Principal Financial Group 2008 Annual Report Download

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2008 YEAR IN REVIEW

Table of contents

  • Page 1
    2008 YEAR IN REVIEW

  • Page 2
    ...in the company's annual report on Form 10-K for the year ended Dec. 31, 2008, filed with the Securities and Exchange Commission. These risks and uncertainties include, without limitation: competitive factors; volatility of financial markets; decrease in ratings; interest rate changes; inability to...

  • Page 3
    FOR NEARLY 130 YEARS, strong fundamentals have been key to the success of the Principal Financial Group: Our founder believed in the importance of long-term financial security. He gave us PERSPECTIVE . The Depression highlighted the need to carefully manage risk. That taught us DIVERSIFICATION ...

  • Page 4
    ... that we can meet obligations. n Customer retention and client/adviser satisfaction levels remain high. n For the seventh consecutive year, we were named one of FORTUNE magazine's 100 Best Companies to Work For, ranking #17 on this prestigious list. 20 2 The Principal Financial Group | Letter to...

  • Page 5
    Chairman of the Board Barry Griswell (upper left) and President and CEO Larry Zimpleman (center) remain committed to sharing information and soliciting input from stakeholders such as these employees. 2008 Year in Review | Letter to Shareholders 3

  • Page 6
    ... retirement, annuities, mutual funds and banking products to life, health, dental and disability insurance, wellness programs and executive benefit solutions, we offer more ways for growing businesses to provide financial security for their employees. Our customers clearly appreciate these options...

  • Page 7
    ... have rallied around The Principal and who continue to offer customers education, assistance and a sympathetic ear n Dedicated advisers who are working tirelessly to provide their customers the best guidance in this critical time n Seasoned leaders, including a senior management team that boasts an...

  • Page 8
    ... R O M H AV I N G A N EFFECTIVE PLAN AND MANAGING TO IT, EVEN WHEN TIMES GET TOUGH. A T T H E P R I N C I PA L , OUR LONG- T E R M V I E W R E V O LV E S A R O U N D MEETING THE NEEDS OF GROWING BUSINESSES AND THEIR EMPLOYEES. GIVING THEM AN EDGE. 6 The Principal Financial Group | Perspective

  • Page 9
    ... client base outside the United States. Along with our Malaysian partner, CIMB Group, Principal Global Investors and Principal International offer asset management services to meet the growing global demand for Shariah-compliant investments. Our future success relies on the success of our customers...

  • Page 10
    A smart mix of products and M U LT I P L E OPPORTUNITIES FOR SUCCESS MAKE US MORE RESILIENT I N T H E FA C E O F C H A L L E N G E S . AND O U R C O M P L E M E N TA RY P R O D U C T S A N D S E RV I C E S F U L F I L L NUMEROUS CUSTOMER NEEDS. 8 The Principal Financial Group | Diversification

  • Page 11
    ... in Principal LifeTime portfolios, our target date funds, with more than 70 percent of plan sponsors offering these options, 35 percent as a default. In addition, our five actively managed Strategic Asset Management (SAM) portfolios offer asset allocation solutions for investors with varying risk...

  • Page 12
    ... O I S E A N D U N C E R TA I N T Y . WE TA K E A D E L I B E R AT E A P P R O A C H T O M A N A G I N G OUR BUSINESS, ADAPTING MORE T H A N A C E N T U RY O F E X P E R I E N C E TO MEET THESE NEW CHALLENGES A N D AV O I D D I S T R A C T I O N S . 10 The Principal Financial Group | Discipline

  • Page 13
    ... and training programs have resulted in strong productivity and career agent retention. In Principal Global Investors, despite challenging markets, we met our goal of increasing distribution through major wirehouses. These national wirehouses represented $1.2 billion of separately managed account...

  • Page 14
    ... L E A R E P AY I N G A T T E N T I O N T O T H E I R FINANCIAL PLANS THAN EVER BEFORE. MORE AND MORE INDIVIDUALS ARE REALIZING T H E Y C A N ' T O R D O N ' T WA N T T O G O I T A L O N E . WE'RE M A K I N G S U R E T H E Y D O N ' T H AV E T O . 12 The Principal Financial Group | Commitment

  • Page 15
    ...'re supporting them in numerous ways, including: Making it personal. We continue to provide personalized service in meaningful ways. In 2008, we conducted nearly 77,000 one-on-one meetings at employer worksites-offering workers individualized assistance and information to help them maximize their...

  • Page 16
    ...: n Group medical, including combined high deductible health plans with health savings accounts n Wellness programs n Administrative services Specialty benefits: n Group dental and vision insurance n Group life insurance n Group and individual disability insurance 14 The Principal Financial Group...

  • Page 17
    ... PNB Asset Management Company named Best Mutual Fund House by Outlook Money NDTV Profit Awards 2008. (June 2008) Principal Life Insurance Company is the eighth largest U.S. life insurer based on HIGHLINEDATA 2008. Recognized as the #2 provider of non-medical insurance (dental, life and disability...

  • Page 18
    ... policies to date, VUL Income II provides death benefit protection, a tax-deferred investment and supplemental income all in one place. These components make it well suited for a wide range of business needs from n n Market turbulence has eaten away at pension fund asset values. Recognizing...

  • Page 19
    ...rms that service mid-size and large plan markets. The team focuses on three key areas: corporate, non-profit and Taft-Hartley plans and offers a comprehensive range of solutions including defined contribution, defined benefit, ESOP, nonqualified, investment only and income solutions. Retirement...

  • Page 20
    ...introduced life cycle funds in two important markets-Mexico and Brazil-offering more clients access to this simple, do-it-for-me solution. Our LifeStyle Mutual Funds were the first target risk funds offered in Mexico. SALES AND SERVICE n n n GREATER INVESTMENT CHOICE n n Principal Funds added...

  • Page 21
    ... the challenges of 2008. Included on Working Mother magazine's 100 Best Companies for Working Mothers for the seventh year. The Principal was noted for the addition of The Principal Child Development Center, an on-site early learning and childcare service provider exclusively available to employees...

  • Page 22
    .... 5 Stockholders' equity available to common stockholders excluding accumulated other comprehensive income (loss). 2 1 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 DIVIDENDS PAID ON COMMON STOCK COMMON SHARE PRICE AS OF YEAR END 20 The Principal Financial Group | Financial Highlights

  • Page 23
    ...$8,321 $1,053 $943 $9,936 $826 $901 $827 $747 $836 $943 $425 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 TOTAL REVENUE (in millions) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS (in millions) OPERATING EARNINGS 3,4 (in millions) $3.93 16.3% 14.8% 13.4% 12...

  • Page 24
    ...the summary consolidated statements of income shown above has been prepared in conformity with accounting principles generally accepted in the U.S. ("U.S. GAAP"). It is a replication of the information in the consolidated statements of operations in the Principal Financial Group, Inc.'s 2008 Form 10...

  • Page 25
    ... Contractholder funds Future policy benefits and claims Other policyholder funds Short-term debt Long-term debt Income taxes currently payable Deferred income taxes Separate account liabilities Other liabilities Total liabilities Stockholders' equity Series A preferred stock, par value $.01...

  • Page 26
    ...statements, including notes and management's discussion and analysis of financial condition and results of operations, please refer to the 2008 Form 10-K filed by the company with the Securities and Exchange Commission, which can be found at www.principal.com/10k. 24 The Principal Financial Group...

  • Page 27
    CONSOLIDATED STATEMENTS OF CASH FLOWS PRINCIPAL FINANCIAL GROUP, INC. For the year ended December 31, 2008 Discontinued operations Net cash provided by operating activities Net cash used in investing activities Net cash used in financing activities Net cash provided by (used in) discontinued ...

  • Page 28
    ... Meredith Corporation 7 Sandra L. Helton Past Executive Vice President and Chief Financial Officer Telephone and Data Systems, Inc. 8 Gary E. Costley Managing Director C & G Capital and Management, LLC 9 Larry D. Zimpleman President and Chief Executive Officer The Principal Financial Group 10...

  • Page 29
    ... President, Insurance and Financial Services Daniel J. Houston President, Retirement and Investor Services James P. McCaughan President, Global Asset Management Karen E. Shaff Executive Vice President and General Counsel Norman R. Sorensen Executive Vice President Gregory J. Burrows Senior Vice...

  • Page 30
    ...Available only to fund investment options in certain variable annuity and variable life insurance contracts. Mutual funds and variable contracts are distributed by Principal Funds Distributor, Inc. and Princor Financial Services Corporation, members of the Principal Financial Group, Des Moines, Iowa...

  • Page 31
    ...Charters n Director Independence Standards n Corporate Code of Ethics Annual Meeting The Annual Meeting of Shareholders will convene at 9 a.m. Central Time, May 19, 2009, in the auditorium at the corporate headquarters of Principal Financial Group, Inc., 711 High St., Des Moines, Iowa 50392. Contact...

  • Page 32
    DES MOINES, IOWA 50392 1-800-986-EDGE (3343) WWW.PRINCIPAL.COM WE'LL GIVE YOU AN EDGE® BB 1345-14