Principal Financial Group 2013 Annual Report Download - page 4

I’ve been fortunate to spend my entire career at the Principal
Financial Group® (The Principal®). You may wonder why, after
more than 40 years, I’m still excited to come to work each day.
There are lots of reasons.
This is why:
Purpose
The need for our products and services is greater than ever
before. That gives us purpose.
• There are currently more than 1 billion people over the
age of 60 worldwide. That number is expected to double
by 20501.
• $2.4 trillion. That’s what U.S. households spent on credit
cards in 20122 – more than 10 times the amount employees
contributed to 401(k)s and other private defi ned contribu-
tion retirement plans3. We have to change this.
• According to the Employee Benefi ts Research Institute, less
than 2 percent of U.S. workers identify retirement planning
as their most pressing fi nancial issue, and 43 percent
of workers reported neither they nor their spouse are
currently saving for retirement4. We need to do a better job
of teaching fi nancial literacy.
• By 2025, millennials, also known as Gen Y or those born
in the ’80s and ’90s, will make up the majority of the
workforce5. We need to help them secure their fi nancial
future.
Pride
The Principal is uniquely positioned to fulfi ll these massive
needs. We’re executing the right strategy at the right time in
the right markets. That gives all of us at The Principal pride
in what we do.
People
In fulfi lling those needs, I get to work with some of the most
talented, committed individuals you’ll ever fi nd—in offi ces
around the globe. Our people keep me coming back, day
after day.
1 - U.N. Department of Economic and Social Affairs; 2 - U.S. Census Bureau estimate;
3 - Based on Cerulli estimates for 2012; 4 - 2013 Retirement Confi dence Survey,
Employee Benefi ts Research Institute, March 2013; 5 – GenY Women in the Work-
place, BPW Foundation, April 2011.
So there’s the why. But in a competitive and ever-changing
industry, how is The Principal able to fulfi ll our commitments
to customers, advisors and shareholders?
This is how:
Executing our strategy
A sound strategy, strong business fundamentals and effective
execution yield strong fi nancial results. That’s exactly what
The Principal achieved in 2013:
• Total company operating earnings were a record at nearly
$1.1 billion.
• Net income grew 14 percent compared to 2012.
• Return on equity increased to 12.1 percent.
• Assets under management were a record $483 billion as of
Dec. 31, 2013.
• Total company net cash fl ows were $17.4 billion.
Three of our businesses hit a signifi cant milestone in 2013.
Principal International and Principal Funds each crossed the
$100 billion mark in assets under management. And Principal
Global Investors crossed the same mark in third-party assets.
All three were aspirational businesses for us a little more than
a decade ago; today they account for the majority of our assets
under management.
LARRY ZIMPLEMAN
Chairman, President and Chief Executive Offi cer
2 2013 YEAR IN REVIEW | PRINCIPAL FINANCIAL GROUP
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