Principal Financial Group 2014 Annual Report Download - page 4

Dear Fellow Shareholders:
There are millions like João, Darrin,
McKenna and Hector around the globe
earning a good living and planning for
what’s next. Though worlds apart, they
have plenty in common. Connected in
their desire to be confident about the
future … connected in their aspiration
to achieve financial security.
Great things happen when you connect people
with confidence, aspirations with experience. As a
leading global investment manager, the Principal
Financial Group is uniquely positioned to make
these connections … to connect the hopes and
dreams of millions of people around the world with
expertise, ideas and guidance … to secure a better
tomorrow.
This is the noble work that we do. At the Principal
Financial Group. Every day.
We do it by bringing together an integrated portfolio
of businesses that weathers economic volatility but
continues to deliver year after year, as evidenced
by outstanding 2014 results. In doing this work, we
grow. But growth alone is not our preoccupation.
Our preoccupation is to help millions of people
achieve financial security. This has been our focus
since 1879.
I encourage you to examine 2014 results as but one
chapter in a long story—another outstanding year,
despite ongoing economic headwinds, in a series of
strong years—that illustrates an enduring strategy,
excellent execution and long-term vision. A few
highlights from the year:
• Total company operating earnings reached a
record $1.3 billion, up 24 percent from 2013, a
result of record earnings in each of our four
operating segments.
• Net income grew 26 percent to a record $1.1 billion
or $3.65 per diluted share.
• Return on equity improved 210 basis points in
2014 to 14.2 percent.
• Assets under management reached a record
$519.3 billion.
• Strong net cash flows of $17.6 billion
demonstrated the competitivenes of our businesses,
outstanding investment performance and the
strength of our distribution partnerships.
• More than 85 percent of the company’s investment
options were in the top half of Morningstar rankings
on a one-, three- and five-year basis at year end.2
Throughout this report, you’ll learn more about ways
we’re working to meet retirement and long-term
savings needs by bringing our expertise to bear in
the most attractive retirement and long-term savings
markets in the world. In 2014, we further
strengthened our presence in markets where aging
populations and the number of middle-class workers
continue to grow … making the need for what we
do more relevant every day in Latin America, Asia
and the United States.
João’s pride shines as a first-
generation middle income
earner in Fortaleza, Brazil,
saving for his family’s future.
Guilherme Rossi leads a
team of advisors, from
our Brasilprev joint venture,
with the expertise to help
João invest in his first pen-
sion plan.
Hector Saldado has served
his community for 30 years
as a firefighter in Los Angeles.
He’s able to contemplate a
secure retirement now, in
part, because Kelly Rush
has been managing the real
estate securities portion
of Hector’s pension plan
provided by the Board of
Fire and Police Pension
Commission Los Angeles.1
Darrin and McKenna just welcomed
their son Jackson and know they need
life insurance to protect their growing
family, but the lengthy purchasing
process seems cumbersome. With
accelerated underwriting, the team at
the Principal Financial Group is able to
give Darrin and McKenna the preferred
coverage they need in just a few short
days without intrusive medical tests, bol-
stering their confidence about the future.
From the CEO
1. These situations are representational and do not
depict actual customers or events.
2. Represents the percentage of Principal mutual funds, separate
accounts and collective investment trusts in the top two
Morningstar quartiles as of 12/31/14. 2