgit) ~ Principal International financial results are impacted by fluctuations of the foreign currency to U.S. dollar exchange rates for the countries in which we have operations. Ending AUM of our foreign businesses is translated into U.S. dollar equivalents using spot currency exchange rates in effect on the last day of the reporting period. Pre-tax operating earnings, net revenue, net cash flow, and investment performance for our foreign businesses are translated into U.S. dollar equivalents using the average currency exchange rates for the reporting period. The average currency exchange rates represent monthly averages. ^ The exchange rates for China are on a one-month lag for all periods. 21