Principal Financial Group 2011 Annual Report Download - page 7

The company’s fee-based business model generates
increasing amounts of free cash flow, which allows
us to invest in our businesses and increase value for
shareholders. The Principal started and ended the year
with $1.6 billion of excess capital, while deploying
more than $1.1 billion of capital throughout 2011,
including:
n $550 million on opportunistic share repurchase
n $214 million on a common stock dividend
n $350 million on strategic acquisitions
In 2011 we announced and closed on three strategic
acquisitions that were well aligned with our global
investment management strategy:
n Principal Global Investors acquired a majority
stake in Finisterre Capital and Origin Asset
Management, which are asset management
firms based in London with an emphasis on
emerging and global developed markets, areas
of strong demand from institutional investors.
n Principal International acquired the HSBC
AFORE. This acquisition adds scale to our
mandatory defined contribution operations in
Mexico and makes The Principal the seventh
largest AFORE in Mexico. It also gives us an
exclusive five-year distribution agreement
with HSBC-Mexico, which boasts Mexico’s
fourth largest distribution platform.
THE POWER OF THE NEXT 10 YEARS
Rapid change is inevitable over the next 10 years.
The Principal is ready. We’ll continue to:
n Grow as a global investment management leader
n Shift to a more fee-based business model,
generating increasing amounts of excess capital for
strategic acquisitions or return to shareholders
n Become a more globally diversified company
And we’ll continue to work hard to help growing
businesses and individuals in the United States and
around the world reach their financial dreams.
The 10 years since The Principal went public
have been sometimes challenging but always exciting.
But there is no doubt our best times are ahead of us,
and I can’t wait to see what’s in store.
We have the right strategy.
We’re in the right markets.
We actively and effectively manage risk.
And we have talented, focused employees.
As we mark this important anniversary, I would
like to thank our employees for their dedication over
the years. And on behalf of the board of directors, I’d
like to thank you, our shareholders, for your continued
support and your confidence in us going forward.
Please be sure to cast your vote in time for the Annual
Meeting of Shareholders on May 22, 2012.
Larry Zimpleman
Chairman, President and
Chief Executive Officer
PRINCIPAL FINANCIAL GROUP | 2011 year in review | 5
TRENDS WE’VE SEEN coming for a long
time and have built our strategy around have
firmly taken hold. Those trends, 10 of them,
are outlined in the following pages.