Principal Financial Group 2012 Annual Report Download - page 2

2 LETTER TO SHAREHOLDERS
5 2012 FINANCIAL HIGHLIGHTS
6 RIGHT STRATEGY, RIGHT MARKETS, RIGHT TIME
12 THE PRINCIPAL AT A GLANCE
14 BOARD OF DIRECTORS
15 SENIOR MANAGEMENT
16 2012 NON-GAAP FINANCIAL MEASURES
17 REPORTABLE SEGMENTS AND PRINCIPAL FUNDS
This 2012 Year in Review provides a company overview and financial highlights. For complete financial statements, including notes and management’s discussion and
analysis of financial condition and results of operations, please refer to the 2012 Form 10-K filed by the company with the Securities and Exchange Commission, which
can be found at www.principal.com/10k.
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, 2012, 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;
continued difficult conditions in the global capital markets and the economy generally; continued volatility or further declines in the equity 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 DPAC 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.
“The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
To see an expanded version of the 2012 Year in Review, visit
www.principal.com/yearinreview