3 q14 earnings-call-presentation

Principal Financial Group®
Third Quarter 2014 Earnings Call
October 24, 2014

Use of Non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of performance, financial position, or cash flows that
includes adjustments from a comparable financial measure presented in accordance with U.S. GAAP.
The company uses a number of non-GAAP financial measures that management believes are useful to investors
because they illustrate the performance of the company’s normal, ongoing operations which is important in
understanding and evaluating the company’s financial condition and results of operations. While such measures
are also consistent with measures utilized by investors to evaluate performance, they are not, however, a
substitute for U.S. GAAP financial measures. Therefore, in our quarterly earnings release, the company has
provided reconciliations of the non-GAAP financial measures to the most directly comparable U.S. GAAP
financial measure. The company adjusts U.S. GAAP financial 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 financial 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.
The company also uses 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.
2 Posted on PFG website: 10/24/2014

Forward Looking Statements
3
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, 2013 and in the company’s quarterly report on Form 10-Q for quarter ended June 30, 2014, filed by the
company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent
filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions may
significantly affect the company’s ability to meet liquidity needs, access to capital and cost of capital; conditions in the
global capital markets and the economy generally; continued volatility or further declines in the equity, bond or real
estate markets; changes in interest rates or credit spreads; the company’s investment portfolio is subject to several risks
that may diminish the value of its invested assets and the investment returns credited to customers; the company’s
valuation of securities may include methodologies, estimations and assumptions that are subject to differing
interpretations; the determination of the amount of allowances and impairments taken on the company’s investments
requires estimations and assumptions that are subject to differing interpretations; gross unrealized losses may be
realized or result in future impairments; competition from companies that may have greater financial resources, broader
arrays of products, higher ratings and stronger financial performance; a downgrade in the company’s financial strength
or credit ratings; inability to attract and retain sales representatives and develop new distribution sources; international
business risks; the company’s actual experience could differ significantly from its pricing and reserving assumptions; the
company’s ability to pay stockholder dividends and meet its obligations may be constrained by the limitations on
dividends or distributions Iowa insurance laws impose on Principal Life; the pattern of amortizing the company’s DAC
and other actuarial balances on its universal life-type insurance contracts, participating life insurance policies and certain
investment contracts may change; the company may need to fund deficiencies in its “Closed Block” assets that support
participating ordinary life insurance policies that had a dividend scale in force at the time of Principal Life’s 1998
conversion into a stock life insurance company; the company’s reinsurers could default on their obligations or increase
their rates; risks arising from acquisitions of businesses; changes in laws, regulations or accounting standards; a
computer system failure or security breach could disrupt the company’s business, and damage its reputation; results of
litigation and regulatory investigations; from time to time the company may become subject to tax audits, tax litigation or
similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be material;
fluctuations in foreign currency exchange rates; and applicable laws and the company’s certificate of incorporation and
by-laws may discourage takeovers and business combinations that some stockholders might consider in their best
interests.
Posted on PFG website: 10/24/2014

3Q14 Earnings Call Key Themes
Continued Execution, Continued Success
• Total company operating earnings of $354 million were the third straight quarter
of record results
• YTD total company operating earnings up 28% over prior year period
• At least 85% of our investment options are in the top half of the Morningstar
rankings on a 1, 3 and 5-year-basis
• Total company net cash flow of $3.7 billion leading to AUM of $514 billion at
quarter end
• ROE of 14.1%, up 220 basis points from year ago quarter; 145 basis points from
organic growth
• 2014 capital deployment is well above our $500-$700 million range

Strong Investment Performance Continues
Morningstar rankings of Principal mutual funds, separate accounts and CITs
Percentage of funds in the top two quartiles
58%
80%
67%
79%
85% 88% 85% 89% 88%
1-Year 3-Year 5-Year
Sept. 30, 2013
June 30, 2014
Sept. 30, 2014
GOAL:
ABOVE
60%
Represents $159 billion assets under management of which 74% is managed by PGI boutiques
Principal “I” shares; if no “I” share class then “A” share class; separate accounts use “R6” rate level; Includes Principal mutual funds,
separate accounts and collective investment trusts (CITs); Excludes money market, stable value and U.S. Property separate account.

Operating Earnings Normalizing Items
After normalizing, 3Q14 EPS is up 13% compared to a year ago
Per diluted share 3Q13 3Q14
Operating Earnings $0.90 $1.19 +32%
Normalizing items:
Principal International
Actual encaje return compared to expected return* +0.03 -0.04
Individual Life
Actuarial assumption review -0.13
Adverse claims experience +0.03
Total of normalizing items $0.03 ($0.14)
Normalized Operating Earnings $0.93 $1.05 +13%
* Street expectations include the difference in expected returns for encaje.

Retirement and Investor Services
Accumulation
Net Revenue ($m)
581
643
700
600
500
400
300
200
100
0
3Q13 3Q14
• Full Service Accumulation sales of $1.8B,
continue to balance growth & profitability
• Recurring deposits were up 9% over 3Q13
• 19 consecutive quarters of positive net cash flow
On a trailing twelve month basis: in Principal Funds
• Net revenue up 12%
• Pretax return on net revenue of 34%
Operating Earnings
After-tax ($m)
3Q14 $179.7
3Q13 $150.7
Change $29.0 (+19%)

Retirement and Investor Services
Guaranteed
Net Revenue ($m)
40
44
50
45
40
35
30
25
20
15
10
5
0
3Q13 3Q14
On a trailing twelve month basis:
• Net revenue up 15%
Operating Earnings
After-tax ($m)
3Q14 $24.6
3Q13 $22.2
Change $2.4 (+11%)
8
• Investment Only new business at a higher
margin than business rolling off
• Continue to treat Investment Only and Full
Service Payout as opportunistic

Principal Global Investors
Revenue ($m)
161 174
200
180
160
140
120
100
80
60
40
20
0
3Q13 3Q14
• Revenue is up 16%
• Pretax margin of 25%
9
• Total AUM of $307B including unaffiliated
AUM of $114B
• $500M in unaffiliated net cash flow
• Increased ownership in CCI* & partnered
with the Macquarie Group to create
Principal Commercial Capital
Operating Earnings
After-tax ($m)
3Q14 $25.3
3Q13 $23.1
Change $2.2 (+10%)
*CCI - Columbus Circle Investors

Combined* Net Revenue ($m)
327
407
400
300
200
100
0
3Q13 3Q14
• Local organic OE growth is 12% over
3Q13, on a comparable basis***
• Net cash flow of $2.5B due to continued
strength in Brazil
• AUM of $116B is up 13% over 3Q13,
despite an $11B currency headwind
On a trailing twelve month combined basis:
• Net revenue is up 20%
Operating
Earnings
After-tax
($m)
Operating
Earnings
Adjustment
($m)
Adjusted
Operating
Earnings
After-tax ($m)
3Q14 $73.8 ($12.4)** $61.4
3Q13 $50.7 $10.1** $60.8
Change $23.1 (+46%) $0.6 (+1%)
*Combined basis includes all Principal International companies at 100%.
**Actual encaje returns compared to expected returns.
***Adjusted for FX, encaje, and Brasilprev amortization.
10
Principal International

Individual Life
Premium and Fees ($m)
216
235
250
200
150
100
50
0
3Q13 3Q14
• Excluding Universal Life with Secondary
Guarantee, sales up 21% over 3Q13
• Business market remains strong at 55% of
YTD sales
• Premium and fees up 1%
• Pretax operating margin of 19%
Operating
Earnings
After-tax ($m)
Operating
Earnings
Adjustment
($m)
Adjusted
Operating
Earnings
After-tax
($m)
3Q14 $52.2 ($29.0)* $23.2
3Q13 $22.3 -- $22.3
Change $29.9 (+134%) $0.9 (4%)
* Net actuarial assumption review benefit offset by adverse claims experience.

Specialty Benefits
Premium and Fees ($m)
372
405
450
400
350
300
250
200
150
100
50
0
3Q13 3Q14
Operating Earnings
After-tax ($m)
3Q14 $31.1
3Q13 $31.7
Change ($0.6) (-2%)
• Record 3Q sales and strong persistency
• In-plan membership growth (TTM) of 1.5%,
highest level since 2006
• Overall quarterly loss ratio of 64.5% is better
On a trailing twelve month basis: than the targeted range
• Premium and fees up 6%
• Pretax operating margin of 11%
• Loss ratio of 65.6%

Capital Deployment
• More than $855M announced so far in 2014
 $375M in common stock dividends
o Paid 3Q14 dividend of 34-cents per share
o Announced 4Q14 dividend of 34-cents per share
 $200M share repurchase program authorized
o $72M in share repurchases in 3Q14
o $50M remains from current authorization
 Redeemed $100M surplus note in 1Q14
 $180M* for increased ownership in Columbus Circle Investors
• Active M&A pipeline
• Long-term we expect to deploy 65-70 percent of our net income with
volatility in any given year
*With expectation of an additional $40M spend over the next two years.

Looking Ahead
• Upcoming investor events:
 November 21, 2014 – Asset Management update in New York City
 December 8, 2014 – Principal Financial Group 2015 Outlook Call
 March 11, 2015 – Principal International update in Santiago, Chile

3 q14 earnings-call-presentation

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